BUSI 435 Feasbility Analysis

BUSINESS FEASIBILITY ANALYSIS OUTLINE

1. Your Company

In this section you will work on summarizing your new business idea and the business opportunity that you have identified. You will want to prepare some basic information for these topics including company information such as name, location, founders, etc.

Company summary: This topic functions as a brief summary of your proposed business. Insert the following information:

Name of your proposed business. Information regarding where the business will be located. Names of the founding entrepreneur or entrepreneurs. One paragraph summary of the business. The paragraph shouldn't contain more than3-4

sentences, but should distinctly state what your business will sell and who your customers will be.

Explanation of where the business idea came from.

Basis for new business: Most successful new business ideas either (1) solve a problem, or (2) take advantage of an environmental trend that creates the opportunity for a new business idea. Click the Examples link for examples of firms that were started for either of these reasons. Describe the way in which your proposed business either (1) solves a problem, or (2) takes advantage of an environmental trend that created the opportunity for a new business idea.

2. Preliminary Test of Business Idea

Before a venture team of a proposed business undertakes a feasibility analysis, a business concept statement should be developed. A business concept statement is a one page description of a business that is distributed by a startup entrepreneur to people who are asked to provide feedback on the potential of the business idea.

Hopefully, the feedback you obtain from your business concept statement will (1) give you a sense of the viability of your business idea and (2) provide you suggestions for revising or "tweaking" your business idea before proceeding further.

New business concept statement: Your business concept statement should not be more than one page long. It should include the following information:

A description of the product or service being offered. This section details the features of the product or service and may include a sketch of it as well.

The intended target market. This section lists the businesses or people who will buy the product or service.

The benefits of the product or service. This section describes the benefits of the product or service and includes an account of how the product or service adds value and/or solves a problem.

1

A description of how the product or service will be sold and distributed. This section specifies whether the product will be sold directly by you, or whether it will be sold through a distributor or a retailer. For a service business, this section details how the service will be delivered and sold.

Management team. This section provides information about the founder (or founders) of your proposed business, and other key members of the founding team (if any) that are in place.

Test the business concept statement: You should show your business concept statement to 15-20 people whom you trust and feel will give you informed and candid feedback about the potential of your business idea. Avoid asking people to read your concept statement that are likely to give you positive feedback, because they are a close friend or want to encourage you.

Attach a blank sheet of paper to your concept statement, and ask the people who read the statement to:

1. Tell you three things they like about your business idea.2. Provide three suggestions for making it better (avoid asking people to write things they

"do not like" about your business idea, because most people are reluctant to give negative feedback to someone they hardly know).

3. Tell you whether they think the proposed business is feasible. Stress to the people who read your concept statement that you will not be offended if they do not think the proposed business is feasible (or viable). You are looking for candid and substantive feedback.

Business concept statement feedback: This section is provided to report feedback from your business concept statement test. You should report the following information:

Strengths of the Business Idea - things people who evaluated your business concept statement said they "liked" about your business idea.

Suggestions for Strengthening the Business Idea - suggestions made by the people who evaluated your business concept statement for strengthening your business idea.

Overall Feasibility of the Business Idea - report the number of people who thought the idea is feasible, the number of people who though the idea isn't feasible, and any useful comments made pertaining to this topic.

Assessment of the business idea: This step is provided to help you evaluate the feedback you received from showing people your business concept statement and reading their comments.

Is not feasible May or may not be feasible Is feasible

1 2 3 4 5

Conclusion: Based on the feedback that you gathered for your Business Concept Statement, you need to decide how to proceed. Your choices are:

2

Proceed with the feasibility analysis. Proceed with the feasibility analysis, taking into consideration suggestions made by the

people involved in the business concept statement test. Rethink the business idea, and create a new business concept statement to be tested

before proceeding. Do not proceed with the feasibility analysis. The business idea is not feasible.

Reasons for assessment:

1. Describe what you learned from your business concept statement test.

2. Describe your reasons for the number you selected on the following 1-5 scale?


1 2 3 4 5

3. If your conclusion is to proceed with the feasibility analysis, describe the basis of your conclusion. If you elected to proceed with your feasibility analysis, taking into consideration suggestions made by the people involved in your business concept test, list the suggestions that you feel are the most helpful, and describe how you plan to address them. If your conclusion is not to proceed with the feasibility analysis, what alternative plan will you design to test? This last conclusion will require that your team repeat the previous steps before proceeding to the next section.

3. Product/Service Feasibility:

In this section, you will work on the product or service feasibility of your business idea. Product/service feasibility is an assessment of the overall appeal of the product or service being proposed. The idea is that before a prospective firm rushes a product or service into development, it should be confident that the product or service is what its potential customers want.

A product/service concept test involves showing a representation of the proposed product or service to 15-20 people. If a prototype of the proposed product or service is not available, a written or verbal description of the product or service should be used in its place. A product/service concept test is completed to (1) validate the overall desirability of the product or service idea and (2) help develop the idea.

The two components of a product/service feasibility analysis are the Product/Service Concept Test and the Buying Intentions Survey.

Product/service concept statement: Based on the assumption that a physical prototype of the product or service is not available, write a half-page to full-page statement that describes the product or service idea. If a physical prototype is available, skip this topic and substitute the prototype for the written explanation.

3

Include in the statement the following information. The first two bullet point sections can be briefer versions of what you wrote in your concept statement. You may use these bullet points as your topic headings.

Product/Service description. The intended target market. Value-added. Explain how, exactly, the product or service solves a problem or takes

advantage of an environmental trend that provides the opportunity for a new business idea. In other words, justify why the product or service is needed.

Intellectual property protection. Explain the extent to which your product or service will be protected by patents, trademarks, or copyrights.

Other Advantages. Explain any unique aspect of your product or service that would be of interest to its potential customers.

Product/service concept test: The Product/Service Concept Statement should be shown to 15-20 people (try to use different people than the people you involved in your concept statement test).

Attach a blank sheet of paper to your statement. Ask the people who see the statement to:

1. Write three things they like about your product/service idea.2. Provide three suggestions they have to improve it.3. Indicate whether they think the product/service idea is feasible or viable.

Stress to the people involved in the test that you will not be offended if they do not think the proposed product or service idea is feasible (or viable). You are looking for candid and substantive feedback.

Buying intentions survey: Copy and paste the Product/Service Concept Statement into this topic as a starting point to create a Buying Intentions Survey, which will help you estimate the market reception to your product or service. Include the following:

Description of the product or service The intended target market Other advantages Buying intention question

4

The buying intention question should look something like this:

How likely would you be to buy the product or service described above?

______ Definitely would buy

______ Probably would buy

______ Might or might not buy

______ Probably would not buy

______ Definitely would not buy

Survey potential buyers: Distribute your Buying Intentions Survey to 15-20 people that you think might buy your product or service. The number of people who respond that they definitely would buy or probably would buy are typically combined and used as a gauge of customer interest. One caveat is that people who say that they intend to purchase a product do not always follow through, so the numbers resulting from this activity are almost always optimistic. Still, the numbers provide you with a preliminary indication of how your most likely customers will respond to your potential product or service offering.

Concept test and survey results: This section is provided to report feedback from the two steps of your product/service feasibility analysis.

Step 1: Product/Service Concept Test

Strengths of the Product/Service Idea (things people who evaluated your product/service concept statement said they "liked" about your product/service idea)

Suggestions for Strengthening the Product/Service Idea (suggestions made by the people who evaluated your product/service concept statement for strengthening your product/service idea)

Overall Feasibility of Your Product/Service Idea (report the number of people who thought the idea is feasible, the number of people who though the idea isn't feasible, and any useful comments made pertaining to this topic)

5

Step 2: Buying Intentions Survey

Report the number of participants that checked each of the following selections:

______ Definitely would buy

______ Probably would buy

______ Might or might not buy

______ Probably would not buy

______ Definitely would not buy

Also report the percentage of the total number of people you surveyed that said they would probably buy or definitely would buy your product or service if offered. This percentage is the most important figure in gauging potential customer interest.

Assessment of the product/service feasibility: This step walks you through evaluating the feedback you received from the two steps of your Product/Service Feasibility Analysis; the Product/Service Concept Statement, and the Buying Intentions Survey.


1 2 3 4 5

Conclusion: Based on the feedback that you gathered for your Product/Service Concept Statement and your Buying Intentions Survey, you need to decide how to proceed. Your choices are:

Proceed with the feasibility analysis. Proceed with the feasibility analysis, taking into consideration information gleaned from

the product/service feasibility analysis, which may be used to revise or "tweak" the product/service idea.

Rethink the business idea, and create a new product/service feasibility analysis before proceeding.

Do not proceed with the feasibility analysis. Product/service idea is not feasible.


1. Describe what you learned from your product/service concept test.

2. Describe what you learned from your buying intentions survey.


6

Product/service idea Product/service idea may or may Product/service idea is isn't feasible not be feasible feasible

1 2 3 4 5

4. If your conclusion is to proceed with feasibility analysis, describe the basis of your conclusion. If you elect to proceed with your product/service feasibility analysis, describe what you learned that will help you revise or "tweak" your proposed business idea. If your conclusion is to proceed with the feasibility analysis, move onto the next section. If you conclude that you need to write a new Product/Service Concept Statement and gather feedback, then repeat the steps in the Product/Service Feasibility section.

4. Industry/Market Feasibility

In this section, you will develop an Industry/Market Feasibility Analysis. An Industry/Market Feasibility Analysis is an assessment of the overall appeal of the market for the product or service being proposed.

There are three primary issues to consider in this area:

1. Industry Attractiveness2. Market Timeliness3. Identification of a Niche Market

Industry attractiveness: An industry is a group of firms producing a similar product, like airlines, fitness drinks, or electronic games. Industries vary considerably in terms of their growth rates. A primary determinant of a new business' feasibility is the attractiveness of the industry it chooses.

7

To assess the attractiveness of the industry your proposed business plans to enter, consider the following issues:

1. Determine the industry your proposed business plans to enter. A list of business SIC codes, which may help you determine the industry your proposed business will operate in, is available online at http://listsareus.com/business-sic-codes-z.htm.

2. Rate the industry your proposed business plans to enter as being strong, weak, or neutral on each of the six criteria listed in the table below.

Ratings: Strong, Neutral, or Weak

The industry that my business plans to enter is:

1....large and growing (with growth being more important than size).

2....important to the customer. These markets typically sell products or services that customers "must have" rather than "would like to have."

3....fairly young rather than older and more mature. These markets tend to be early in their product life cycle, when price competition is not intense.

4....high rather than low operating margins. These markets are simply more profitable for entry and competition purposes.

5....not crowded. A crowded market, with lots of competitors, is typically characterized by fierce price competition and low operating margins.

6.

CONCLUSION: Based on these criteria, rate the industry your proposed business plans to enter as Attractive (or strong), Neutral (neither strong or weak), or Unattractive (weak).

Additional DetailIn making the assessment shown below, an entrepreneur may have to conduct both primary and secondary research. Primary research is research that is original and is collected by the entrepreneur. In assessing the attractiveness of a market, this typically involves an entrepreneur talking to potential customers and key industry participants.

Secondary research probes data that are already collected, such as those shown in the following table. The sources of secondary research include industry-related publications, government statistics, competitors' web sites, and industry reports from respected research firms. There are also many authoritative sources of industry related data available online, as shown in the table. Most universities buy licenses or subscriptions to these resources and provide their students,

8

faculty, and staff with access to them for free. A great example is Liberty’s access to Standard & Poor’s NetAdvantage: http://www.netadvantage.standardandpoors.com.ezproxy.liberty.edu:2048/NASApp/NetAdvantage/index.do.

As evidence that primary and secondary research has been completed, an entrepreneur should have concrete numbers relative to the market size and projected growth rate of the industry that he or she plans to enter. When looking for funding, for example, it is not good enough for an entrepreneur to simply say that the research supports that the firm will be participating in "large and growing markets." Instead, an entrepreneur should provide hard data to support such a claim.

Market timeliness: A second consideration in regard to the industry/market feasibility of a business idea is the timeliness of the introduction of a particular product or service.

Instructions for assessing the market timeliness of your proposed business:

1. Determine whether the window of opportunity for the proposed business is open or closed. For an entrepreneur to capitalize on an opportunity, its window of opportunity must be open. Use this topic to describe the market timeliness for your proposed business. State whether you feel that:

The window of opportunity is open. You are unsure, but leaning in the direction of thinking the window of opportunity

is open. You are unsure, but leaning in the direction of thinking the window of opportunity

is closed. The window of opportunity is closed.

The term "window of opportunity" is a metaphor describing the time period in which a firm can realistically enter a new market. Once the market for a new product is established, its window of opportunity opens. As the market grows, firms enter and try to establish a profitable position. At some point, the market matures, and the window of opportunity closes.

To make this assessment, an entrepreneur may have to complete the same type of primary and secondary research described for assessing market attractiveness. The best approach is to talk to people in the industry, or conduct meaningful secondary research, to see if new firms are still starting and if new entrants would be welcome.

2. Evaluate the simple economics of the marketplace regarding your potential business entry:

Are your potential customer's currently in a buying mood? Are similar firms in your industry making money? Is there currently a strong, a moderate, or a weak need for new entrants?

To evaluate the overall economics of the marketplace regarding your potential business entry, answer the questions presented in the table below with "Yes," "No," or "Unsure."

9

http://www.netadvantage.standardandpoors.com.ezproxy.liberty.edu:2048/NASApp/NetAdvantage/index.do

http://www.netadvantage.standardandpoors.com.ezproxy.liberty.edu:2048/NASApp/NetAdvantage/index.do

Answer: Yes, No, or Unsure

Market Economics

Are your potential customers currently in a buying mood?

Are firms similar to your proposed business making money?

Are firms similar to your proposed business entering into interesting and/or profitable partnerships?

Is there a compelling need for a new firm in your industry (which your combination of offerings)?

Availability of a niche market: The final step in industry/market feasibility analysis is identifying a niche market in which the proposed business can compete. A niche market is a place within a larger market segment that represents a narrower group of customers with similar interests. Most successful entrepreneurial firms do not start by selling to broad markets. Instead, most start by identifying an emerging or underserved niche within a larger market.

The challenge in identifying an attractive niche market is that it must be large enough to support a proposed business yet small enough to avoid direct head-to-head competition with industry leaders. If a clearly defined niche market cannot be identified, it is difficult to envision the industry/market feasibility of a new business venture.

1. Describe the niche market, which is a segment of the broader industry that you have selected, in which your proposed business will compete.

2. Describe your degree of confidence in the niche market that you have identified using the table below.

Ratings: Confident, Unsure, Not Confident

Niche Market Confidence

The niche market I plan to enter is large enough to support my proposed business (along with the firms already in the market).

The niche market I plan to enter does not compete head-to-head with industry leaders.

The niche market I plan to enter is gaining rather than losing momentum.

Firms within the niche market I plan to enter are making money.

10

Assessment of industry/market feasibility: This step walks you through evaluating your industry/market feasibility analysis based on the combined results of the three previous steps.

Industry/market It's unclear whether Industry/market is not feasible for industry/market is feasible is feasible for proposed business for proposed business proposed business

1 2 3 4 5

Conclusion: Based on the information that you gathered for your Industry/Market Feasibility, you need to decide how to proceed. Your choices are:

Proceed with the feasibility analysis. Proceed with the feasibility analysis, noting concerns in the area of industry/market

feasibility to guard against and/or try to overcome. Rethink the industry the proposed business plans to enter, and conduct a new

industry/market feasibility analysis before proceeding. Do not proceed with feasibility analysis. Industry/market isn't feasible for proposed

business.


1. Describe what you learned from your assessment of industry attractiveness.

2. Describe what you learned from your assessment of market timeliness.

3. Describe what you learned from your assessment of the availability of an attractive niche market.

4. Describe your reasons for the number you selected on the following 1-5 scale.

Industry/market It's unclear whether Industry/market isn't feasible for industry/market is feasible is feasible for proposed business for proposed business proposed business

1 2 3 4 5

5. If your conclusion is to proceed with the feasibility analysis, describe the basis of your conclusion. If you elected to proceed with your feasibility analysis, noting concerns in the area of industry/market feasibility analysis to guard against and/or try to overcome, describe the most important areas you noted and how you plan to address them. If your conclusion is to proceed with the feasibility analysis, move onto the next section. If you conclude that you need to rethink the industry and market you plan to enter, repeat the steps in the Industry/Market Feasibility section.

11

12

5. Organizational Feasibility Analysis

An Organizational Feasibility Analysis is conducted to determine whether a proposed business has sufficient management expertise, organizational competence, and resources to successfully launch its business.

There are two primary issues to consider in this area:

1. Management Prowess 2. Resource Sufficiency

Management prowess: A proposed business should candidly evaluate the prowess, or ability, of its management team. This means that an entrepreneur, or the group of entrepreneurs that are proposing to start a business, must complete a self-assessment.

1. The sole entrepreneur or group of entrepreneurs should rate themselves on the criteria in the table below. If there is more than one entrepreneur involved, the rating should reflect the combined strength of the individuals involved.

2. Based on these criteria, candidly and objectively rate the "prowess" of the entrepreneur or group of entrepreneurs that will be starting the proposed business.


Management Prowess

Passion for the business idea

Prior entrepreneurial experience

Prior experience in the industry that the business is proposing to enter

Depth of professional and social network (number and quality of the people the entrepreneur or entrepreneurs know, that could possibly help them get their business idea off the ground)

Creativity (how creative the entrepreneur or entrepreneurs are)

College graduate (working towards or have obtained an undergraduate or graduate degree)

Prowess of the Entrepreneur(s)

13

Resource sufficiency: The second component of an organizational feasibility analysis is to determine whether the potential new venture has sufficient resources to move forward to successfully develop a product or service idea. The focus in an organizational feasibility analysis should be on nonfinancial resources in that financial feasibility is considered separately.

To complete this section, you should rate your "resource sufficiency" (as of the date of the feasibility analysis) using the table below. The rating system used in the first portion is defined as:

Ratings: Available, Unsure (likely), Unsure (unlikely), Unavailable, NA

Resource Sufficiency

Office space

Lab space, manufacturing space, or space to launch service business

Key management employees (now or in the future)

Key support personnel (now or in the future)

Key equipment needed to operate the business (computers, machinery, delivery vehicles)

Ability to obtain intellectual property protection on key aspects of business

Support of local (and state government if applicable) for business start

Ability to form favorable business partnerships


Proximity to similar firms (for the purpose of knowledge sharing)

Proximity to key suppliers

Proximity to key customers

Proximity to a major research university (if this variable is applicable)

Overall Resource Sufficiency

14

Assessment of organizational feasibility: Evaluate the results from the previous two steps in your organizational feasibility analysis.

Weak organizational Neutral organizational Strong organizational feasibility feasibility feasibility

1 2 3 4 5

Conclusion: Based on the information that you gathered for your Organizational Feasibility Analysis, you need to decide how to proceed. Your choices are:

Proceed with the feasibility analysis. Proceed with the feasibility analysis noting concerns in the area

of organizational feasibility analysis to guard against and/or try to overcome. Rethink the organizational feasibility of the proposed business, and conduct a

new organizational feasibility analysis before proceeding. Do not proceed with feasibility analysis. Organizational feasibility is not strong enough

to proceed.


1. Describe what you learned from your assessment of management prowess.

2. Describe what you learned from your assessment of resource sufficiency.


Weak organizational Neutral organizational Strong organizational feasibility feasibility feasibility

1 2 3 4 5

4. If your conclusion is to proceed with the feasibility analysis, describe the basis of your conclusion. If you elect to proceed with your feasibility analysis, noting concerns in the area of organizational feasibility analysis to guard against and/or try to overcome, describe the most important areas you noted and how you plan to address them. If your conclusion is to proceed with the feasibility analysis, move onto the next section. If you conclude that you need to rethink the organizational feasibility, repeat the steps in the Organizational Feasibility Analysis section.

6. Financial Feasibility Analysis

Financial feasibility analysis is the final stage of a comprehensive feasibility analysis. For feasibility analysis, a quick financial assessment is usually sufficient. More effort at this point in developing the financial statements is typically not required because the specifics of the business

15

model will require development first. Detailed financial statements will be required in the business plan.

The most important issues to consider at this stage are:

Start-up Capital Requirements Overall Attractiveness of the Investment

Capital requirements table: An assessment of the feasibility of raising enough money to fund the capital requirements and the initial operating expenses of the business is necessary. New firms typically need money for a host of purposes, including the hiring of personnel, office or manufacturing space, equipment, training, research and development, marketing, and the initial product rollout.

At the feasibility analysis stage, it is not necessary for this number to be exact or itemized. However, the number should be fairly accurate and give an entrepreneur an idea of the dollar amount that will be needed to launch the firm.

Capital requirements: Based on your evaluation of your start-up capital requirements table, describe the feasibility of raising sufficient funds to meet these needs as:

Feasible Unsure (leaning in the direction of being feasible) Unsure (leaning in the direction of being non-feasible) Non-feasible

Overall attractiveness of the investment: A number of other financial factors are associated with promising business opportunities. In the feasibility analysis stage, the extent to which a business opportunity is positive relative to each factor is based on an estimate, or forecast, rather than actual performance (or detailed forecasts of future performance).

16

The following factors are important to assess in regard to the overall financial attractiveness of the proposed business. Assess the likelihood of each of these factors being positive in the first 1-3 years of the proposed business:

Ratings: Likely, Unsure (likely), Unsure (unlikely), Unlikely

Attractiveness of Investment

Steady and rapid growth in sales during the first one to three years in a clearly defined market niche

High percentage of recurring revenue--meaning that once you win a client, the client will provide a recurring sources of revenue

Ability to forecast income and expenses with a reasonable degree of accuracy

Internally generated funds will be available within two years to finance and sustain growth

Profitability will be reached within one year

Availability of an exit opportunity (such as an acquisition or in initial public offering) for investors to convert equity into cash


Overall Financial Attractiveness

2. Based on these criteria, rate the overall financial attractiveness of your proposed business as:

Strong Neutral Weak

Assessment of financial feasibility: This step is provided to evaluate the feedback you received from the three steps of your financial feasibility analysis.

Based on the combined results of these steps,

Proposed business is not Proposed business may or may not Proposed business is financially feasible be financially feasible financially feasible

1 2 3 4 5

17

Conclusion: Based on the information that you gathered for your Financial Feasibility Analysis, you need to decide how to proceed. Your choices are:

Proceed with feasibility analysis Proceed with feasibility analysis, noting concerns in the area of financial feasibility

analysis to guard against and/or try to overcome. Rethink the financial feasibility of the proposed business, and conduct a new financial

feasibility analysis before proceeding. Do not proceed with feasibility analysis. Financial feasibility is not strong enough to

proceed.


1. Describe what you learned from your assessment of start-up capital requirements.

2. Describe what you learned from your assessment of the overall attractiveness of the investment.


Proposed business is not Proposed business may or may not Proposed business is financially feasible be financially feasible financially feasible

1 2 3 4 5

4. If your conclusion is to proceed with the feasibility analysis and ultimately the business plan, describe the basis of your conclusion. If you elected to proceed with your feasibility analysis, noting concerns in the area of organizational feasibility analysis to guard against and/or try to overcome, describe the most important areas you noted and how you plan to address them. If your conclusion is to proceed with the feasibility analysis, move on to the next section. If you conclude that you need to rethink the financial feasibility, repeat the steps in the Financial Feasibility Analysis section.

18

7. Feasibility Analysis Results

This section will provide you with an overall sense of the feasibility of your proposed business idea.

Weighting the four feasibility analysis components: Using your judgment, assign a percentage weight to each area of your feasibility analysis in the table below. The percentages you assign for the four areas must equal 100% or 1.0.

Product/service feasibility analysis (.25) Industry/market feasibility analysis (.25) Organizational feasibility analysis (.25) Financial feasibility analysis (.25)

Additional DetailNot all of the four areas of feasibility analysis, product/service feasibility, industry/market feasibility, organizational feasibility, and financial feasibility may have equal weight for your proposed business idea.

For example, you may already have the money in place to launch your proposed business, so financial feasibility is not an immediate concern. However, you may be unsure of the industry/market feasibility of your business idea. In this case, you might want to assign a weight of less than 25% to financial feasibility analysis and a weight of more than 25% to industry/market feasibility analysis.

Explain weights: Use this topic to describe the weights that you assigned in the table from the previous step. Write a brief, but detailed explanation of the rationale you used for assigning the different weights to each of the four major analysis components. If you have chosen to use equal weights for all four analysis components, explain why you did not differentiate each component.

Numerical assessment table: The following data are the result of your feasibility analysis assessments. All assessments are based on a 1-5 scale with the value of “1” being “Very Infeasible” and the value of “5” being “Very Feasible”. The Weighted Average calculation takes into account the percentage weighting that you did in the previous table.

Numerical assessment of the feasibility of the new business idea: Use this topic to:

1. Summarize the numbers that you assigned to rate each feasibility component in the previous sections.

2. Describe the Numerical Assessment table which will follow this topic in your printed plan.

Conclusions: Use this topic to write your conclusion based on the four components of the feasibility analysis that you have completed.

19

The averages shown in the Numerical Assessment table should be used for guidance purposes only. There is no conceptually accurate "cutoff" for whether a proposed business idea is or is not feasible. The number represents one piece of information that you can use to determine whether it is a good use of your time and resources to proceed with your business idea.

You should also remember that the proper execution of a business idea is of paramount importance. A highly feasible proposed business idea can easily fail in the hands of a careless or an inexperienced entrepreneur, while a business idea that is weaker from a feasibility analysis standpoint can soar in the hands of a highly competent and passionate team of entrepreneurs.

The feasibility analysis is an important process prior to launching a new venture. Many businesses fail, not because the entrepreneurs involved did not work hard or were not committed, but rather they failed because the business idea was not feasible in the first place. As a result, the numbers generated from this analysis should be taken seriously.

Much of the content that you have produced for the feasibility analysis can and should be used in the forthcoming business plan that you will be developing.

20

Documents

BUSI 435 Feasbility Analysis