Objective 2.13

• Students will employ entrepreneurial discovery strategies (Feasibility Study) to generate feasible ideas for business ventures/products.

ESSENTIAL QUESTIONS1.What is a feasibility study?2.What are the benefits of conducting the study?3.What possible causes of action could be taken

following a feasibility study?

• Provides an overview of the primary issues related to a business/venture idea. It determines if the business venture is feasible or “doable”.

• Determines whether the business/venture idea makes sense.

• Are there any make or break issues that would prevent your business from being successful in the marketplace?

• Identifies roadblocks facing your business/venture BEFORE you make an investment.

• To answer the question: Should I proceed with this project?

• Provides a lot of information necessary for the business/venture plan.• Good market analysis is a necessary in order to

determine the business/venture feasibility.• Identifies reasons NOT to proceed• Provides documentation that the business was

thoroughly investigated (will help with getting financing, as well as help to attract equity investment)

• Identifies new opportunities through the investigative process.

• Already know it is feasible (another business is already doing it and is successful).

• Why do one when one was done a few years ago?• Just a way for consultants to make money.• Market analysis has already been done by the

business that sold us the equipment.• A feasibility study is a waste of time.

These may sound like good answers but remember... you may need to live with these

decisions for a long time.

• Market Considerations...• Technical Considerations...• Financial Considerations...• Organizational/Managerial Considerations...• Competitive Considerations...

• Current or projected demand for your proposed product or service(s)?

• What are the target markets for your product or service?

• What competition exists in this market?• Is the location of your proposed business

location likely to affect the success of your business?

• What is the projected supply in your area of the products or services needed for your project?

• Technology may or may not be of critical importance or it may not. Compare a daycare center to a manufacturing enterprise.

• If Technology is a consideration:• What are the needs for the business/venture?• What other equipment does your business need?

Where will you get it? When will you get it? What does it cost?

• Start-up Costs• Operating Costs• Revenue Projections• Sources of Financing• Profitability Analysis

• What organizational Structure is the right one for your business/venture?

• Who will serve on the Board of Directors and what are their qualifications?

• What qualifications are needed to manage this business?

• Who will manage the business?• What are the staffing needs?

• What competition exists in this market?• Can you establish a market niche which will

enable you to compete effectively with others providing this product or service?

• How much is your competition charging for similar product?

• In order for a feasibility to be useful it must be COMPLETE and include (at a minimum) the following elements:1. Project Scope

• Defines the business problem and/or opportunity to be addressed. 2. Current Analysis

• Define and understand the current method of implementation, such as a system, a product, etc.

3. Requirements• Financial, Human Resources, Material, Equipment• Depends on the project

4. Approach• Recommended solution or course of action to satisfy the

requirements.5. Evaluation

• Examines the cost effectiveness of the Approach selected.6. Review

• All of the preceding elements are then assembled into a Feasibility Study and a formal review is conducted with all parties involved.

Source: http://it.toolbox.com/blogs/irm-blog/the-elements-of-a-good-feasibility-study-23199

Strategic plan used to evaluate your business

• Strengths – characteristics of business that gives it an advantage on other businesses of the like.

• Weaknesses - disadvantages• Opportunities – chances to improve

product/service within the market• Threats – elements that could cause trouble

(competitors)

Strengths Weaknesses

Opportunities Threats

Unique ideaCost

Manpower

Expansion

LiabilityNeed

Car ride