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Unwanted things by someone in

business

Loss

Failed

Subject to legal sanctions

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AVOID RISK OF SUCH LOSSES OF ANY

INVESTMENT

COMPLETING THE REQUIREMENTS OF

RULES & LAW APLLIED IN THEESTABLISHMENT OF A BUSINESS

WHY IS A FEASIBILITY STUDY?

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AS CONSIDERATION TO ACCEPT ORREJECT ANY INVESTMENT DECISION

(FEASIBLE / NOT FEASIBLE).

WHY IS A FEASIBILITY STUDY?

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AVOIDING RISK OF LOSSES

FACILITATING PLANNINGFACILITATING THE

IMPLEMENTATION OF WORK

FACILITATING CONTROL

PURPOSES OF A FEASIBILITY STUDY

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New Ventures Failure

a) Does not have a comprehensive knowledge of the market

b) Does not have a comprehensive knowledge of the technical

requirements of the business

c) Does not have a comprehensive knowledge of the financial

aspects

d) The absence of the uniqueness of the products offered.

e) Lack of understanding of the legal aspects related to the

business

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What is a feasibility study?

A feasibility studyis an evaluation and

analysis of the potential of the proposed

project which is based on extensive

investigation and research to support the

process of decision making.

An activity that learns deeply whether or not

a business or businesses run are feasible

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Learning deeply means seriously examine the

data and information, then measured,

calculated and analyzed by using a particular

method.

Feasible means is the business carried on

providing benefits greater than costs

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Things to be considered before

developing a business feasibility study

FEASIBILITY STUDY needs cost; the cost for developing a

business feasibility should not be greater than the VALUE

BENEFITS of the business" that will be generated;

FEASIBILITY STUDY takes TIME: So to make it should not take

too long, so that the data will no longer UP TO DATE, and thecosts will be greater;

FEASIBILITY STUDY needs SKILLS; so that it should be made by

skillful and knowledgeable person .

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The aims of a feasibility study

Feasibility studies aim to objectively and

rationally uncover the strengths and

weaknesses of an existing business or

proposed venture, opportunities and threats

present in the environment, the resources

required to carry through, and ultimately the

prospects for success.

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How to judge feasibility study

two criteria to judge feasibility are cost

required and value to be attained

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The objectives of BSF

A feasibility study evaluates the project's

potential for success; therefore, the perceived

objectivity is an important factor in the

credibility to be placed on the study by

potential investors and lending institutions.

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PEOPLE

TO SEE WHETHER THE BUSINESS TO OPEN

WILL HARM THE ENVIRONMENT OR OTHERWISE, SO THAT

PEOPLE CAN ACCEPT OR REJECT IT.

GOVERNMENT

BASIS FOR CONSIDERATION IN ASSESSING &

GRANTING A BUSINESS PERMIT FOR

THE PORPOSED PROJECT

INVESTOR/

BANKING

TO ASSES THE BUSINESS

OPPORTUNITY WHETHER FEASIBLE OR NOT

MANAGEMENTAS A SOURCE CONSIDERATIONS

IN MANAJERIAL DECISION

ANALISTTHE ANALYST: APPLICATION OF

SCIENCE & KNOWLEGDE, GET FEE,

SOCIAL SERVICES

BENEFITS

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Business Environment

A. Internal Environmental Analysis

B. External environmental analysis

Role of Business Environment Analysis

1. Policy-oriented role (initial information for a broad strategic issues)

2. Role-oriented strategic planning (strategic environmentalforecasting)

3. Function-oriented role (improve the performance of functions of

the organization)

Environmental Analysis Techniques1. Profit impact analysis of market strategy

(comparing models of strategy on the return of capital)

2. Analysis of the range of values (value chain analysis)

3. functional analysis

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Forces influencing Industries

Potential Entrants

Industry Competitors

Rivalary among existing

firms

Substitute

Products or

Services

Michael Porter

Bargaining Power of

Suppliers

SupplersBuyers

Rivalary among existing firms

Threats of Substitute Products or

Services

Bargaining Power of Buyers

Threats of New Entrant

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Structural reasons why some industries were profitable

*Firm concentration*Established cost advantages

*Product differentiation

* Economies of scale

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Structural reasons all represented barriers to entry

in certain industries, thusallowing those industries to be

more profitablethan others.

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Porters Five Forces *Threat of Entry

*Bargaining Power of Suppliers*Bargaining Power of Buyers

*Development of Substitute

Productsor Services

*Rivalryamong Competitors

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Barriers to Entry

large capital requirementsor the need

to gain economies of scale quickly.

strong customer loyaltyor strongbrand preferences.

lack of adequate distributionchannelsor access to raw materials.

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Power of Suppliers

high when

*A small number of dominant, highly

concentrated suppliersexists.

*Few good substituteraw materials orsuppliers are available.

*The cost of switchingraw materials orsuppliers is high.

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Power of Buyers high when

* Customers are concentrated, largeor

buy in volume.*The products being purchased are

standard or undifferentiatedmaking it

easy to switchto other suppliers.*Customers purchases represent a major

portionof the sellers total revenue.

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Substituteproducts

competitive strength high when

*The relative priceof substituteproducts declines.

*Consumersswitching costs decline.

* Competitors plan to increase marketpenetrationor production capacity.

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Rivalry among competitors

intensity increases as

* The numberof competitors increases or

they become equal in size.

*Demand for the industrys productsdeclinesor industry growth slows.

* Fixed costsor barriers to leavingtheindustry are high.

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Summary

As rivalry among competing

firms intensifies, industryprofits decline, in some cases

to the point where an industry

becomes inherently

unattractive.

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BUSINESS FEASIBILITY STUDY

An activity that learns deeply about a business

or businesses run in the context of whether or

not the business is feasible

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Learning in depth means seriously examine

the data and information, then measured,

calculated and analyzed by using a particular

method

Feasible: Is the business carried on to provide

benefits greater than costs

Business

Business carried on providing benefits, both

financial and non-financial

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Important Tips to Develop A

Business Feasibility Study

Completeness and Accuracy of Data and

Information

Experts in the Feasibility Study Team

Determination of Methods and Right

Measurement

The Loyalty of Team Feasibility Study

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Factors cause why a business

feasibility study failed

Incomplete Data and Information

Not careful or precise

Miss calculation Wrong work Implementation

Environmental Conditions

Deliberate elements

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STAKEHOLDERS WHO ENGAGE WITH

FEASIBILITY STUDY

Business Actors and Investors

Profit-oriented and adds the Wealth of owners of

capital

Creditorsto assure the security of funds distributed

(guarantee of principal and interest).

Government

expansion of employment opportunities, savings of

foreign exchange, people income

Community

Positive result for the community

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Aspects of BFS

Consumer Markets and Producers

Marketing

Techniques and technology

Management

Human Resources

Natural Resources

Finance

Political, Economic and Social Industry environment

Juridical (legal)

Environmental

Business risk

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Marketing Aspect

Segmenting, Targeting, Positioning

Attitudes, behaviors, and customer

satisfaction

Strategy, policy, and marketing program

Marketing Mix (4 P's: Product, Price, Place,

Promotion)

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The purposes of marketing aspect

Maximizing Consumption

Maximizing Customer Satisfaction

Maximizing choice (product range)

Maximizing Product Quality

Increase sales volumes of goods and services

Dominate the market and face competition Meet the demand for a product and services

Meet the customers need on the product

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Technical and Technological Aspects

Selection of Production Strategy

Selection and Product Planning to be produced

Quality plan

Selection the Technology

Production capacity plan Inventory management

Type of technology

Product quality control

Equipment and machinery

Factory location

Plant layout

Technological developments

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Human Resource Aspect HR planning

Job analysis

Recruitment, Selection, and Orientation

Productivity

Training and Development Job performance

Required Skill

Pattern of salary / wages (compensation)

Career planning

Occupational Safety and Health

Discharge

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Aspek Manajemen

Bentuk badan usaha

Rencana Kerja

Struktur Organisasi

Koordinasi, implementasi, dan controlling

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Management Aspect

Forms of business entities

Work Plan

Organizational structure

Coordinating, implementing, and controlling

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The amount of funds needed

Financing structure (source of funds)

Profit and Ioss proforma

Balance sheet proforma

Investment analysis: IRR,

NPV, Payback Period vs.

Interest Rate

FINANCIAL

FINANCIAL ASPECT

Selection of investment: buy,

rent, cooporation

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Juridical Aspect

This aspect of the study covers the

completeness, perfection and authenticity of

the documents. This assessment includes the

Company Law Board (Individual, State or LocalCorporate, Limited Corporation, firm, CV,

Cooperatives, Foundations), owned licenses,

certificates Land and other supportingdocuments.

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A. Business Actors

Forms of Business Entities

The Identity of Business Manager

B. The business is runC. Location and Time Frame

D. Other Business Licenses and Permits

E. Communities and Local GovernmentSupport

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The ultimate purposes of a BFS

Assess whether the "something" can become

feasible (feasible) or not, from various aspects

and interests

It depends on the maker mindset

Optimistic vs. Pessimistic

Alignments

Political pressure

Educational Background

Working Experience

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The ultimate purposes of a BFS

Convince us that your "business deserve to

do.

Convince yourself that your "business" is

feasible to do.

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Steps on BFS

Collecting data

Processing data

Analyzing Data

Recomendation

Business Execution

RejectDecision making

Not

Feasible

Ti f S f l B i

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Tips for Successful Business

Feasibility Study

To avoid or minimize the risk of business

failure, so the entrepreneur need to evaluate

the Business Opportunity or so often called as

as the Business Feasibility Study whichgenerally consists of four stages as follows:

Formating the team work

Retrieving the data and information, in order tocomplete the accurate dan relevant data obtained

Analyse the data & information