Feasibility Analysis

00000016068 Clara Azalia

00000010987 Eveline Surlistia
00000017793 Ilona Liman Sudjuanda
00000016153 Kartika Dian
00000012307 Sandra Putri
FEASIBILITY ANALYSIS

Feasibility analysis is a process of determining is a business idea is practical or

not. If a business idea lacks on one or more of the four components of feasibility
analysis, then it should be dropped. These components are product or service
feasibility, industry or target market feasibility, organizational feasibility, and
financial feasibility. Many entrepreneurs made mistakes by jumping into
making business plan directly when they had an idea without analyzing
whether the idea is viable or not viable and hence failed. Therefore this analysis
is important for the continuation of business ideas.

Feasibility analysis is not strictly an assessment on product or service; instead it

is an assessment of a potential business. This analysis is investigative in nature
and designed to critique the merits of a proposed business. While Business plan
is more focused on planning and selling, feasibility analysis is focusing more on
investigating a potential business. Both process are important, however it is
also important not to skip feasibility analysis and jump to making business plan.
Failure to properly investigate the benefits of business idea before developing
business model and writing business plan runs the risk of blinding an
entrepreneur to inherent risks associated with the potential business and
results in too positive of a plan.

In this analysis, both primary research and secondary research are both done to
provide data and support the investigation. This would further open
opportunities for the idea to be revised, altered and changed as the data
obtained. The key objective of feasibility analysis is to put an idea to a test. This
analysis will not only help in determining whether an idea is feasible but also
help shape and mold the idea.

Our idea for this feasibility analysis is an inline food and beverage business
called Sushi Cake. Which focuses on making cake-shaped sushi with sushi
ingredients.
PRODUCT/SERVICE FEASIBILITY

A. Product / service desirability

Product/service desirability: the function of this one is to affirm that the

proposed product or service is desirable and serves a need in the marketplace.
We have determined that our product will be a sushi cake. What is a sushi cake?
Sushi that is designed to be/ looks like a cake that is edible. It this section we
will explore the desirability of our product.

To determine the basic appeal of the product/service we need to answer the

following question:

 Does it make sense? It is reasonable? Is it something real costumers will

buy?

Yes, sushi cake makes sense and reasonable. We are pretty sure the costumers
will buy this product because we are going to sell a product that is counted in
food beverages, as we know we need beverages to survive its a basic which
means considerably should be easier to sell than second (phone, bed) or tertiary
needs (diamonds, ferrari, private jet)

 Does it take advantage of an environmental trend, solve a problem, or fill

a gap in the marketplace?

Yes it does take advantage of a trend and fill a gap in the marketplace. How so?
Because we think that Asian cuisine are on trend right now especially from
korean and Japan like takoyaki, bibimbap, sushi. What we are going to do is take
one of the most trending food which is sushi to fill the gap in the marketplace.

 Is it a good time to introduce the product/service to the market?

Yes, because as we said earlier we need to fill the marketplace before someone
else decided to take the opportunity to themselves. The timing is greatly
important and we have decided that this is the right time to start this business.

 Are there any fatal flaws in the product or service’s basic design or
concept?

We don’t think so. We try as hard as we can to minimize the flaws in our
product and design before we decided to launch the product itself.

Aside from all these questions, it is also fairly important to know what the real
costumers thinks, wants, and demands from us. How do we know what they
want? Simply by talking in real life to our potential costumer. What are the
disadvantages of not talking to our potential customers?
Here’s a list of those advantages:

 Its hard to know if a product sufficiently desirable based simply on guts

instinct or secondary research.
 Its hard or nearly impossible to get a feedback if you don’t tell the your
basic concepts.

Whats the result of not talking to our potential costumer first? Based on the
experience on some of the entrepreneurs the results of not doing this seemingly
easy task are a disaster on their first business. This happens because they made
a concept that they thought was perfect and when it comes to real world?
Different demands from costumers, different needs, it is just way to different
from what the costumers really wants from the product they are trying to sell.
That is why talking and getting feedback is important, sometimes though having
to go to talk to these potential costumer must be a complicated task, where you
probably don’t have time for it or the costumers were not available where you
are. Now we can simply solve this problem by using a online tools. Online tools
helps entrepreneurs quickly and inexpensively make contact with prospective
costumers and complete other steps in the feasibility analysis process, these
tools range from services like Quirky which provides direct feedbacks on
product ideas to 3D printing services like Shapeways which converts CAD
drawings of product ideas into physical prototypes that you can show to
potential costumers.

B. Product / service demand

The second components of product/service feastibility analysis is to determine

if there is demand for the product/service. Three commonly utilized methods
for doing this includes [1] talking face-to-face with potential costumers, [2]
utilizing online tools, such as Google Adwords and landing page, to asses
demands, and [3] library, internet and gumshoe research.

Talking face- to- face with potential costumers: the only way to know if your
product or service is what people want is by talking to them. Curiously, this
often doesn’t happen. One study of 120 business founders revealed that more
than half fully developed their products without getting feedback from potential
costumer. The ideas are to gauge costumer reaction to the general concept of
what you want to sell. In some instances, you have to pause and think carefully
about who the potential costumer is. For example, in health care the costumer is
an insurance company, hospital, medicare or Medicaid instead of the patient
who will use the drugs or benefit from a medical procedure. For our product we
need to talk to our potential costumer, which is franchise restaurant that
accepts homemade sushi, families, sushi lovers, etc.
Utilizing online tools, such as Google Adwords and Landing Pages, to Asses
demand
To put it simply you buy a keyword from Google Adwords program then when
someone search a keyword from example like “sushi”, “food”. Once someone
buy these keywords, a link that I’ve prepared will come up whether to right or
below the organic search results. If someone clicks on the link, they’ll be taken
to what online marketers call a landing page. The beauty of using Google
Adwords is that the people who click and were whether searching for the terms
“sushi” or “food” in order to the ads to appear so its fill/ meets their needs.

Library, Internet, and Gumshoe Research

Conducting library, Internet and Gumshoe research. While talking to
prospective costumers is critical, collecting secondary data on an industry is
also helpful. The overreaching point is that for your particular product or
service you need archival as well as primary forms of research to asses likely
demand. Simple gumshoe research is also important for gaining sense of the
likely demand for a product/service idea. A gumshoe research is a detective or
an investigator that scrounges around the information or clues whenever they
can be found. Don’t be bashful. Ask people what they think about
product/services. Since our idea is making a sushi that looks like cake, we think
we might need to volunteer as a chef/ waitress in sushi restaurant in order to
understand what having restaurant feels like. The importance of library,
Internet and Gumshoe research doesn’t wane once a firm is launched. It’s
important to continually assess the strength of product/service ideas and learn
from users.
INDUSTRY/TARGET MARKET FEASIBILITY

A. Industry attractiveness

The first component to industry/target market feasibility analysis is industry

attractiveness. There are top three factors that particularly important in characteristic
of attractive industries: [1] are young rather than old? [2] are early rather than late in
their life cycle, [3] are fragmented rather than concentrated, means where a large
number of firms are competing but no single firm has a dominate the market rather
than few large firms dominate competition.

Not only moving in the food and beverages sector, by selling sushi cake we also
introduce the Japanese culture and also its possibilities to be fusion-ed the traditional
Japanese food with western type of traditional cake. This would result a unique type
of experience towards food lovers. By selling this product it would definitely attract
the interest of the customers, thus this business would generate a significant amount
of income.

In terms of innovation, there haven’t been many restaurant or entrepreneur that has
come up with this idea. This allow us to be the pioneer which could build the brand
image of this type of product in the future. If our brand image manage to become the
go to brand, would establish us as the leading business. We came up with this idea
after seeing the dullness of the same type of cake with the same type of toppings
repeatedly. That’s why we try to come up with this ground breaking idea to give more
variations and both looks and taste that would certainly impact our customers.

By fusion-ing sushi and cake two types of food which originated from different
cultures, would definitely attract the curiosity of people from the two cultures. Not to
mention, people who generally curious on how this product would taste. So, the
combination of this product could become the ‘it’ product that would be able to break
the barrier of cultures.

B. Target Market attractiveness

The second component to industry/target market feasibility analysis is target market

attractiveness. A target market is a place within a larger market segment that
represent a narrower group of customers with similar needs. Instead, by focusing on a
smaller target market, a firm can usually avoid head-to-head competition with
industries leaders and can focus on serving a specialized market very well. Most
successful start-ups either introduce a new product into an existing market or
introduce a new market to an existing product.

We present the business is aimed at teenagers or young adults who are looking for
innovation and something new in the food industry. Why teenagers? For teens today
are always looking for and try new things. As well as food, where there is a new food
definitely try and crowded. Therefore, we try to make innovation that does not exist
and can attract the attention around. We provide sushi cake, which is a cake made of
sushi making. This cake can be as a substitute for pastries in general. For those who
are bored with the existing cake, they could try the sushi cake from us. This cake can
be used for birthdays or for other events with prior reservation. We also can provide
custom cake for those customers who have something different. Then we are also
based online that can enable customers to order and view our cake.

The price is quite expensive but good quality, we focus on the middle level and
upwards. This cake is also very suitable for sushi lovers, food from Japan. We give
taste and new style for sushi lovers, so that customers do not get bored with the usual
sushi.We are in the area of Karawaci, Tangerang and around Jakarta. We can also
make direct shipments around Karawaci and cash on delivery. But if it's in Jakarta
and surrounding areas, we can use the online motorcycle that cost borne by the
customer. We believe that this business will give the good impact for all customers.
Although the target and our focus is on teenagers and their peers, of course, the
parents could be ordered and become our loyal customers.
ORGANIZATIONAL FEASIBILITY

Sushi Cake is a sole proprietorship business where there is only one owner of the
company with a low cost to start the business. The personal liability of owners is
unlimited and the owner is in full control of the business. The owner responsible for
anything happens generally in business. All the legal needs are processed by owner
with the help of two trusted notary in order to follow the legal rules for building a
business based on the law of Indonesia.

To help the owner, there is 4 other managers that will responsible to the owner
directly for their divisions, which is business or operation division, financial division,
marketing division and customer service division. There are also 3 employees who
work for Sushi Cakes.

Business or operation manager oversees the production of goods from the purchasing
of material to delivery for the consumer. Business or operation manager aim is to
ensure that the organization is running smoothly and efficiently as possible, and that
the goods produced meet consumer needs. Business and operation managers also
operate the working time to maximize the work of each employee. To help the
business or operation manager, there are 3 other employees that will help the
manager, 1 employee is responsible for the supply and 2 other employees are
responsible for the production where they work as the chefs as well. All employees
are responsible to give a report to the business and operation manager where the
manager will maintain and develop the production and business with the help of
other managers.

Financial division ensures the cash flow of the company to minimize the threat of
deficit or loss. Financial division responsible to report the financial statement,
including the cash flow statement, income statement and production statement to the
owner and other managers monthly in order to spend the minimum expense to
maximize the income.

Marketing division are responsible for developing, implementing and executing

strategic marketing plans for the entire organization in order to attract potential
consumer and retain existing one

Since the target market of marketing division is young people, marketing manager
needs to attract more young people by gaining the recognition of young people so in
the future Sushi Cake is able to be a trend of young people. The strategic could be
from the social media or direct marketing. Marketing manager needs to publish and
increasing the value of the brand itself among people.

Customer service division connect the customers to the organization from the
moment the customer ordered the goods via online or take control of the waitress of
the Sushi cake itself to show the good performance of service from the Sushi Cake to
the customer.
 All managers need to give a monthly report to the owner in order to maintain the
business and develop the idea of the business itself so innovations should be
discussed in the monthly meeting with the agreement and advices from the managers
and owners.

Sushi Cake
Organizational Chart

Owner

Eveline Surlistia

Financial
Manager
Clara Azalia

Business/operati Marketing Customer Service

on Manager Manager Manager
Ilona Liman Sandra Putri Kartika Dian
FINANCIAL FEASIBILITY

Financial Feasibility is the final component of comprehensive feasibility analysis.

The most important issues to consider at this stage are total cash needed, financial
performance of similar business, and overall financial attractiveness of the proposed
venture.

A. Total start-up cash needed

- Types of nonfinancial resources that are critical to many start-ups’ success:

o Affordable office space
o Lab space, manufacturing space, or space to launch a service business
o Contract manufacturers or service providers
o Key management employees
o Key support personnel
o Key equipment needed to operate the business
o Ability to obtain intellectual property protection on key aspects of the
business
o Support of local governments and state governments if applicable for
business launch
o Ability to form favorable business partnership

a. What is needed

Equipment Price Quantity Total

Sushi rolls Rp 50,000 15 Rp 750,000
Stove Rp 250,000 5 Rp 1,250,000
Gas torch burner Rp 100,000 10 Rp 1,000,000
Knife Rp 50,000 10 Rp 500,000
Cutting Board Rp 30,000 10 Rp 300,000
Trays Rp 20,000 20 Rp 400,000
Rice Cooker Rp 3,000,000 2 Rp 6,000,000
Freezer Rp 3,000,000 1 Rp 3,000,000
Frying Pan Rp 100,000 10 Rp 1,000,000
Spatula, etc Rp 20,000 20 Rp 400,000

Total Equipment needed Rp 14,600,000

Starting inventories Price Quantity Total

SUSHI RICE Rp 10,000 50 kg Rp 500,000
SALMON Rp 200,000 10 kg Rp 2,000,000
MAYONAISE Rp 100,000 5 Rp 500,000
MENTAI SAUCE Rp 100,000 5 Rp 500,000
WASSABI Rp 120,000 2 Rp 240,000
CHILI POWDER Rp 50,000 2 Rp 100,000
TUNA Rp 150,000 10 kg Rp 1,500,000
TAMAGO(EGGS) Rp 70,000 10kg Rp 700,000
RICE SAUCE Rp 80,000 10 Rp 800,000
SOY SAUCE Rp 50,000 10 Rp 500,000
NORI Rp 100,000 15 Rp 1,500,000
TOBIKO Rp 100,000 10 Rp 1,000,000
FRYING OIL Rp 300,000 10 Rp 3,000,000

Total starting inventories

needed Rp 12,840,000

Advertising and Promotion Total

Social media promo Rp 1,500,000
Endorsement Rp 3,000,000

Total adv&promo needed Rp 4,500,000

b. Total Start-Up Cash Needed Statement

ONE TIME START UP EXPENSES AMOUNT

One Time Start-Up Costs:

Rent Deposit free
Furniture & Fixtures Rp 10,000,000
Equipment Rp 14,600,000
Installation of Fixtures & Equipment Rp 500,000
Starting Inventory Rp 12,840,000
Advertising and Promotion Rp 4,500,000
Cash Rp 5,000,000
Other: unexpected expenses Rp 2,000,000
Total One Time Start-Up Costs: Rp 49,440,000
Monthly Expenses:
Bank Charges Rp 20,000
Insurance Rp 200,000
Maintenance & Repairs Rp 150,000
Marketing & Promotion: Advertising Rp 200,000
Miscellaneous Rp 1,000,000
Payroll: Wages (Manager) 1 Rp 5,000,000
Payroll: Wages (Employees) 3 Rp 10,500,000
Payroll Tax Rp 150,000
Payroll: Wages (Customer Service) 1 Rp 4,000,000
Professional Fees: Marketing 1 Rp 5,000,000
Professional Fees: Accounting 1 Rp 5,000,000
Rent free
Supplies: Office Rp 70,000
Supplies: Operating Rp 70,000
Telephone Rp 200,000
Utilities Rp 100,000
Other: Rp 200,000
Total Monthly Expenses: Rp 31,860,000

TOTAL START-UP FUNDS REQUIRED: Rp 81,300,000

Loan Amount (At 80% of Total Start-Up) Rp 65,040,000

B. Financial performance of similar businesses

The financial statement above is the statement of Genki Sushi in Japan.

However in Indonesia, there is no financial report from similar business of sushi

restaurant or sushi of our kind. Sushi restaurants in Indonesia are mostly family owned;
hence their financial statements are not published for public.

C. Overall financial attractiveness of the proposed venture

- The factors to assess whether the venture is financially feasible:

o The amount of capital invested
o The risks assumed in launching the business
o The existing alternatives for the money being invested
o The existing alternatives for entrepreneur’s time and effort
-
- The business is high potential because sushi is a lifestyle nowadays.
Everybody likes sushi, and sushi cake is a new innovation for kind of sushi.
People start to leave behind to make a cake as lifestyles. For the price it is not
expensive because it contain of so a lot of sushi in every sushi cake. We offer
3 sizes, small, medium, and large. The price is starting from Rp. 600.000-Rp.
2.500.000.
OVERALL ASSESSMENT

Based on the analysis done to investigate the business idea, it can be deduced
that the idea is viable. This business has a lot of potential to grow and so much
opportunity to penetrate the market.

From its product and service feasibility, it is proven that people are now
demanding innovation even in food and beverages industry. Demand and
desirability for such product and business are high. From its industry and target
market feasibility it can be proposed that the business had a lot of prospect to
dominate the market and industry. The business’s industry is not already
saturated; it is categorized in an industry that is open with opportunities. There
are not many competitors just yet. Hence the business idea could be a pioneer in
the market. From the business organizational feasibility analysis, it can be
comprehended that sufficient management expertise are reached. People
involved in the organization are people who are competent and had a lot of
resources. The organization had a good teamwork and good problem-solving
skills. Their expertise is making Sushi Cake is also not doubtful as they have
been making Sushi Cake for several times and constantly improving their skills.
The organization also had a lot of resources and connections from their parents,
family and friends. Lastly is the aspect of financial feasibility. Even though the
business had quite a great start-up cost, it is up to par to its revenue and profit
as the price of the product is not that cheap. Similar sushi businesses are also
making great amount of profit, proving that the business is good.

In conclusion, the idea of Sushi Cake business is viable and is practical. This idea
can then be made into plan in the form of business plan and then taken into
action.
REFERENCES

[http://careerbear.com/operations-manager/article/what-does-an-operations-manager-do].
[http://careerbear.com/operations-manager/article/what-does-an-operations-manager-do]