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FEASIBILITY ANALYSIS: TESTING AN
OPPORTUNITY
DEVELOPING A BUSINESS CONCEPT
Once you have an idea for
a new business, define it
by writing a clear and
BUSINESS CONCEPT
concise business concept.
a clear and concise description
of a business opportunity; it
contains four elements: the
product or service, the
customer, the benefit, and the
 
distribution.
Its purpose is to focus your
thinking.
FEASIBILITY ANALYSIS: TESTING AN
OPPORTUNITY
DEVELOPING A BUSINESS CONCEPT

Product or Service What is being offered?

This is the solution to the
problem
Customer Who is it? They pay for
the product.
Benefits and Features Benefit- promotes or
enhances the value of
product.
Feature – distinctive
aspect, quality, or
characteristic of a
product
Delivery Retail, wholesales, mail
order, Internet, door-to-
door?
FEASIBILITY ANALYSIS: TESTING AN
OPPORTUNITY
Developing a Business Concept

In developing a business
concept, consider the
features and benefits
your product or service
offers.

BENEFITS
things that promote or enhance
the value of a product or a
service to the customer
FEASIBILITY ANALYSIS: TESTING AN
OPPORTUNITY
Testing the Concept in the Market

An entrepreneur can use a

feasibility analysis in order to
decide if there is enough demand
for a product or service.
FEASIBILITY ANALYSIS
the process that tests a
business concept; it allows the
entrepreneur to decide whether
a new business concept has
potential
FEASIBILITY ANALYSIS: TESTING AN
OPPORTUNITY
TESTING THE CONCEPT IN THE MARKET

A feasibility analysis can help an

entrepreneur determine whether
business conditions are appropriate to go
forward with starting a business.
FEASIBILITY ANALYSIS: TESTING AN
OPPORTUNITY
Testing the Concept in the Market

customers
product and
industry
service
Feasibility
Analysis founding
value chain Questions team

start-up needs competition

FEASIBILITY ANALYSIS: TESTING AN
OPPORTUNITY
Testing the Industry

The broadest level of

feasibility analysis looks
at the industry in which
the business will operate.
INDUSTRY
a group of businesses with a
common interest
FEASIBILITY ANALYSIS: TESTING AN
OPPORTUNITY
TALKING TO THE CUSTOMER
The most important part
of the feasibility analysis
is testing customers to
measure interest and
identify the target
customers. TARGET CUSTOMERS
people most likely to buy a
business’s products and services
FEASIBILITY ANALYSIS: TESTING AN
OPPORTUNITY
TESTING PRODUCT OR SERVICE REQUIREMENTS

PROTOTYPE
To consider all of the
a working model used by
requirements of a product
entrepreneurs to determine
or service, create a what it takes to develop their
prototype. products or services
FEASIBILITY ANALYSIS: TESTING AN
OPPORTUNITY
TESTING PRODUCT OR SERVICE REQUIREMENTS

Need to design prototypes.

These types of prototypes are not physical, they are designs,

blueprints, story boards, or flowcharts that map out the business
and the processes that will take place at the business.

Intellectual Property – protect your prototype through patents,

trademarks, copyrights, and trade secrets.
FEASIBILITY ANALYSIS: TESTING AN
OPPORTUNITY

STUDYING THE COMPETITION

An easy way to evaluate

the competition is to
create a competitive grid.
COMPETITIVE GRID
a tool for organizing important
information about a business
venture’s competition
FEASIBILITY ANALYSIS: TESTING AN
OPPORTUNITY
Competitive Customer Benefits Distribution S/W

Large gyms Individuals Get fit, Direct S- Resources to

seeking to convenience through retail enter O2 Max’s
improve their gym niche
fitness W- no programs
for teens
DVD Fitness Individuals Get fit, Online and S-easy to use
Programs seeking to Convenience, offline retail inexpensive
exercise at Save money outlets W- no on-site
home guidance
O2 Max Parents Peace of mind Direct S- teens more
Fitness through retail likely to stay
center involved
W- costly in
terms of
building and
equipment
FEASIBILITY ANALYSIS: TESTING AN
OPPORTUNITY
LOOKING AT START-UP RESOURCES

A strong business model

is important to investors.

BUSINESS MODEL
a description of how
entrepreneurs plan to make
money with their business
concepts
 FEASIBILITY ANALYSIS: TESTING AN
OPPORTUNITY
ANALYZING THE VALUE CHAIN

A business can create a

competitive advantage by
improving the value chain
or its products and
services. VALUE CHAIN
The value chain includes the distribution channel through
manufacturers, which a product or service flows
distributors, and from the producer to the
retailers. customer
 THE BUSINESS PLAN
The Business Plan: Your Road Map to
Entrepreneurial Success

 A business plan presents a

strategy for turning a feasible
business concept into a successful
S P LAN
business.
U SI NE S
s c r ib es a
B a t de g y to
 Once you have a feasible business t t h a t e
men s tr
a docu iness and a
concept, the next step is to us ss
new b hat busine
develop a business plan. t
launch
 The Parts of a Business Plan
Cover Page Market Analysis

Title Page Competitive Analysis

Table of Contents Marketing Plan

Executive Summary Operations Plan

Management Plan Organizational Plan

Company Description Financial Plan

Product and Service Plan Growth Plan

Mission and Vision Statements Contingency Plan

Industry Overview Supporting Documents

 THE BUSINESS PLAN
Executive Summary
 The executive summary should include the
most important information from each
section of the business plan.

 To save time, investors and lenders rely on

the executive summary to help them decide
whether the business plan is worth pursuing.

executive summary
a brief recounting of the key points
contained in a business plan
 THE BUSINESS PLAN
Management Team Plan
The management team presents your qualifications and those of any
partners.
 
You must describe how your management team has the capabilities to
execute your business plan.
 THE BUSINESS PLAN
Company Description

 The company description section of the business plan outlines the

company’s background information and basic business concept.
 THE BUSINESS PLAN
Product and Service Plan

 In the product and service plan section of the business plan, you present
the nature of your business and the unique features of the product or
service.
 THE BUSINESS PLAN
Vision and Mission Statements

 The vision statement and

mission statement state
the guiding principles by
which a company functions.
mission statement
a declaration of the specific
aspirations of a company, the major
goals for which it will strive
 THE BUSINESS PLAN
Industry Overview

 The industry overview section of the business plan

presents your research into the industry, those
companies providing similar, complementary, or
supplementary products or services.
 THE BUSINESS PLAN
Market Analysis

 The market analysis section of the business plan presents your research
on the customer profile gathered from primary and secondary marketing
research resources.

 The results help you determine your overall marketing and sales
strategies.
 THE BUSINESS PLAN
Competitive Analysis

 The competitive analysis section of the business plan should demonstrate

that the proposed business has an advantage over its competitors.
 THE BUSINESS PLAN
Marketing Plan

 A marketing plan discusses how a company plans to make its

customers aware of its products or services.

 A marketing plan also describes the market niche, pricing, company

image, marketing tactics, a media plan, and a marketing budget.
 THE BUSINESS PLAN
Operational Plan
 The operational plan describes all the
distribution channel
processes involving the production and
delivery of the product or service. the means by which a product or
service is delivered to the customer
 The operational plan describes the
distribution channel
of the product or service.
direct channel
 The operational plan describes the the means of delivering a service or
direct channel and/or indirect product directly to the customer,
channel you will use to deliver your
such as via a Web site
product or service.
 THE BUSINESS PLAN
Organizational Plan

 The organizational plan section of a business plan looks at the

people aspects and the legal form of the business.

 It also describes the roles and compensation of key

management personnel and important employment policies.
 THE BUSINESS PLAN
Financial Plan

 The financial plan presents forecasts for the future of the business.

 The financial plan includes financial statements.

 THE BUSINESS PLAN
Growth Plan
 The growth plan describes how the
business will expand in the future.

 Investors and lenders like to see

that a business has plans to grow in a
planned and controlled way.
 THE BUSINESS PLAN
Contingency Plan

 The contingency plan section of the business

plan looks at the risks to business, such as
changing economic conditions and lower-
than-expected sales.

 It then suggests ways to minimize the risks.

 THE BUSINESS PLAN
Cover Page, Title Page, Table of Contents, and
Supporting Documents

 Every business plan should have a cover page, a title page, a table of
contents, and supporting documents.
 THE BUSINESS PLAN
Developing a Business Plan

Make a research plan and gather

data.
Set up a notebook to organize
data.
Write a first draft.
 THE BUSINESS PLAN
Common Mistakes in Preparing Business Plans

projecting exaggerated growth levels

trying to be have expertise in all areas

claiming performance above industry averages

underestimating the need for capital

SOURCES OF BUSINESS PLAN INFORMATION

Small Business Administration (SBA)

Service Corps of Retired Executives (SCORE)

Small Business Development Centers (SBDCs)

Chamber of Commerce

Trade Associations
 THE BUSINESS PLAN
Small Business Administration (SBA)

 To encourage entrepreneurship
in our free enterprise system,
the government operates the
Small Business Administration
(SBA). Small Business Administration (SBA)
 The operational plan describes
the federal agency that provides
the services to small businesses and new
distribution channel entrepreneurs, including counseling,
of the product or service. publications, and financial aid
 THE BUSINESS PLAN
Trade Associations

 Trade associations supply information

to entrepreneurs about start-up
issues, operating costs, and analysis of
trends.
trade association
an organization made up of
individuals and businesses in a
specific industry that works to
promote that industry
 THE BUSINESS PLAN

1 Bind the plan.

2 Use index tabs to separate sections.

3 Use an easily readable 12-point type.

4 Use bold subheadings and bullets.

5 Use the company logo at the top of every page.

Number each copy of the business plan and include a

6 statement of confidentiality.
Include a statement on the cover page prohibiting copying
7 of the plan.