Feasibility Analysis

Feasibility Analysis

 

Every entrepreneur should complete a feasibility study before writing a full-blown business plan. While preparing the feasibility study you may uncover information that helps you fine-tune or refocus your idea(s), or you may conclude that the business simply is not feasible. This document describes your feasibility study.

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When conducting your feasibility study, do not exaggerate or misrepresent who you are, your capabilities, and the facts of the business. As in real life, your plan will be penalized if you make factual statements that you cannot substantiate. For example, do not say you have conducted a market survey that you have not done, and please represent your experience and skills accurately.

 

Feasibility Study Outline and Evaluation

The Feasibility Study outline is intended to help you complete your study in a logical manner. Answering these questions will help you put together the essential elements of the study. In this early stage of idea development, understand that you will have only part of the information needed to build a solid business plan. Nonetheless, use your best judgment and research skills to thoroughly answer all of the questions.

 

Proposed Venture: Laptop doubles as a printer (two in one laptop)

 

 

 

The feasibility study should include:

 

1. Business Concept (20 points)

2. Industry Analysis (20 points)

3. Founding Team (10 points)

4. Sales Strategy (20 points)

5. Financial Plan (20 points)

6. Feasibility Decision (20 points)

7. Bibliography (5 points)

 

 

 

 

Feasibility analysis guidelines

 

1. Business Concept

This is a short section: clear, direct, and to the point. Use the two-sentence format from Geoff Moore:

 

For people in the healthcare or education industry who require access to printers daily, Computer Prints is a technological product that allows you to print anytime, anywhere! Unlike a stationary printer, our product is attached and set up directly to your personal laptop.

 

 

2. Industry Analysis

Describe and outline the industry in which you will compete. When finished with this section, you and your readers should understand the dynamics, problems, and opportunities driving your industry.

2.a. What is the industry(ies) that addresses this market?

2.b. What trends are important in this industry?

2.c. Who are the major competitors (in an industry sense)? It may make sense to discuss competitors in

terms of genres or competitors or in terms of the big players in the industry. If your company is operating

locally, you may want to profile the industry’s big players here and leave the specific competitors for the

Market Analysis section.

2.d. How large is the industry? What is its growth potential?

 

 

 

3. Founding Team

Upon reading this section, the reader should have a good idea of who you are and where you are going with your company.

3.a. Who is on the founding team? What are their qualifications, expertise and experience? What other resources or expertise do your team require to be successful? How will you obtain those resources? What roles will various people play?

3.b. What is your overall strategy and what objectives do you have? What are your goals for the company (keep it small, grow it big, franchise it…)? What is the exit strategy for yourselves and for your investors (sell to a larger company, go public, buy out investors…)?

 

4. Sales Strategy

How will you reach your customers? How will you close the sale with your customers? Remember, nothing happens until the sale is made.

4.a. How will you distribute your product/service to the customer? What distribution channels will you use (e.g., direct sales, mail-order, wholesalers, etc.)?

4. b. What is your pricing strategy? How much will you charge for your product/service? How does your pricing decision affect demand forecasts and market positioning?

4. c. How will your product or service be sold? Who will do the selling (your own salespeople, manufacturing representatives, etc.)?

4.d. How will you communicate with your customers (e.g., advertising, promotions, etc.)? Be specific.

4.e. How will your customers learn you exist? How will you convince customers to come to your company for services or products?

4.f. What is your risk assessment associated with the sales strategy? What actions will you take if sales are less than expected? What if sales are greater than expected?

 

5. Financial Plan

5.a. How much up-front cash do you need to start the business? Deposit for lease, down payment on equipment, permits, improvements, supplies, insurance, computer, advertising, salaries etc. Provide a full and realistic breakdown.

5.b. How much will it cost to produce your product or service? Provide a full and realistic breakdown of your fixed costs and variable costs?

5.c. How much do you expect to sell every month? How much money will this bring in? This is your cash inflow.

5.d. How do you expect sales and revenues to change over time?

6. Feasibility Decision

This is the bottom line. You may have decided that the business is not feasible. If so, it’s better to find out on paper. If you decide there is a good opportunity, however, complete the “Timeline to Launch” section.

 

6.a. Based on the financial analysis you have undertaken above, does this business look attractive enough to proceed?

6.b. If this business is not feasible, what needs to change to make it feasible? Are there specific market conditions that need to change? Would the business/organization be feasible if it were pursued as a corporate new venture or an internal project by a mid- or large-size existing organization? Why?

6.c. What are the strengths and weaknesses of this business? Be specific.

7. Bibliography

 

This section lists your sources. Use one of the accepted formats, e.g. APA or MLA formatting. Alternatively, you may use footnotes.

 

 

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