3-1 chapter three feasibility analysis dr. bruce barringer university of central florida
TRANSCRIPT
3-1
Chapter Three
Feasibility Analysis
Dr. Bruce BarringerUniversity of Central Florida
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Feasibility Analysis
Most effective business plans
Identifying a business idea Screening the idea(s) to determine their
preliminary feasibility Conducting a feasibility analysis Writing the plan
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Figure 3 - 1Step 1Identify a businessidea.
Step 2 Favorable Step 3 Favorable Step 4Screen (or test) the results/proceed Conduct a full results/proceed Prepareidea to determine feasibility a writtenits preliminary Unfavorable analysis Unfavorable businessfeasibility. Results/stop or results/stop or plan
reevaluate idea reevaluate idea
Step 5Present the businessplan toinvestors and others
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Primary research
Original research collected by person completing the analysis
Secondary research Probes data already collected
Feasibility Analysis
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Product/Service Feasibility
Product desirability
Is the product desirable and serve a need in the marketplace?
Is it reasonable?
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Concept Test
A concept test is a preliminary description of a product or service idea to industry experts to solicit their feedback
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Product/Service Demand
Buying intentions survey Gauge customer interest in a
product or service How likely would you be to buy
a product like this if we make it?
Definitely would buy Probably would buy Might or might not by Probably would not buy Definitely would not buy
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Industry/Target Market Feasibility Analysis
IndustryA group of firms producing a
similar product or service
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Target market The limited portion of
the industry that the firm goes after or tries to appeal to
Industry / Target Market Feasibility Analysis
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Industry attractiveness Target market attractiveness Market timeliness
Industry/Target Market Feasibility Analysis
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Industry Attractiveness Large and growing
industries Structurally attractive
Start-ups can enter the industry and compete
Favorable environmental and business trends
Importance of product to its customers
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Target Market Attractiveness
Target market Should be large
enough for the new business but small enough to avoid attracting larger competitors
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Market Timeliness
Window of opportunity Time period that a firm can
enter a market
Economics of the industry Determine if the timing is
right for a new entrant
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Organizational Feasibility Analysis
Management prowess Resource sufficiency
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Financial Feasibility Total start-up cash
needed Financial performance
of similar businesses Overall financial
attractiveness of the proposed venture
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