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37 Cards in this Set
- Front
- Back
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the process of determining if a business idea is viable |
feasibility analysis |
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Failure to properly investigate the merits of a business idea before developing a business model and a business plan is written runs the risk... |
of blinding an entrepreneur to inherent risks associated with the potential business and results in too positive of a plan |
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There are four key areas to feasibility analysis |
product/service feasibility industry/target market feasibility organizational feasibility financial feasibility |
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research that is collected by the person or persons completing the analysis |
Primary Research |
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probes data that is already collected |
secondary research |
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The key objective behind feasibility analysis is to... |
put an idea to the test |
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an assessment of the overall appeal of the product or service being proposed |
product/service feasibility analysis |
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The first component of product/service feasibility is to... |
affirm that the proposed product or service is desirable and serves a need in the marketplace |
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involves showing a concept statement to industry experts and prospective customers to solicit their feedback |
concept test |
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a preliminary description of a product or service idea |
concept statement |
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It should be distributed to... |
people who will provide candid and informed feedback and advice |
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The second component of product/feasibility analysis is to... |
determine if there is demand for the product or service. |
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Three commonly utilized methods for determining demand include |
1. talking face to face with potential customers 2. utilizing online tools 3. library, internet, and gumshoe research |
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a single web page that typically provides direct sales copy |
landing page |
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you're eliciting responses from... |
a self-selected group of potential buyers |
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a detective or an investigator that scrounges around for information or clues wherever they can be found |
gumshoe |
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an assessment of the overall appeal of the industry and the target market for the product or service being proposed |
industry/target market feasibility |
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is a group of firms producing a similar product or service |
industry |
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four examples of industries |
computers children's toys airplanes social networks |
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the limited portion of the industry that it goes after or to which it wants to appeal |
target market |
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There are two components to industry/target market feasibility analysis:
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industry attractiveness and target market attractiveness |
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The top three factors are particularly important to industry attractiveness: |
1. industries that are young rather than old 2. are early rather than late in their life cycle 3. are fragmented rather than concentrated |
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Most successful start-ups either... |
introduce a new product into an existing market or introduce a new market to an existing product |
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The challenge in identifying an attractive market is to find.. |
a market that's large enough for the proposed business but yet is small enough to avoid attracting larger competitors at least until the entrepreneurial venture can get off to a successful start |
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conducted to determine whether a proposed business has sufficient management expertise, organizational competence, and resources to successfully launch |
organizational feasibility analysis |
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There are two primary issues to consider in the organizational feasibility area: |
management prowess and resource sufficiency |
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A proposed business should evaluate... |
the prowess or ability of its initial management team |
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Two of the most important factors in the area of management prowess are: |
the passion that the solo entrepreneur or the management team has for the business idea the extent to which the management team or solo entrepreneur understands the markets in which the firm will participate |
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the group of founders, key employees, and advisers that either manage or help manage a new business in its start-up years |
new-venture team |
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One thing that many potential business founders find while assessing management prowess is that they may... |
benefit from finding one or more partners to help them launch their business |
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To test resource sufficiency, a firm should list... |
the 6 to 12 most critical non financial resources that it will need to move its business idea forward and determine if those resources are available |
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the final component of a comprehensive feasibility analysis |
financial feasibility analysis |
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The most important issues to consider at the financial feasibility analysis stage are... |
total start-up cash needed financial performance of similar businesses the overall financial attractiveness of the proposed venture. |
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An actual budget should be prepared that lists... |
all the anticipated capital purchases and operating expenses needed to get the business up and running. |
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The second component of financial feasibility analysis is estimating.. |
a proposed start-up's potential financial performance by comparing it to similar, already established businesses. |
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offers detailed financial reports on thousands of individual firms |
substantial archival data |
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To gain prospective, a start-up s projected rate of return should be weighed against the following factors to assess whether the venture is financially feasible: (4) |
the amount of capital invested the risks assumed in launching the business the existing alternatives for the money being invested the existing alternatives for the entrepreneur's time and efforts |
