1. September 2005 Feasibility Workbook

2. © 2005 Virtue Ventures LLC. Licensed under a Creative Commons Attribution-Share Alike 3.0 License. : The Social Enterprise Team Step 1 : The Social Enterprise Team List Social Enterprise Team Members 1.Team Leader (project champion: 2.Staff members (or volunteers): 3.Financial 4.Marketing: 3.Board members: 4.Industry experts or consultants :

3. © 2005 Virtue Ventures LLC. Licensed under a Creative Commons Attribution-Share Alike 3.0 License. 3 Step 2: Define the Opportunity What will you provide? How is it unique? How will you build/develop it? Who would be your customers? What value will you provide to these customers? Will you be meeting a currently unmet need/demand? What current product/service will you be competing with?

4. © 2005 Virtue Ventures LLC. Licensed under a Creative Commons Attribution-Share Alike 3.0 License. 4 Step 3: Set Goals for Market Research Write down the 3-6 most important areas you would like to research as you assess the feasibility of your chosen opportunity. These areas should include any “deal-breakers” for the organization. 1.2.3.4.5.1.2.3.4.5.

5. © 2005 Virtue Ventures LLC. Licensed under a Creative Commons Attribution-Share Alike 3.0 License. 5 Step 4: Define Your Customers 1. Who is your target customer? 2. What are their demographics (i.e. age, sex, location, income, etc.)? 3. What are their psychographics (i.e. attitudes, interests, lifestyles, etc.)? 4. What benefits do they want (i.e. convenience, safety, etc.)? 5. How do they make purchasing decisions? 6. What are they willing to pay? 7. What are they able to pay? 8. Why will they choose you?

6. © 2005 Virtue Ventures LLC. Licensed under a Creative Commons Attribution-Share Alike 3.0 License. 6 Step 5: Understand Your Market 1. How big is the market (i.e. number of competitors, market revenues, etc.)? 2. Is the market growing or contracting (i.e. growth rates, etc.)? 3. What are the major trends in this market? 4. How is the market segmented? 5. What is the average profitability of businesses in this market (i.e. profit margins, etc.)? 6. What are the major barriers to entry in this market (i.e. capital requirements, licenses, economies of scale, etc.)? 7. What are the key success factors in this market?

7. © 2005 Virtue Ventures LLC. Licensed under a Creative Commons Attribution-Share Alike 3.0 License. 7 Step 6: Define Your Competition. 1. How large are each of your major competitors (i.e. revenues, staff size)? 2. What products/services do they offer? 3. What makes them unique? What is their specialization? 4. What do they charge for their products/services? 5. Who is their target market? 6. How do they market their product/service? 7. Are they growing or contracting? 8. How do you differentiate your product/service from your competitors?

8. © 2005 Virtue Ventures LLC. Licensed under a Creative Commons Attribution-Share Alike 3.0 License. 8 Competition Tip The more you can learn about a competitor, the better. Tip: Not only will the information help you understand the competition more clearly, but it also can help you identify any unmet demands and/or needs in the market. In addition, knowing the competition will allow you to begin developing your unique value proposition to target customers.

9. © 2005 Virtue Ventures LLC. Licensed under a Creative Commons Attribution-Share Alike 3.0 License. 9 Step 7: Business Model 1. How do businesses typically operate in this market? 2. How are they staffed? 3. How are the staff compensated? 4. What are the equipment/resource requirements? 5. What skills/expertise are needed? 6. What are the typical financial benchmarks for businesses in this industry? 7. Are there special regulations/ accreditation requirements that businesses in this industry must meet? 8. Are there any relationships with key stakeholder groups that businesses in this industry must establish (i.e. unions, government, etc.)?

10. © 2005 Virtue Ventures LLC. Licensed under a Creative Commons Attribution-Share Alike 3.0 License. 10 Business Model Tip Operational structures typically are similar across markets. Calling or visiting a business in another area can help you learn about this aspect of a business. Example: If you are considering opening a dry-cleaning business or restaurant, someone who operates one of these ventures in another city will be more likely to talk with you about their structure because you do not represent a threat to their business.

11. © 2005 Virtue Ventures LLC. Licensed under a Creative Commons Attribution-Share Alike 3.0 License. 11 Step 6: Estimates of Viability (1) Assumptions: What assumptions are you using to develop your financial assessment?

12. © 2005 Virtue Ventures LLC. Licensed under a Creative Commons Attribution-Share Alike 3.0 License. 12 Step 6: Estimates of Viability (2) Break-even analysis - determines at which point your revenues from sales equal your costs. Called the break-even or “death point.” Break-even point - the point at which your revenues from sales equal your costs.

13. © 2005 Virtue Ventures LLC. Licensed under a Creative Commons Attribution-Share Alike 3.0 License. 13 Financial Viability Tip Developing worst-case, best-case, and expected-case scenarios can help inform future decision-making processes. Tip: When estimating viability or profitability, always underestimate revenues numbers and overestimate costs.

14. © 2005 Virtue Ventures LLC. Licensed under a Creative Commons Attribution-Share Alike 3.0 License. 14 Step 8: Assess Organizational Capacity 1. How well does this opportunity fit with the organization’s current skills/expertise? 2. Will we need to buy outside expertise? Can we acquire it at an affordable cost? 3. What is the investment required to launch and grow the business? 4. Do we have a potential competitive advantage? 5. How long will it take to turn the opportunity into a reality? 6. What residual benefits will we receive from starting and operating this business? 7. Is this opportunity something the organization will enthusiastically support?

15. © 2005 Virtue Ventures LLC. Licensed under a Creative Commons Attribution-Share Alike 3.0 License. 15 Organizational Capacity Tip It is always best to take a realistic view of your organization when evaluating a business opportunity. Tip : Be painfully honest when looking at your organization’s capacity. Remember, you are assessing the business opportunity, not the organization itself.

16. © 2005 Virtue Ventures LLC. Licensed under a Creative Commons Attribution-Share Alike 3.0 License. 16 Step 8: Assess Organizational Capacity (2) * Does your organization currently have this resource/skill? **How easily can your organization acquire this resource/skill at a reasonable cost? Rank: high, medium or low

17. © 2005 Virtue Ventures LLC. Licensed under a Creative Commons Attribution-Share Alike 3.0 License. 17 Step 9: Assess Risks Overall Risk of Opportunity: High / Medium / Low

18. © 2005 Virtue Ventures LLC. Licensed under a Creative Commons Attribution-Share Alike 3.0 License. Step 10: Assess Opportunities Opportunity 2 Market profitability Market size Overall attractiveness to organization Market factors Favorable competitive factors Ease of entry (based on investment required) Opportunity 3Opportunity 1 Fit with org. skills/expertise Internal factors Fit with org.’s equipment/ facilities Ease of implementation Fit with org.’s other assets Market growth Likely competitive advantage Rank each category: High Medium Low Add criteria in rows as needed.

19. © 2005 Virtue Ventures LLC. Licensed under a Creative Commons Attribution-Share Alike 3.0 License. Feasibility Work Plan (1) Goal: Research Question 1: Research Question 2:

20. © 2005 Virtue Ventures LLC. Licensed under a Creative Commons Attribution-Share Alike 3.0 License. Feasibility Work Plan Goal: Research Question 3: Research Question 4:

21. © 2005 Virtue Ventures LLC. Licensed under a Creative Commons Attribution-Share Alike 3.0 License. Feasibility Work Plan Goal: Research Question 5: Research Question 6:

22. © 2005 Virtue Ventures LLC. Licensed under a Creative Commons Attribution-Share Alike 3.0 License. Feasibility Work Plan Goal: Research Question 7: Research Question 8: