Feasibility and Business Planning Unit 2, Chapter 5 Page 93-113

Feasibility and Business Planning After completing this chapter, you’ll be able to: Discuss the importance of defining a prospective business by writing a clear and concise business concept Describe how feasibility studies can be used to test concepts Describe the components and formats of a Business Plan Describe how to professionally package and present a Business Plan

Feasibility and Business Planning Definition 1- A (n) _________ is a clear and concise description of an opportunity Business Concept It contains four elements: Product/Service, Customer, Benefit(s), and Distribution Answer these elements as questions

Feasibility and Business Planning Definition 2 _____________a distinctive aspect, quality, or characteristic of a product or service Feature Definition 3 Something that promotes or enhance the value of a product or service is a ____________ Benefit After you answer the questions you can write a concept statement

Feasibility and Business Planning Once you have a clear and concise concept statement, ask yourself “What is the compelling reason for this business to exist?” Once you answer that question, you can begin to shape your concept

Feasibility and Business Planning Testing the Concept Definition 4 A _______________ is the process used to test a business concept Feasibility Analysis The FA helps an entrepreneur decide whether this new concept has potential

Feasibility and Business Planning The FA also helps to decide if there is enough demand and whether business conditions are appropriate to move forward The FA asks questions relating to the industry, customers, product/service requirements, founders, competition and start-up needs

Feasibility and Business Planning Create a Competitive Grid The CG is a tool for organizing information about the Competition Column 1- Direct and Indirect Competitors Column 2- Primary Target Customers Column 3- Benefits of the Competitor Column 4- Distribution Column 5- Strengths/Weaknesses

Feasibility and Business Planning Look at your Start-Up resource needs Definition 5 A _____________ describes how you intend to make money with your business concept Business Model What are things you would need to purchase?

Feasibility and Business Planning Purchase or lease equipment, furnishings, and a facility Starting inventory/supplies Pay employees Finish product development Carry the company’s expenses until you have positive cash flow (Sales)

Feasibility and Business Planning 1.) What is the purpose of a business concept? 2.) List the four components of an effective business concept. 3.) Discuss two things a Feasibility Analysis accomplishes.

Feasibility and Business Planning Section 6.2 Your Roadmap to Entrepreneurial Success Definition 6 A _________ is a document that describes a new business and strategy to launch that business Business Plan It shows start-up, growth, and is a complete and detailed picture of the business

Feasibility and Business Planning There are roughly 15parts to a detailed Business Plan Part 1 Definition 7 ____________ is a brief recounting of the key points of the plan Executive Summary It is completed last but listed first in the plan? Why?

Feasibility and Business Planning 2.) Management Team Plan You and your team’s qualifications 3.) Company Description Outlines the size, scope, and type of business 4.) Product and Service Plan What is the product or service you are offering? Do you plan to have spin-offs?

Feasibility and Business Planning Part 5 Definition 8- A ____________ establishes the scope and purpose of a company and reflects its values and beliefs Vision Statement

Feasibility and Business Planning Part 6 Definition 9 The _________ expresses the specific aspirations for the company, the major goals for which it will strive Mission Statement

Feasibility and Business Planning 7.) Industry Overview Research in the industry: Look at companies providing similar, complementary, or supplementary goods and services 8.) Market Analysis- Your research on the Customer Profile 9.) Competitive Analysis- How your business will be superior to the competition. What are your AND their Strengths and Weaknesses?

Feasibility and Business Planning 10.) Marketing Plan How will you make people aware of your product and service? 11.) Operational Plan What distribution channels will you use? Direct or Indirect? Both?

Feasibility and Business Planning 12.) Organizational Plan How will company be structured? SP, Partnership, LLC? 13.) Financial Plan The financial forecast for the business 14.) Growth Plan How will the business expand in the future?

Feasibility and Business Planning 15.) Contingency Plan Identify possible risks Minimize Risks

Feasibility and Business Planning 1. Why should you develop a business plan after you know you have a feasible concept? 2. In a business plan, what is the difference between the Market Analysis and the Marketing Plan? 3. Describe the importance of Vision and Mission Statements in identifying the direction and objectives of a business.