the business plan: feasibility study for entrepreneurs

The Business Plan: FeasibilityMohammad Tawfik

#WikiCourseshttp://WikiCourses.WikiSpaces.com

The Business Plan:Feasibility



Product Feasibility



Can the product be delivered profitably in an

ongoing manner?



Is there sufficient customers?



Research



Primary research – collect data firsthand and analyze it



Customer surveys and questionnaires



Focus groups



Secondary research – gather data that already has been compiled and analyze it



Prototypes



In-Home trials



Market Feasibility



How attractive is the opportunity?



Is there any strategic niche?



Porter’s Five Forces Analysis



Threats of new entrants



Industry is more attractive when:● Advantages of economies of scale are absent



Industry is more attractive when:● Capital requirements to enter are low



Industry is more attractive when:● Cost advantages are not related to company size



Industry is more attractive when:● Buyers are not loyal to existing brands



Industry is more attractive when:● Government does not restrict the entrance of

new companies



Threats of substitute products



Industry is more attractive when:● Quality substitutes are not readily available



Industry is more attractive when:● Prices of substitute products are not

significantly lower than those of the industry’s products



Industry is more attractive when:● Buyers’ switching costs are high



Bargaining power of customers



Industry is more attractive when:● Customers’ switching costs are high



Industry is more attractive when:● Number of buyers is large



Industry is more attractive when:● Customers want differentiated products



Industry is more attractive when:● Customers find it difficult to collect information

for comparing suppliers



Bargaining power of suppliers



Industry is more attractive when:● Many suppliers sell a commodity product



Industry is more attractive when:● Substitutes are available



Industry is more attractive when:● Switching costs are low



Existing competition



Industry is more attractive when:● Number of competitors is large, or, at the other

extreme, quite small



Industry is more attractive when:● Competitors are not similar in size or capacity



Industry is more attractive when:● Industry is growing fast



Industry is more attractive when:● Opportunity to sell a differentiated product or

service exists



Financial Feasibility



Capital needed to enter the market



Expected revenue



Expected costs



Assignment!

● Perform a feasibility study for your project!● Use a focus group of at least other 4 of your

colleagues to provides customer research● Create an electronic survey to collect

responses from at least 50 of your colleagues regarding your business

● Use educated speculations for the creation of the rest of your study.



References

● Entrepreneurship and Small Business Management, 1/e, Steve Mariotti and Caroline Glackin, 2012, Pearson Education

● Effective Small Business Management, 10/e, Norman M. Scarborough, Prentice Hall, 2011