Reference no: EM131047714 , Length:

Market Feasibility

1. What is the size of the market?

2. What is the growth rate of the industry?

3. Is the market at full capacity?

4. Where are customers getting the product now?

5. Where are the customers?

6. How many would purchase from you?

7. What external factors come to bear? Government, Industry Dynamics

8. What keeps new competition from entering this market? (Barriers to Entry)

Technical Feasibility

1. What are the options for developing the technology (customer, off the shelf, design yourself, subcontract)?

2. What are the options for producing the product or service?

- In House
- Subcontract
- License
- Joint Venture or Partnership
- Combination

3.What are the options for Sales and Distribution?

- In House
- Whole Sale
- Distributors or Sales Representatives
- License
- Joint Venture or Partnership
- Combination

4.What resources are required for development and are they available to you (skills, raw materials, components, suppliers, facilities & equipment)?

5. What are the laws and regulation relating to the business?

- Industry Standards or Regulations
- Personal Certifications
- Intellectual Property (Patents, trademarks, copyrights)
- Environmental Liability

6. Has the research discovered any moral or ethical issues that you are uncomfortable with?

7. What technological changes are changing or emerging that may affect the business?

Financial Feasibility

1 What are the projected Revenues from the sale of your product or service?

- From the Market Research, what is the projected sales volume in "units sold?" and in "dollars sold"?
- From the Market Research, what is the selling price per unit?
- What is the total expected revenue?

2. What are the financial dynamics and opportunities?

- Costs Structure (per unit basis)
- Price per unit minus
- Variable Costs (Cost of Goods Sold & Controllable Costs) per Unit equal
- Gross Margin per Unit minus
- Fixed Costs per Unit equal
- Net Margin per Unit

3. How much investment is required?

- One Time Assets and Startup Expenses
- Plant & Equipment
- Leasehold Improvements
- Initial Inventories
- Research & Development
- Legal
- Experts
- Operating expenses prior to break even

4. What are the financial risks?

- Payback (Investment required divided by net margin per unit - Date when units calculated above are sold & collected.)
- Risk vs. Reward (Personal feelings of the risks and rewards)
- Opportunity Costs (Can you get a better return somewhere else?)
- Personal Financial Risk (What will you have to give up. Sign over mortgage etc.)

5. What are the possible sources of financing?

- Chances of getting the money?
- What will you have to give up?

6. General Financial Numbers that would indicate attractiveness of Venture
- Gross Margin 20 - 30% plus
- Net Profit Margin - 10 to 15%. Plus
- Return on Investment - 15% plus
- Payback - 3 years or less.
- Break even - 2 years or less
- Note: These numbers must not be looked at in isolation over a one year period. You need to look at the numbers over a 3 year period and as a whole, not just individually. Industry averages can be quite different.

Human Resource Feasibility
Questions:
1. What technical and management experience is required?
2. Who are the owners and what are their roles? (Entrepreneur, Manager, Tech. Expert)
3. What is the ownership structure?

4. What are the manpower requirements?
- How will you find the right employees?
- How will you compensate employees (pay for time, for production, for knowledge, or a combination)?
- How will you motivate employees?
- What training will they need on an ongoing basis?

5.What is the company's growth strategy?
- How will quality be managed and maintained÷
- How will organizational structures change with growth?
- What career paths will employees have available?

Appendix A
Start-up Expenditures and Expenses Worksheet
Item Total Cost Cash Required
Land __________ __________
Capital Equipment __________ __________
Computer __________ __________
___________ __________ __________
___________ __________ __________
Beginning Inventory __________ __________
Start up Supplies __________ __________
Licenses and Permits __________ __________
Leasehold Improvements __________ __________
Utility hookups& Installation __________ __________
Advertising (Preopening) __________ __________
Insurance __________ __________
Other __________ __________
_______________ __________ __________
Total Estimated One-Time Cash Requirements __________ __________

Start-up Operating Expenses
Estimate No. of Months Total Cash
Item Monthly Expense X Before Break even = Required
Owners Salary __________ __________ __________
Employee's salary, wages, benefits __________ __________ __________
Rent __________ __________ __________
Promotion expenses __________ __________ __________
Supplies and postage __________ __________ __________
Vehicle Expenses __________ __________ __________
Telephone __________ __________ __________
Travel __________ __________ __________
Interest __________ __________ __________
Maintenance __________ __________ __________
Other __________ __________ __________
____________ __________ __________ __________
Total Cash Required to Cover Operating Expenses _________
Plus: Total One-Time Cash Requirements (Previous Table) __________
Add 10% Safety Factor __________
Total Cash Required for Start-up _________

Prepare a business plan for a new organisation / existing organisation of your choice?

Make sure that you have also reviewed the additional resource about the parts / structure of a GOOD Business Plan.

Title page Executive Summary (not included in word count) V Headings Table of Contents Introduction Section headings Market feasibility Technical feasibility Human feasibility Financial feasibility References Appendix ^ (Please remember to use harvard style referencing)