Entrepreneurship 03356

Quick Look Feasibility Analysis Report Template

Adapted from “Preparing Effective Business Plans” by Bruce R. Barringer,
Pearson Education, Inc. Publishing as Prentice Hall

Introduction
A. Name of the proposed business
B. Name of the students in the group (the founding team)
C. One paragraph summary of the business

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Part 1: Product/Service Feasibility
Issues Addressed in This Part
A. Stakeholders
B. Product/service desirability
C. Product/service demand

Stakeholders
 Briefly outline who your idea’s stakeholders are, their role and activities that
support your business model. Fill in as many stakeholders as required in the table
below

Stakeholder Role Activity or contribution to Business model

Concept Statement Test

* What were the strengths of the product or service idea—things people who
evaluated your product or service concept said they “liked” about the idea
* Suggestions for strengthening the idea—suggestions made by people for
strengthening or improving the idea
* Overall feasibility of the product or service concept—report the number of
people who thing the idea is feasible, the number of people who think it isn’t
feasible, and any additional comments that were made
* Other comments and suggestions that customers or stakeholder made

Buying Intentions Survey

 To complete this section distribute the concept statement to 15 to 30 prospective
customers (do not include any of the people who completed the concept statement
test) with the following buying intentions survey attached. Ask each participant to
read the concept statement and complete the buying intentions survey.

 How likely would you be to buy the product or service described above?
Definitely would buy
______ Probably would buy
______ Might or might not buy
______ Probably would not buy
______ Definitely would not buy

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 Additional questions may be added to the buying intentions survey.

Record the number of people who participated in the survey and the results of the survey
here.

 Along with the raw data recorded here, report the percentage of the total number of
people you surveyed that said they would probably buy or definitely would buy your
product or service if offered. This percentage is the most important figure in gauging
potential customer interest.

Part 1 Conclusion (expand fields and report findings, in discussion form, for each area)
A. Stakeholders – Comment on the stakeholder interviews and feedback. How did
this information improve your business idea or model?
B. Product/service desirability – Comment on how desirable you’re your product is
from your concept test
C. Product/service demand – Comment on the findings of your buyers survey
D. Product/service feasibility (circle the correct response)
Not Feasible Unsure Feasible
E. Suggestions for improving product/service feasibility.

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Part 2: Industry/Market Feasibility
Issues Addressed in This Part
A. Industry attractiveness
B. Target market attractiveness
C. Timeliness of entry into the target market

A. Industry Attractiveness
 Assess the attractiveness of the industry the potential business plans to enter on each
of the following dimensions.

Industry Attractiveness Assessment Tool

(used to assess the broad industry, rather than the specific target market, you plan
to enter)
Low Potential Moderate Potential High Potential
1. Number of competitors Many Few None
2. Age of industry Old Middle aged Young
3. Growth rate of industry Little or no Moderate growth Strong growth
growth
4. Average net income for Low Medium High
firms in the industry
5. Degree of industry Concentrated Neither Fragmented
concentration concentrated nor
fragmented

6. Stage of industry life Maturity Growth phase Emergence

cycle phase or phase
decline phase
7. Importance of industry’s “Ambivalent” “Would like to “Must have”
products and/or services have”
to customers
8. Extent to which business Low Medium High
and environmental
trends are moving in
favor of the industry
9. Number of exciting new Low Medium High
product and services
emerging from the
industry
10. Long-term prospects Weak Neutral Strong

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B. Target Market Attractiveness
 Identify the portion or specific market within your broader industry that you plan to
target.
 Assess the attractiveness of the target market on each of the following dimensions.

Target Market Attractiveness Assessment Tool

(used to assess the specific target market, rather than the broader industry, you plan
to enter)
Low Potential Moderate Potential High Potential
1. Number of competitors Many Few None
in target market
2. Growth rate of firms in Little to no Slow growth Rapid growth
the target market growth
3. Average net income for Low Medium High
firms in the target
market
4. Methods for generating Unclear Somewhat clear Clear
revenue in the industry
5. Ability to create “barriers Unable to May or may not be Can create
to entry” for potential create able to create
competitors
6. Degree to which Satisfied Neither satisfied or Unsatisfied
customers feel satisfied by dissatisfied
the current offerings in the
target market
7. Potential to employ low Low Moderate High
cost guerrilla and/or buzz
marketing techniques to
promote the firm’s product
or services
8. Excitement surrounding Low Medium High
new product/service
offerings in the target
market

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C. Market Timeliness
 Determine the extent to which the “window of opportunity” for the proposed business
is open or closed based on the following criteria.
 Determine the timeliness of entering a specific target market based on other criteria.

Market Timeliness Assessment Tool

Low Potential Moderate Potential High Potential
1. Buying mood of Customers are Customers are in a Customers are
customers not in a buying moderate buying in an aggressive
mood mood buying mood
2. Momentum of the market Stable to losing Slowly gaining Rapidly gaining
momentum momentum momentum
3. Need for a new firm in the Low Moderate High
market with your offerings
or geographic location
4. Extent to which business Low Medium High
and environmental trends
are moving in favor of the
target market
5. Recent or planned Large firms Rumors that large No larger firms
entrance of large firms entering the firms may be entered the
into the market market entering the market market or are
rumored to be
entering the
market

Part 2 Conclusion (expand fields and report findings, in discussion form, for each area)
A. Industry attractiveness
B. Target market attractiveness
C. Market timeliness
D. Industry/market feasibility (circle the correct response)
Not Feasible Unsure Feasible
E. Suggestions for improving industry/market feasibility.

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Part 3: Organizational Feasibility
Issues Addressed in This Part
A. Management prowess
B. Resource sufficiency
C. Social Responsibility

A. Management Prowess
 Use the following table to candidly and objectively rate the “prowess” of the founder
or group of founders who will be starting the proposed venture.

Management Prowess Assessment Tool

Low Potential Moderate Potential High Potential
1. Passion for the business Low Moderate High
idea
2. Relevant industry None Moderate Extensive
experience
3. Prior entrepreneurial None Moderate Extensive
experience
4. Depth of professional Weak Moderate Strong
and social networks
5. Creativity among Low Moderate High
management team
members
6. Experience and expertise None Moderate High
in cash flow
management
7. College graduate No college Some college Graduated or
education education but not are currently
currently in college in college

B. Resource Sufficiency
 The focus in this section is on nonfinancial resources. Use the following table to rate
your “resource sufficiency” in each category.
 The list of resources is not meant to be exhaustive. A list of the 6 to 12 most critical
nonfinancial resources for your proposed business is sufficient.

An explanation of the rating system used in the first portion of the table is as follows:
1 Available
2 Likely to be available: will probably be available and will be within my budget
3 Unlikely to be available: will probably be hard to find or gain access to, and
may exceed my budget
4 Unavailable
5 NA: not applicable for my business

Resource Sufficiency Assessment Tool

Ratings Resource Sufficiency

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 1 2 3 4 5 Office space
1 2 3 4 5 Lab space, manufacturing space, or space to launch a
service business
1 2 3 4 5 Contract manufacturers or outsource providers
1 2 3 4 5 Key management employees (now and in the future)
1 2 3 4 5 Key support personnel (now and in the future)
1 2 3 4 5 Key equipment needed to operate the business
(computers, machinery, delivery vehicles)
1 2 3 4 5 Ability to obtain intellectual property protection on key
aspects of the business
1 2 3 4 5 Support of local and state government if applicable for
business launch
1 2 3 4 5 Ability to form favorable business partnerships
Ratings: Strong, Neutral,
or Weak
Proximity to similar firms (for the purpose of knowledge
sharing)
Proximity to suppliers
Proximity to customers
Proximity to a major research university (if applicable)

C. Social Responsibility and Sustainability

 Comment on how your business model makes progress in terms of the three CSR
elements:
Social
Environmental
Economic

Part 3 Conclusion (expand fields and report findings, in discussion form, for each area)
A. Management prowess
B. Resource sufficiency
C. Social Responsibility
D. Organizational feasibility (circle the correct response)
Not Feasible Unsure Feasible
D. Suggestions for improving organizational feasibility

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Part 4: Financial Feasibility
Issues Addressed in This Part
A. Total startup cash needed
B. Financial performance of similar businesses (including 3 year cash flow forecast)
C. Overall financial attractiveness of the proposed venture

A. Total Start-Up Cash Needed

 The startup costs (which include capital investments and operating expenses) should
include all the costs necessary for the business to make its first sale. New firms
typically need money for a host of purposes, including the hiring of personnel, office
or manufacturing space, equipment, training, research and development, marketing,
and the initial product rollout.
 At the feasibility analysis stage, it is not necessary for the number to be exact.
However, the number should be fairly accurate to give an entrepreneur an idea of the
dollar amount that will be needed to launch the firm. After the approximate dollar
amount is known, the entrepreneur should determine specifically where the money
will come from to cover the startup costs.

 The total startup cash needed can be estimated using the following table.

Total Startup Cash Needed (to Make First Sale)

Capital Investments Amount

Property

Furniture and fixtures

Computer equipment

Other equipment

Vehicles

Operating Expenses Amount

Legal, accounting, and professional services

Advertising and promotions

Deposits for utilities

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Licenses and permits

Prepaid insurance

Lease payments

Salary and wages

Payroll taxes

Travel

Signs

Tools and supplies

Starting inventory

Cash (working capital)

Other expense 1

Other expense 2

Total Startup Cash Needed =

B. Comparison of the Financial Performance of Proposed Venture to Similar

Firms
 Use the following tables to compare the proposed new venture to similar firms in
regard to annual sales (Year 1 and Year 2) and profitability (Year 1 and Year 2).

Forecast of Annual Sales

Estimate of Proposed Venture’s Explanation of How the Estimate

Annual Sales—Year 1 Was Computed
Estimate of Year 1 Sales __________

Summary: How proposed annual sales, on

average, compares to similar firms (circle one)

Below Average Average Above Average

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Estimate of Year 2 Sales __________

Summary: How proposed annual sales, on

average, compares to similar firms (circle one)

Below Average Average Above Average

Net Income (Profit)

Estimate of Proposed Venture’s Explanation of How the Estimate

Net Income (Profit)—Year 1 was Computed
Estimate of Year 1 Net Income (Profit)__________

Summary: How proposed net income or profit, on

average, compares to similar firms (circle one)

Below Average Average Above Average

Estimate of Year 2 Net Income (Profit) __________

Summary: How proposed net income or profit, on

average, compares to similar firms (circle one)

Below Average Average Above Average

C. Cash Flow Forecast for 3 years

 Use the total start-up cash and annual sales data to develop a cash flow forecast for 3
years. (Insert the full cashflow excel sheets or tables at the end of the report).
 Determine the break-even point and overall financial potential of the venture.

Year 1 Year 2 Year 3

Investment
Sales volume
Sales Income

Cost of Goods Sold

Expenses

Net Cash Flow

Overall Financial Attractiveness of the Proposed Venture

 The following factors are important in regard to the overall financial attractiveness of
the proposed business.
 Assess the strength of each factor in the following table.

Overall Financial Attractiveness of Proposed Venture Assessment Tool

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 Low Potential Moderate Potential High Potential
1. Steady and rapid growth in Unlikely Moderately likely Highly likely
sales during the first one to
three years in a clearly
defined target market
2. High percentage of Low Moderate Strong
recurring income—meaning
that once you win a client,
the client will provide
recurring sources of
revenue
3. Ability to forecast income Weak Moderate Strong
and expenses with a
reasonable degree of
certainty
4. Likelihood that internally Unlikely Moderately likely Highly likely
generated funds will be
available within two years
to finance growth
5. Availability of exit Unlikely to be May be available Likely to be
opportunity for investor if unavailable available
applicable

Part 4 Conclusion (report your findings for each area)

A. Total startup cash needed
B. Financial performance
C. Financial feasibility (circle the correct response)
Not Feasible Unsure Feasible
D. Suggestions for improving financial feasibility

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Part 5: Overall Feasibility: Summary and Conclusion

 Complete the table based on the data you present above.

Overall Feasibility of the Suggestions for Improving

Business Idea Based on the Feasibility
Each Part
Product/Market Feasibility Not feasible
Unsure
Feasible
Industry/Market Feasibility Not feasible
Unsure
Feasible
Organizational Feasibility Not feasible
Unsure
Feasible
Financial Feasibility Not feasible
Unsure
Feasible
Overall Assessment Not feasible
Unsure
Feasible

Conclusion—briefly summarize your justification for your overall assessment.

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Appendix 1:
Final CANVAS Business Model

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Appendix 2:
3 Year Cash Flow Forecast (insert your 3 year cashflow forecast Excel or Tables)

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