ENTREP HANDOUT 6

• Feasibility analysis


  The process of determining whether a business idea is doable
• Feasibility analysis is the preliminary evaluation to see whether a business idea is worth pursuing
• Feasibility analysis exists to investigate and critique the quality and distinction of a proposed business
• Feasibility analysis

  • It starts when an entrepreneur has an idea of what product/s or service/s they will offer and assess whether it is viable to be patronized or enough to be marketed
  • It is usually an anchoring process to know whether the business itself can withstand the course to be viable to meet the needs
  • A business must meet the four (4) components of a feasibility analysis before making it a reality
  • It needs a continuous re-evaluation before proceeding to the business plan
• Four (4) components of a feasibility analysis

  • Product/service feasibility analysis
  • Industry/target market feasibility analysis
  • Organizational feasibility analysis
  • Financial feasibility analysis
• Product/service feasibility analysis


  • Evaluates the product or service of a new venture being proposed, as this is what matters the most when starting a business
  • It has two (2) components: product/service desirability and demand
• Industry/target market feasibility analysis


  • Assesses the overall possible engagement of the industry and target market
  • Focuses on determining the industry and target market attractiveness
• Characteristics of an attractive industry

  • Young rather than old - An up-to-date industry is advantageous. People nowadays are into what is new to their eyes and ears.
  • Early rather than late in their life cycle - Developing ventures are more appealing than those already in their diminishing stage and yet to be developed.
  • Fragmented rather than concentrated – Fragmented industry is the kind of industry that stands alone, and no enterprise can influence its evolution and direction, while the concentrated industry is the one that is being dominated by some businesses
• Target market attractiveness


  • Focuses on knowing the feasible market
  • Finding a suitable and enough large market to propose the business but small to avoid large competitors as they are only starting
• Organizational feasibility analysis


  Determines the sufficiency of its management expertise, organizational competencies, and resources
• Things to discuss in organizational feasibility analysis

  • Management prowess
  • Resource sufficiency
• Management prowess


  Assesses the ability of the management team, whether it is a sole entrepreneur or a large one
• Resource sufficiency


  Determines if a venture being proposed has enough resources to be pushed through, including specialized skills and capability to obtain intellectual property protection
• Financial feasibility analysis


  • Attests if a business being proposed has total start-up cash or the money needed to operate
  • Includes the foreseen capital purchase needed and operating expenses to keep the business going
• Tools in conducting a feasibility analysis

  • Doing a concept test
  • Talking face-to-face with potential customers - - Aside from being familiar with the abilities of a venture to stand through the description and details an entrepreneur can produce, it is important to know if the product, service, or business will be an appealing subject to the consumers.
  • Using online tools - Since not everyone can do a face-to-face talk, some online tools can be used for the feasibility analysis to gather potential consumer's side regarding the proposed business.
• Concept test


  Exemplifies the product or service idea and its description, along with a concept statement introduced to a panel of industry experts and potential customers to get enough feedback
• Online tools for feasibility analysis

  • Foundersuite
  • Quirky
  • Unassumer
  • LaunchRock
  • Google Consumer Surveys
  • Survey.io
• Outline for a formal proposal of a feasibility analysis

  • Executive summary
  • Technological considerations
  • Existing marketplace
  • Marketing strategy
  • Findings and recommendations
• Factors to consider in pushing through a business

  • A great idea
  • Funding and budget
  • Analysis of competitors
  • Effective business plan
  • Legal documentation
  • Positive attitude
  • Knowing when you need help
• A great idea is important to make something that will stand out
• Funding and budget are necessary to support the production and manufacturing of whatever product or service a future business will cater to
• Analyzing competitors will help an entrepreneur to be ready to plan and effectively prepare the business for possible setbacks
• A business plan will direct the company to the path of their objectives and help the entrepreneur with the proceeding ways along with its development
• Legal documentation will make a business reputable and protect the company's name and authority towards their products or services
• Entrepreneurs should have a positive attitude to continue pushing through the business as there are risks and drawbacks they cannot avoid
• Entrepreneurs should learn how to seek help when they must and see themselves with people who will give the right advice and do things when building and developing one