any high performance
entrepreneurship are invariably two things
1. A great idea that leads to a family of ideas.
2. Solid implementation.
purpose of idea screening is to more
thoroughly evaluate the idea before the goahead is given to formulate work to satisfy
others’ needs/wants that are unfulfilled by
the market due to transaction costs.
are 2 parts to level 1. The first is to
conduct a feasibility analysis.
The analysis consists of 4 steps that are as
involves examining trends beyond the
short run control of the venture that could
significantly alter industry conditions and
affect the venture’s sustainability. Four
major forces are examined.
Political / regulatory
involves assessing whether the industry
is attractive to enter. It involves examining
five “forces” as follows:
Threat of substitutes
ii. Bargaining power of buyers
iii. Bargaining power of suppliers
iv. Rivalry among existing competitors
Threat of new entrants
conducted after the firm has been
operating for an extended period of time.
It involves thought what competencies the
venture could have. Four key questions must
1. Is the competence valuable?
2. Is the competence rare?
3. Is the competence inimitable?
4. Is the competence exploitable?
involves analyzing the attractiveness of
the market. It includes answering 4
What is the current size of the market, and
how large is it expected to be?
What are the current and projected growth
In which stage of the development cycle is
What is the average industry profitability?
second part to level 1 is to conduct a
This analysis consists of six steps.
involves looking at financial statements
and operations of the key players in the
What are the returns of these firms?
What are their turnover ratios, working
capital, and so on?
Could these firms be operating more
What is the level of competence of these
involves analyzing the relative share of
the key industry players and making
judgments about how proposed venture
would fare within the industry.
involves projecting the expected
margins that can be expected from the
Information gathered from the market
profile analysis (industry financial ratios) and
SIC codes may also be a valuable source of
involves using information gathered
from margin analysis to determine projected
break – even volume and break-even sales
Is there sufficient volume to sustain the
involves forecasting projected income
and assets required to generate that income.
involves projecting the return on
investment (ROI) from undertaking the
What is the opportunity cost of undertaking
using the information gathered from
the feasibility and financial analyses to
project the viability of the proposed venture.
If the answer to any one of the 15 NVT
questions is no, do not go on.
If the answers to all questions are yes,
consult with trusted expert and
after consultation wit these individuals,
the idea is still favorable, move onto the
planning financing phase.
If, after consultation, the idea seems less
favorable than anticipated, disseminate this
feedback/information and redo the NVT
•Market Profile Analysis
•Analysis of similar firms in
•Projected Market Share
•Break Even Analysis
•Pro Forma Analyses
Consultation with Trusted