Feasibility analysis is a process that determines the viability of a business idea. It assesses the market potential, financial sustainability, and management capabilities required. The document outlines the key components of a feasibility analysis, including product/service analysis, industry/market analysis, organizational analysis, and financial analysis. It provides details on how to evaluate the desirability and demand of a product or service idea, assess the attractiveness of the target industry and market, examine the management skills and resources required, and analyze the startup costs and financial projections. Conducting a thorough feasibility analysis early in the process can help screen ideas before dedicating significant resources.
The Importance of Getting Financing or Funding, Sources of Personal Financing, Examples of Bootstrapping Methods, Alternatives for Raising Money for a New Venture, Preparing to Raise Debt or Equity Financing, Sources of Equity Funding
Feasibility Analysis
Feasibility analysis is the process of determining whether a business idea is viable.
It is the preliminary evaluation of a business idea, conducted for the purpose of determining whether the idea is worth pursuing.
Feasibility analysis takes the guesswork (to a certain degree) out of a business launch, and provides an entrepreneur with a more secure notion that a business idea is feasible or viable.
Comprehensive Feasibility Analysis, Product/Service Desirability
Obtaining a 360 degree view by conducting a thorough due diligence to ensure ...Kenny Ong
Marcus Evans Structuring and Financing M&A Conference
Singapore,12-13 July 2010
Obtaining a 360 degree view by conducting a thorough due diligence to ensure a successful acquisition
• Analysing the pre-offer preparation
• Amplifying internal fitment
• Focusing on areas for due diligence
• Balancing valuation with fitment
• Examining the key facets of negotiation
The Importance of Getting Financing or Funding, Sources of Personal Financing, Examples of Bootstrapping Methods, Alternatives for Raising Money for a New Venture, Preparing to Raise Debt or Equity Financing, Sources of Equity Funding
Feasibility Analysis
Feasibility analysis is the process of determining whether a business idea is viable.
It is the preliminary evaluation of a business idea, conducted for the purpose of determining whether the idea is worth pursuing.
Feasibility analysis takes the guesswork (to a certain degree) out of a business launch, and provides an entrepreneur with a more secure notion that a business idea is feasible or viable.
Comprehensive Feasibility Analysis, Product/Service Desirability
Obtaining a 360 degree view by conducting a thorough due diligence to ensure ...Kenny Ong
Marcus Evans Structuring and Financing M&A Conference
Singapore,12-13 July 2010
Obtaining a 360 degree view by conducting a thorough due diligence to ensure a successful acquisition
• Analysing the pre-offer preparation
• Amplifying internal fitment
• Focusing on areas for due diligence
• Balancing valuation with fitment
• Examining the key facets of negotiation
What Is a Business Plan? What's right time to develop the Business Plan?. Reasons of Developing a Business Plan. Guidelines for Writing a Business Plan. How long and detailed should it be?. Types of Business Plans. Guidelines for Writing a Business Plan. Outline of Business Plan
Startup Feasibility Analysis is about checking the different aspects of a startup whether or not the idea will make into a viable business.
It is important to conduct feasibility analysis before investing any money in the idea. The four aspects of feasibility that are important are; Product Feasibility, Industry/Target Market Feasibility, Organizational Feasibility and Financial Feasibility.
Each aspect has been explained in detail with relevant examples.
In this paper, I explore how the accelerator model could generate adequate returns by providing a hedge against risks present in the niche private equity model known as the Search Fund.
Watch full webinar here: http://www.firmex.com/Due-Diligence-Best-Practices-and-Pitfalls-sign-up/
LOIs and NDAs signed. Now art meets science with the legal, financial and strategic review of the business. How do you test the value proposition and identify potential risks? Select the best tools to streamline the process? And prepare for regulatory and legal compliance issues arising from legislation like FCPA? Learn what it takes to avoid pitfalls that plague even the most experienced due diligence experts.
Recievable Management in FMCG Sector:A sSudy of Selected Compniesprofessionalpanorama
The current study has tried to examine the sources used by the companies to finance their working capital requirements and to analyse and evaluate the receivables management. The present work therefore is a modest attempt in this direction by undertaking a study of Receivables Management. The study has also examined the liquidity position of companies. The study analysed the liquidity position of a limited sample consisting of five companies i.e. Nestle, HUL, Britannia, ITC and Dabur. The study of liquidity position is based only on one tool i.e. Ratio Analysis. Further the study is based on last 10 years Annual Reports of selected companies taken into consideration. As only FMCG sector was studied so the findings could only be generalised to this sector’s firms. Study of receivables management is very crucial for all firms. Unless the working capital is planned, managed and monitored effectively, company cannot earn profit and increase its turnover and it also helps in removing bottlenecks. Many companies go under because of cash flow issues, rather than declining profitability. Hence, traditional prudence always suggests that a firm should have sufficient cash to cover its immediate liabilities. However, there is a growing breed of FMCG companies that claim otherwise. Unlike most other industries, the turnover of a FMCG company is not limited by its ability to produce, but its ability to sell. They can generate cash so quickly they actually have a negative working capital. This happens because customers pay upfront and so rapidly, the business has no problem raising cash (like Nestle, Britannia). In these companies products are delivered and sold to the customer before the company even pays for them. A negative working capital is a sign of managerial efficiency in a business with low inventory and accounts receivables (which means it operates on an almost strictly cash basis). In other situation, it is a sign a company may be facing bankruptcy or serious financial trouble.
What Is a Business Plan? What's right time to develop the Business Plan?. Reasons of Developing a Business Plan. Guidelines for Writing a Business Plan. How long and detailed should it be?. Types of Business Plans. Guidelines for Writing a Business Plan. Outline of Business Plan
Startup Feasibility Analysis is about checking the different aspects of a startup whether or not the idea will make into a viable business.
It is important to conduct feasibility analysis before investing any money in the idea. The four aspects of feasibility that are important are; Product Feasibility, Industry/Target Market Feasibility, Organizational Feasibility and Financial Feasibility.
Each aspect has been explained in detail with relevant examples.
In this paper, I explore how the accelerator model could generate adequate returns by providing a hedge against risks present in the niche private equity model known as the Search Fund.
Watch full webinar here: http://www.firmex.com/Due-Diligence-Best-Practices-and-Pitfalls-sign-up/
LOIs and NDAs signed. Now art meets science with the legal, financial and strategic review of the business. How do you test the value proposition and identify potential risks? Select the best tools to streamline the process? And prepare for regulatory and legal compliance issues arising from legislation like FCPA? Learn what it takes to avoid pitfalls that plague even the most experienced due diligence experts.
Recievable Management in FMCG Sector:A sSudy of Selected Compniesprofessionalpanorama
The current study has tried to examine the sources used by the companies to finance their working capital requirements and to analyse and evaluate the receivables management. The present work therefore is a modest attempt in this direction by undertaking a study of Receivables Management. The study has also examined the liquidity position of companies. The study analysed the liquidity position of a limited sample consisting of five companies i.e. Nestle, HUL, Britannia, ITC and Dabur. The study of liquidity position is based only on one tool i.e. Ratio Analysis. Further the study is based on last 10 years Annual Reports of selected companies taken into consideration. As only FMCG sector was studied so the findings could only be generalised to this sector’s firms. Study of receivables management is very crucial for all firms. Unless the working capital is planned, managed and monitored effectively, company cannot earn profit and increase its turnover and it also helps in removing bottlenecks. Many companies go under because of cash flow issues, rather than declining profitability. Hence, traditional prudence always suggests that a firm should have sufficient cash to cover its immediate liabilities. However, there is a growing breed of FMCG companies that claim otherwise. Unlike most other industries, the turnover of a FMCG company is not limited by its ability to produce, but its ability to sell. They can generate cash so quickly they actually have a negative working capital. This happens because customers pay upfront and so rapidly, the business has no problem raising cash (like Nestle, Britannia). In these companies products are delivered and sold to the customer before the company even pays for them. A negative working capital is a sign of managerial efficiency in a business with low inventory and accounts receivables (which means it operates on an almost strictly cash basis). In other situation, it is a sign a company may be facing bankruptcy or serious financial trouble.
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ИА «Контекст Медиа» представляет новый еженедельный анализ упоминаемости в СМИ ТОП-15 банков Украины. В период с 22 по 28 февраля в перечень финучреждений, показавших максимальный уровень представленности в масс-медиа, попали Сбербанк, Альфа-Банк, ПриватБанк, ВТБ Банк, Ощадбанк, Укрэксимбанк, Райффайзен Банк Аваль, Укргазбанк, Укрсоцбанк, УкрСиббанк, Проминвестбанк, Platinum Bank, Банк Хрещатик, ОТП Банк и ПУМБ.
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A simple slides to share about entrepreneurship. Target audiences are secondary school to pre-u students. It talks about feasibility analysis to generate and filter business ideas.
Project Feasibility Report | Write a Feasibility Report with Venture Careventurecare86
A Project feasibility study is an analysis of how successfully a project can be completed.Learn how to write a feasibility report and feasibility criteria.
Reducing risk: Conducting a feasibility study helps entrepreneurs reduce the risk of failure by identifying potential problems and risks before launching the business. This analysis can help entrepreneurs to develop contingency plans, minimize potential losses, and increase the chances of success.
Week 1 Lecture The Nature of Business ResearchBusiness researc.docxkdennis3
Week 1 Lecture
The Nature of Business Research
Business research covers a wide range of phenomena. For managers, the purpose of research is to provide knowledge regarding the organization, the market, the economy, or another area of uncertainty. A financial manager may ask, “Will the environment for long-term financing be better two years from now?†A personnel manager may ask, “What kind of training is necessary for production employees?†or “What is the reason for the company’s high employee turnover?†A marketing manager may ask, “How can I monitor my retail sales and retail trade activities?†Each of these questions requires information about how the environment, employees, customers, or the economy will respond to executives’ decisions. Research is one of the principal tools for answering these practical questions.
Business research is the application of the scientific method in searching for the truth about business phenomena. These activities include defining business opportunities and problems, generating and evaluating alternative courses of action, and monitoring employee and organizational performance. Business research is more than conducting surveys.6 This process includes idea and theory development, problem definition, searching for and collecting information, analyzing data, and communicating the findings and their implications.
Applied business research is conducted to address a specific business decision for a specific firm or organization. The opening vignette describes a situation in which ESPN used applied research to decide how to best create knowledge of its sports fans and their preferences. Basic business research (sometimes referred to as pure research) is conducted without a specific decision in mind, and it usually does not address the needs of a specific organization.
All research, whether basic or applied, involves the scientific method. The scientific method is the way researchers go about using knowledge and evidence to reach objective conclusions about the real world. The scientific method is the same in social sciences, such as business, as in physical sciences, such as physics. In this case, it is the way we come to understand business phenomena.
A firm can be production-oriented. A production-oriented firm prioritizes the efficiency and effectiveness of production processes in making decisions. Here, research providing input from workers, engineers, finance, and accounting becomes important as the firm seeks to drive costs down. Production-oriented firms are usually very large firms manufacturing products in very large quantities. The third orientation is marketing- oriented, which focuses more on how the firm provides value to customers than on the physical product or production process. With a marketing-oriented organization the majority of research focuses on the customer. Research addressing consumer desires, beliefs, and attitudes becomes essential.
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2. What Is Feasibility Analysis?
3-2
• Feasibility analysis is the process of
determining whether a business idea is viable.
3. 3-3
A feasibility analysis helps you …………
•To assess the merit of your business idea,
•Determine whether there is a market for your idea,
•Whether the idea is financially viable,
•and ultimately, whether or not it is worth investing
your time and money into the venture,
•Overall demand for new products, services, or
ideas
•Characteristics of likely customers (such as
demographics and buying behavior)
• Characteristics of likely competitors
Benefits of Feasibility Analysis?
4. When To Conduct a Feasibility Analysis
Timing of Feasibility Analysis
The proper time to conduct a feasibility analysis is early in
thinking through the prospects for a new business.
The thought is to screen ideas before a lot of resources are
spent on them
3-4
5. 3-5
It is estimated that only one in fifty business ideas are
actually commercially viable. Therefore a business
feasibility study is an effective way to safeguard
against wastage of further investment
The research and information uncovered in the
feasibility study will support the business planning
stage and reduce the research time. Hence the cost of
the business plan will also be reduced
Conti….
6. Components of a Feasibility Analysis
3-6
Product/Service Feasibility
Organizational Feasibility
Industry/Target Market
Feasibility
Financial Feasibility
10. 1.1- Product/Service Desirability
15-10
• Does it make sense? Is it something consumers will get excited
about?
• Does it take advantage of an environmental trend, solve a
problem, or take advantage of a gap in the marketplace?
• Is this a good time to introduce the product or service to the
market?
• Are there any fatal flaws in the product or service’s basic design
or concept?
First, ask the following questions to determine the basic
appeal of the product or service.
11. 3-11
Second, Develop/Administer a Concept Test
A concept statement should be developed.
A concept statement is a one page description of a business,
that is distributed to people who are asked to provide
feedback on the potential of the business idea.
The feedback will hopefully provide the entrepreneur
A sense of the viability or the product or service idea.
Suggestions for how the idea can be strengthened or “twisted” before
proceeding further.
13. 1.2- Product/Service Demand
Product/Service Demand
Through primary and secondary research
Step 1: Administer a Buying Intentions Survey, focus group
etc
Step 2: Conduct library, Internet research, used local data
etc
3-13
14.
15.
16.
17.
18.
19. 3-19
Gumshoe Research
Explanation
• A gumshoe is a detective or an investigator that
scrounges around for information or clues
wherever they can be found.
• Be a gumshoe. Ask people what they think about
your product or service idea. If your idea is to sell
educational toys, spend a week volunteering at a
day care center and watch how children interact
with toys.
20.
21. 2.0 Industry/Target Market Feasibility
Analysis
3-21
Industry/Target Market
Feasibility Analysis
Purpose
• Is an assessment of the overall
appeal of the industry and the
target market for the proposed
business.
• An industry is a group of firms
producing a similar product or
service.
• A firm’s target market is the
limited portion of the industry it
plans to go after.
22. Industry/Target Market Feasibility Analysis
3-22
Components of industry/target market
feasibility analysis
Industry Attractiveness
Target Market
Attractiveness
24. 2.2. Target Market Attractiveness
Target Market Attractiveness
The challenge in identifying an attractive target market is to
find a market that’s large enough for the proposed business
but is yet small enough to avoid attracting larger
competitors.
Assessing the attractiveness of a target market is tougher
than an entire industry.
3-24
25. 3.0. Organizational Feasibility Analysis
3-25
Organizational Feasibility
Analysis
Purpose
• Is conducted to determine
whether a proposed business has
sufficient management expertise,
organizational competence, and
resources to successfully launch
a business.
• Focuses on non-financial resources.
27. 3.1. Management Prowess
Management Prowess
A firm should candidly evaluate the prowess, or ability, of
its management team to satisfy itself that management has
the requisite passion and expertise to launch the venture.
Two of the most important factors in this area are:
The passion that the solo entrepreneur or the founding team has for
the business idea.
The extent to which sole entrepreneur or the founding team
understands the markets in which the firm will participate.
3-27
28. 3.2. Resource Sufficiency
Resource Sufficiency
An assessment of whether an entrepreneur has sufficient
non financial resources to launch the proposed business.
3-28
29. Resource Sufficiency
3-29
Examples of nonfinancial resources that may be critical
to the successful launch of a new business
• Availability of factory/ lab space for business.
• Local and state government support of the business.
• Quality of the labor pool available.
• Closeness to key suppliers and customers.
• Willingness of high quality employees to join the firm.
•Proximity to similar firms for the purpose of sharing knowledge.
• Possibility of obtaining intellectual property protection in key areas.
30. 4.0. Financial Feasibility Analysis
3-30
Financial Feasibility
Analysis
Purpose
• Is the final component of a
comprehensive feasibility analysis.
• A preliminary financial assessment
is sufficient.
31. Financial Feasibility Analysis
3-31
Components of financial
feasibility analysis
Total Start-Up Cash
Needed
Financial Performance of
Similar Businesses
Overall Financial
Attractiveness of the
Proposed Venture
32. 4.1. Total Start-Up Cash Needed
Total Start-Up Cash Needed
The first issues refers to the the total cash needed to prepare
the business to make its first sale.
An actual budget should be prepared that lists all the
anticipated capital purchases and operating expenses needed
to generate the first $1 in revenues.
The point of this exercise is to determine if the proposed
venture is realistic given the total start-up cash needed.
3-32
33. 4.2. Financial Performance of Similar Businesses
Financial Performance of Similar Businesses
Estimate the proposed start-up’s financial performance by
comparing it to similar, already established businesses.
There are several ways to doing this, all of which involve a
little ethical detective work.
First, there are many reports available, some for free and some that
require a fee, offering detailed industry trend analysis and reports on
thousands of individual firms.
Second, simple observational research may be needed. For example,
the owners of New Venture Fitness Drinks could estimate their sales
by tracking the number of people who patronize similar restaurants
and estimating the average amount each customer spends.
3-33
34. 4.3. Overall Financial Attractiveness of the
Proposed Venture
Overall Financial Attractiveness of the Proposed
Investment
A number of other financial factors are associated with
promising business startups.
In the feasibility analysis stage, the extent to which a
business opportunity is positive relative to each factor is
based on an estimate rather than actual performance.
The table on the next slide lists the factors that pertain to the
overall attractiveness of the financial feasibility of the
business idea.
3-34
35. Overall Financial Attractiveness of the
Proposed Venture
3-35
Financial Factors Associated With Promising Business
Opportunities
• Steady and rapid growth in sales during the first 5 to 7 years in a clearly
defined market niche.
• High percentage of recurring revenue—meaning that once a firm wins a
client, the client will provide recurring sources of revenue.
• Ability to forecast income and expenses with a reasonable degree of
certainty.
• Internally generated funds to finance and sustain growth.
• Availability of an exit opportunity for investors to convert equity to cash.
37. 3-37
Sole Proprietorship
The vast majority of small businesses start out as sole
proprietorships. These firms are owned by one person,
usually the individual who has day-to-day responsibility
for running the business. Sole proprietorships own all the
assets of the business and the profits generated by it.
They also assume complete responsibility for any of its
liabilities or debts. In the eyes of the law and the public,
you are one in the same with the business.
38. 3-38
Advantages of a Sole Proprietorship
1.Easiest and least expensive form of ownership to organize.
2. Sole proprietors are in complete control, and within the
parameters of the law, may make decisions as they see fit.
3.Profits from the business flow-through directly to the owner’s
personal tax return.
4.The business is easy to dissolve, if desired.
Disadvantages of a Sole Proprietorship
1.Unlimited liability. Owners who organize their business as a
sole proprietorship are personally responsible for the obligations
of the business, including actions of any employee representing
the business.
2.Limited life. In most cases, if a business owner dies, the
business dies as well.
3.It may be difficult for an individual to raise capital. It's
common for funding to be in the form of personal savings or
personal loans
39. 3-39
Partnership
A Partnership consists of two or more
individuals in business together.
Partnerships may be as small as mom and
pop type operations, or as large as some of
the big legal or accounting firms that may
have dozens of partners
40. 3-40
Advantages
1.Synergy. There is clear potential for the enhancement of value
resulting from two or more individuals combining strengths.
2.Partnerships are relatively easy to form, however, considerable
thought should be put into developing a partnership agreement at the
point of formation.
3.Partnerships may be subject to fewer regulations than corporations.
4.There is stronger potential of access to greater amounts of capital.
5.No corporate income taxes.
Disadvantages
1.Unlimited liability. General partners are individually responsible for
the obligations of the business, creating personal risk.
2.Limited life. A partnership may end upon the withdrawal or death
of a partner.
3.There is a real possibility of disputes or conflicts between partners
which could lead to dissolving the partnership. This scenario enforces
the need of a partnership agreement.
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Corporation
Corporations are probably the dominant form of
business organization in the United States. Although
fewer in number, corporations account for the lion's
share of aggregate business receipts in the U.S.
economy. A corporation is a legal entity doing
business, and is distinct from the individuals within
the entity. Public corporations are owned by
shareholders who elect a board of directors to oversee
primary responsibilities.
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Advantages
Unlimited commercial life. The corporation is an entity
of its own and does not dissolve when ownership
changes.
Greater flexibility in raising capital through the sale of
stock.
Ease of transferring ownership by selling stock.
Limited liability. This limited liability is probably the
biggest advantage to organizing as a corporation.
Individual owners in corporations have limits on their
personal liability. Even if a corporation is sued for
billions of dollars, individual shareholder's liability is
generally limited to the value of their own stock in the
corporation..
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Disadvantages
1. Regulatory restrictions. Corporations are typically more closely
monitored by governmental agencies, including federal, state,
and local. Complying with regulations can be costly.
2. Higher organizational and operational costs. Corporations have
to file articles of incorporation with the appropriate state
authorities. These legal and clerical expenses, along with other
recurring operational expenses, can contribute to budgetary
challenges.
3. Double taxation. The possibility of double taxation arises when
companies declare and pay taxes on the net income of the
corporation, which they pay through their corporate income tax
returns. If the corporation also pays out dividends to individual
shareholders, those shareholders must declare that dividend
income as personal income and pay taxes at the individual
income tax rates. Thus, the possibility of double taxation.