BUS3ENT: Business Feasibility Plan- Business Report Writing Assignment

Internal Code: MAS1811

Business Report Writing Assignment:

Task: 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 Questions to Answer 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? a. In House b. Subcontract c. License d. Joint Venture or Partnership e. Combination 3.What are the options for Sales and Distribution? a. In House b. Whole Sale c. Distributors or Sales Representatives d. License e. Joint Venture or Partnership f. 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? a. Industry Standards or Regulations b. Personal Certifications c. Intellectual Property (Patents, trademarks, copyrights) d. 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? a. From the Market Research, what is the projected sales volume in "units sold?" and in "dollars sold"? b. From the Market Research, what is the selling price per unit? c. What is the total expected revenue? 2. What are the financial dynamics and opportunities? a. 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? a. One Time Assets and Startup Expenses - Plant & Equipment - Leasehold Improvements - Initial Inventories - Research & Development - Legal - Experts b. Operating expenses prior to break even 4. What are the financial risks? a. Payback (Investment required divided by net margin per unit - Date when units calculated above are sold & collected.) b. Risk vs. Reward (Personal feelings of the risks and rewards) c. Opportunity Costs (Can you get a better return somewhere else?) d. Personal Financial Risk (What will you have to give up. Sign over mortgage etc.) 5. What are the possible sources of financing? a. Chances of getting the money? b. What will you have to give up? 6. General Financial Numbers that would indicate attractiveness of Venture a. Gross Margin 20 - 30% plus b. Net Profit Margin - 10 to 15%. Plus c. Return on Investment - 15% plus d. Payback - 3 years or less. e. Break even - 2 years or less 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?