Feasibility and Business Planning

Developing a Business Concept Business Concept: a clear and concise description of an opportunity Elements of Business Concept What is the Product/Service? Who is the Customer? What Is the Benefit Provided? How will the benefit will be delivered?

The Pet Rock Founder: Gary Dahl Made Dahl a Millionaire 1970’s Fad Rock carefully packaged Air holes so the rock may breath Straw for comfort Handle for easy transportation Cost: $3.95

The Pet Rock Training Manual included: How to raise & care for your pet rock How to teach your pet rock tricks: sit, stay, roll over, play dead, etc.

Activity Heart Attack Grill http://www.heartattackgrill.com/ Working with a partner, create a concept statement for a new restaurant

Activity Business Concept What product/service are you offering? Who is the customer? What is the benefit that is being provided? How will the benefit be delivered?

Testing the Concept in the Market Feasibility Analysis: test a business concept Does the business have potential? Demand for product/service Should I stay or should I go?

Testing the Concept in the Market Testing the Industry (group of businesses with a common interest) Trends Life Cycle Stage Health Of The Industry Status Of Technology Typical Profit Margins Major Players

Talking to Customers Target Customers: those most likely to buy your products or services Most important part of analysis What do customers want? Are customers interested in your product? How will you reach out to your customers?

Testing Product/Service Prototype: working model of a new product (actual product, blueprint of the business etc.) Product Development Tasks And Guidelines (concept, layout, etc) How will you protecting your Product Product/Service Differentiation

Evaluating The Founding Team Experience In The Industry Knowledge And Skills Of The Industry Gaps In Knowledge And Plans For Filling The Gaps

Studying the Competition Competitive Grid: tool for organizing information about the competition Five column grid including Competitor Customer Benefits Distribution Strength/Weaknesses Sample Competitive Graph Page 98

Looking at Start-up Resources Helps you determine the potential profitability of a business idea Business Model: describes how you intend to make money with your business concept Calculate money needed to Purchase/Lease Equipment Buy Starting Inventory Pay Employees Finish Product Development Carry Company Expenses Until Sales Allow You To Operate With A Positive Cash Flow

Analyzing the Value Chain Value Chain: distribution channel through which your product/service flows from the producer to the consumer. Includes manufacturer, distributors, retailers Each adds value to the final product Goal: deliver maximum value for least possible cost Example: internet created new ways to sell products/services

The Business Plan Business Plan: a document that describes your new business and a strategy to launch that business Roadmap for starting a business Sales tool to raise capital Research and plan, not react

Parts of a Business Plan Executive Summary Management Team Plan Company Description Product/Service Plan Vision & Mission Statement Industry Overview Market Analysis

The Business Plan Competitive analysis Marketing Plan Operation Plan Organizational Plan Financial Plan Growth Plan Contingency Plan Cover Page/Title Page/Table of Contents/Supporting Documents

Common Mistakes in Preparing Business Plans Projecting Exaggerated Growth Levels Trying To Be A Jack Of All Trades Claiming Performance That Exceeds Industry Averages Underestimating The Need For Capital

Sources of Business Plan Information Small Business Administration (SBA) Service Corp of Retired Executives (SCORE) Small Business Development Centers (SBDCs) Chamber of Commerce Trade Associations Link available at entrepreneurship.glencoe.com