Assessing Business Ideas
Overview Before starting a business, it is important to have a business plan Business Plan A document that describes the objectives of a business and summarizes the strategies and resources needed to achieve the objectives Also known as a venture plan
Criteria A business plan must consider the following: Feasibility Marketability Profitability
Feasibility Will the idea work? Must consider: Financing Location of business Licences and permits Suppliers Staff
Financing Must consider the financial needs of the business Usually accomplished by completing a budget Outline: The amount needed The source(s) of the financing Term, interest rate, amount, etc.
Location Helpful to explain why you chose the location you did Include details such as: Address Rent Taxes Utilities
Licences and Permits Different types of businesses require different permits e.g. if you’re selling something, you require a Vendor’s Permit Should include a description of where, when and how you plan to obtain your permits
Suppliers Must know your needs in advance Should list: Each item The name of the supplier The price of each item and The terms of the purchase
Staff It is helpful to describe your staffing needs Must list: Title of positions to be filled Job descriptions How you plan to recruit for the roles
Marketability Must ensure there is a market for your product or service Must assess: The target market Competition Price of the product or service Identify the characteristics that make your product or service unique
Profitability Must be able to identify all costs associated with the venture Ensure that revenue is greater than costs Helpful to produce an Income Statement to show that the business is planning to generate a profit