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