Entrepreneurship Midterm CH. 3
Describe a feasibility analysis template and explain why it is important for entrepreneurs to use this template.
"First Screen" is a template for completing a feasibility analysis. It's called "First Screen" because it's a tool that can be used in the initial pass at determining the feasibility of a business idea. If a business idea cuts muster at this stage, the next step is to complete a business plan.
Describe a product/service feasibility analysis, explain its purpose, and discuss the two primary issues that a proposed business should consider in this area.
- Is an assessment of the overall appeal of the product or service being proposed. Before a prospective firm rushes a new product or service into development, it should be sure that the product or service is what prospective customers want. - Desirability and Demand
Explain what an organizational feasibility analysis is and its purpose and discuss the two primary issues to consider when completing this analysis.
- 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. - Management prowess and Resource Sufficiency
Describe what a financial feasibility analysis is, explain its importance, and discuss the most critical issues to consider in this area when completing this analysis.
- Is the final component of a comprehensive feasibility analysis. A preliminary financial assessment is sufficient. - Total Start-Up Cash Needed - Financial Performance of Similar Businesses - Overall Financial Attractiveness of the Proposed Venture
Explain what a feasibility analysis is and why it's important.
Feasibility analysis is the process of determining if a business idea is viable. Many entrepreneurs make the mistake of identifying a business idea and then jumping directly to developing a business model to describe and gain support for the idea. This sequence often omits or provides little time for the important step of testing the feasibility of a business idea.