Appendix 3.1: Initial Screen for New Business Ideascollege.cengage.com/coursemate/management/longenecker_978128… · Appendix 3.1: Initial Screen for New Business Ideas Score each
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Chapter 3 Starting a Small Business 1
Appendix 3.1: Initial Screen for New Business Ideas
Score each item in the sections below (as a −1, 0, or +1) by circling the response that best corresponds to that item. Then add up each
of those five values and enter the combined score for each part on the last line.
1. Amount of capital needed to launch the business, including costs of development and promotion
High Moderate Low
2. Profitability of similar ventures already in business Low Moderate High
3. Projected profits for the new business Low Moderate High
4. Potential to start the business incrementally or to test it inexpensively before full launch
Low Moderate High
5. Level of liability and other risks associated with the new business
High Moderate Low
Combined Score for Part 5 (−5 to +5) __________
Summary of Overall PotentialFor each part of the screen, enter the combined score on the appropriate line below, and circle the response that best represents your assessment of
potential. You can offer suggestions for improving the idea’s potential in the space provided. Next, sum all five combined scores, and enter that num-
ber as your overall assessment of the idea’s potential on the line provided. Space is allowed for a brief written summary of your overall assessment.
Decision CriterionCombined
Score (–5 to +5)Overall Summary of Potential
from Each Part (Circle One)Suggestions for Improving
Potential
Combined Score for Part 1:Strength of the Business Idea __________ Low Moderate High
Combined Score for Part 2:Target Market and Customers __________ Low Moderate High
Combined Score for Part 3:Industry and Competitive Advantage __________ Low Moderate High
Combined Score for Part 4:Capability of Founder(s) __________ Low Moderate High
Combined Score for Part 5:Capital Requirements and Venture Performance __________ Low Moderate High
Overall Assessment of Potential (−25 to +25) __________
Provide a brief written explanation for your overall assessment:
Sources: Adapted from Bruce R. Barringer, Preparing Effective Business Plans: An Entrepreneurial Approach (Upper Saddle River, NJ: Pearson Prentice Hall, 2009), pp. 44–47, and Jeffry A. Timmons and Stephen Spinelli, New Venture Creation: Entrepreneurship for the 21st Century (NY: McGraw-Hill Irwin, 2007), pp. 128–129.