Feasibility and Business Planning. Developing a Business Concept Business Concept: a clear and concise description of an opportunity Elements of Business.

Feasibility and Business Feasibility and Business PlanningPlanning

Developing a Business ConceptDeveloping a Business Concept

Business Concept: a clear and Business Concept: a clear and concise description of an opportunityconcise description of an opportunity

Elements of Business ConceptElements of Business Concept1.1. What is the Product/Service?What is the Product/Service?

2.2. Who is the Customer?Who is the Customer?

3.3. What Is the Benefit Provided?What Is the Benefit Provided?

4.4. How will the benefit will be delivered?How will the benefit will be delivered?

The Pet RockThe Pet Rock

Founder: Gary DahlFounder: Gary Dahl

Made Dahl a MillionaireMade Dahl a Millionaire

1970’s Fad1970’s Fad

Rock carefully packagedRock carefully packaged1.1. Air holes so the rock may Air holes so the rock may

breathbreath

2.2. Straw for comfortStraw for comfort

3.3. Handle for easy Handle for easy transportationtransportation

Cost: $3.95Cost: $3.95

The Pet RockThe Pet Rock

Training Manual Training Manual included:included:

1.1. How to raise & care for How to raise & care for your pet rockyour pet rock

2.2. How to teach your pet How to teach your pet rock tricks: sit, stay, roll rock tricks: sit, stay, roll over, play dead, etc.over, play dead, etc.

ActivityActivity

Heart Attack GrillHeart Attack Grill http://www.heartattackgrill.com/

Working with a partner, create a Working with a partner, create a concept statement for a new concept statement for a new restaurantrestaurant

ActivityActivity

Business ConceptBusiness Concept1.1. What product/service are you What product/service are you

offering?offering?2.2. Who is the customer?Who is the customer?3.3. What is the benefit that is being What is the benefit that is being

provided?provided?4.4. How will the benefit be delivered?How will the benefit be delivered?

Testing the Concept in the MarketTesting the Concept in the Market

Feasibility Analysis: test a business Feasibility Analysis: test a business conceptconcept

1.1. Does the business have potential?Does the business have potential?

2.2. Demand for product/serviceDemand for product/service

3.3. Should I stay or should I go?Should I stay or should I go?

Testing the Concept in the MarketTesting the Concept in the Market

Testing the Industry (group of Testing the Industry (group of businesses with a common interest)businesses with a common interest)

1.1. TrendsTrends

2.2. Life Cycle StageLife Cycle Stage

3.3. Health Of The IndustryHealth Of The Industry

4.4. Status Of TechnologyStatus Of Technology

5.5. Typical Profit MarginsTypical Profit Margins

6.6. Major PlayersMajor Players

Talking to CustomersTalking to Customers

Target Customers: those most likely Target Customers: those most likely to buy your products or servicesto buy your products or services

1.1. Most important part of analysisMost important part of analysis

2.2. What do customers want?What do customers want?

3.3. Are customers interested in your Are customers interested in your product?product?

4.4. How will you reach out to your How will you reach out to your customers?customers?

Testing Product/ServiceTesting Product/Service

Prototype: working model of a new Prototype: working model of a new product (actual product, blueprint of product (actual product, blueprint of the business etc.)the business etc.)

1.1. Product Development Tasks And Product Development Tasks And Guidelines (concept, layout, etc)Guidelines (concept, layout, etc)

2.2. How will you protecting your Product How will you protecting your Product

3.3. Product/Service DifferentiationProduct/Service Differentiation

Evaluating The Founding TeamEvaluating The Founding Team

Experience In The IndustryExperience In The Industry

Knowledge And Skills Of The Knowledge And Skills Of The IndustryIndustry

Gaps In Knowledge And Plans Gaps In Knowledge And Plans For Filling The GapsFor Filling The Gaps

Studying the CompetitionStudying the CompetitionCompetitive Grid: tool for organizing Competitive Grid: tool for organizing information about the competitioninformation about the competition

Five column grid includingFive column grid including1.1. CompetitorCompetitor

2.2. CustomerCustomer

3.3. BenefitsBenefits

4.4. DistributionDistribution

5.5. Strength/WeaknessesStrength/WeaknessesSample Competitive Graph Page 98Sample Competitive Graph Page 98

Looking at Start-up ResourcesLooking at Start-up ResourcesHelps you determine the potential profitability Helps you determine the potential profitability of a business ideaof a business idea

Business Model: describes how you intend to Business Model: describes how you intend to make money with your business conceptmake money with your business concept

Calculate money needed toCalculate money needed to1.1. Purchase/Lease EquipmentPurchase/Lease Equipment

2.2. Buy Starting InventoryBuy Starting Inventory

3.3. Pay EmployeesPay Employees

4.4. Finish Product DevelopmentFinish Product Development

5.5. Carry Company Expenses Until Sales Allow You To Carry Company Expenses Until Sales Allow You To Operate With A Positive Cash Flow Operate With A Positive Cash Flow

Analyzing the Value ChainAnalyzing the Value Chain

Value Chain: distribution channel through which Value Chain: distribution channel through which your product/service flows from the producer to your product/service flows from the producer to the consumer.the consumer.

Includes manufacturer, distributors, retailersIncludes manufacturer, distributors, retailers

Each adds value to the final productEach adds value to the final product

Goal: deliver maximum value for least possible Goal: deliver maximum value for least possible costcost

Example: internet created new ways to sell Example: internet created new ways to sell products/servicesproducts/services

The Business PlanThe Business Plan

Business Plan: a document that describes Business Plan: a document that describes your new business and a strategy to your new business and a strategy to launch that businesslaunch that business1.1. Roadmap for starting a businessRoadmap for starting a business

2.2. Sales tool to raise capitalSales tool to raise capital

3.3. Research and plan, not reactResearch and plan, not react

Parts of a Business PlanParts of a Business Plan

Executive SummaryExecutive Summary

Management Team PlanManagement Team Plan

Company DescriptionCompany Description

Product/Service PlanProduct/Service Plan

Vision & Mission StatementVision & Mission Statement

Industry OverviewIndustry Overview

Market AnalysisMarket Analysis

The Business PlanThe Business Plan

Competitive analysisCompetitive analysisMarketing PlanMarketing PlanOperation PlanOperation PlanOrganizational PlanOrganizational PlanFinancial PlanFinancial PlanGrowth PlanGrowth PlanContingency PlanContingency PlanCover Page/Title Page/Table of Cover Page/Title Page/Table of Contents/Supporting DocumentsContents/Supporting Documents

Common Mistakes in Preparing Common Mistakes in Preparing Business PlansBusiness Plans

Projecting Exaggerated Growth Projecting Exaggerated Growth LevelsLevels

Trying To Be A Jack Of All TradesTrying To Be A Jack Of All Trades

Claiming Performance That Claiming Performance That Exceeds Industry AveragesExceeds Industry Averages

Underestimating The Need For Underestimating The Need For CapitalCapital

Sources of Business Plan Sources of Business Plan InformationInformation

Small Business Administration (SBA)Small Business Administration (SBA)

Service Corp of Retired Executives Service Corp of Retired Executives (SCORE)(SCORE)

Small Business Development Centers Small Business Development Centers (SBDCs)(SBDCs)

Chamber of CommerceChamber of Commerce

Trade AssociationsTrade AssociationsLink available at entrepreneurship.glencoe.comLink available at entrepreneurship.glencoe.com