Vergos Panos MScBA in Entrepreneurship Rotterdam School of Management

Vergos PanosMScBA in EntrepreneurshipRotterdam School of Management

Feasibility analysis of a startup

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6 Ways to Achieve Feasibility

1. Business Planning2. Personal traits of the Entrepreneur & the Team3. Networking4. Solid Marketing Strategy5. Pivoting6. Seed Capital

"The best way to have a good idea is to have a lot of ideas"Linus Pauling Chemist

1. Business Planning (A)

The core of the new venture's feasibility.

Simple Definition: Those efforts by startup entrepreneurs to gather and analyze information about a business opportunity, evaluate tasks, identify risks and strategy, project financial developments and present a concept, in a written plan.

A complete BP enhances:•product development•venture organizing activity•the likelihood of the new venture's survival

And it provides the framework within which subsequent action takes place.

"The seeds of every company’s demise are contained in its business plan" Fred Adler Entrepreneur

1. Business Planning (B)

BP facilitates:•Goal attainment•Decision-making more quickly Vs trial-and-error learning•Managing resources in a way that minimizes time-consuming bottlenecks•Turning abstract goals into concrete operational activities•Keeping on track and correcting rapidly deviations•Communicating the vision of the entrepreneur to others, enhancing the pace for action

2. Personal traits of the Entrepreneur & the Team

Some of them:

• Need for achievement• Risk-taking• Innovativeness & Creativity• Autonomy• Locus of Control• Self-efficacy & personal initiative

"Teams outperform individuals, especially when performance requires multiple skills, judgments, and experiences"

Jon R. Katzenbach

3. Networking

External ties help to:

• Discover and seize new opportunities• Access resources easier and cheaper• Gain legitimacy & improve performance• Raise financial support• Access high quality information

"Use a good accountant or book- keeper, and a good lawyer, and listen to their advice. Get help in those areas in which you aren't familiar"

Vaggelis

4. Solid Marketing Strategy

It can be achieved by:

• Analyzing the Market & the Competition • Choosing your target market • Determining the 4 Ps

• Product• Price• Place• Promotion

"If you don’t know what the customer benefit is, the whole thing’s a waste of time"

Branco Weiss Entrepreneur

5. Pivoting

Rapid shifting permits to:

• Observe if something isn't working (customer discovery)

• Orient yourself to the new facts• Decide what part needs to change• Act decisively and reconfigure

Operating in CHAOS + SPEED + PIVOTS= SUCCESS

"The hardest thing to see is what is in front of your eyes" Goethe

6. Seed Capital

Last but not least.

Raise as much capital as you can, in order to:• launch and run your business successfully• be able to meet your current and future liabilities

Tip to remember:Your financial plan is a only a collection of assumptions

and fractions of the funds required. Do not hesitate to ask for more.

"What kind of numbers do we like to see? The more mature a business is, the more we rely on numbers. For a newer business, the numbers matter less and the words matter more"

Robert Mahoney, Investment banker

Conclusion

Feasibility for startups is more a prediction, determined by several uncertain factors, rather than a solid proposition. It demands serious preparation before taking action, in an environment of extreme uncertainty. The viability of a new venture depends not only on the sufficient capital that has been raised, but mostly to these 5 other prerequisites that are the heart and the body of the new business.

"There is nothing in the world as powerful, as an idea whose time has come" Victor Hugo

"It’s a funny thing about life; if you refuse to accept anything but the best, you very often get it"

Somerset Maugham