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Description Of The Business |
- What is the business going to sell?
- To whom it will be sold?
- What product or service will be used for?
- Why will prospects in target market buy product?
- Anticipated price?
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The Product |
Development Status
- Ready for sale? Debugging a prototype? Paper dream?
Strengths and Weaknesses
- Identify weaknesses of product causing a disadvantage in the market place.
- How to compensate for weaknesses.
- How to overcome any technological obsolescence.
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FIRST CHECKPOINT
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Should venture idea be abandoned or altered?
- Are the type and level of critical resources available?
- Do the presently perceived possible rewards compare favorably with the risks?
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The Market: A Preliminary Evaluation |
Total Market Size and Trends
- Identify past, present, and best estimates for sales in terms of 'dollars' and 'units' for target market segment(s).
- If data is sketchy, contradictory, and hard to interpret, admit it!
- Identify assumptions being made about the marketplace.
Assessment of Competition
- Include competing ways potential customers can fulfill the specific needs being addressed by the business' product.
- Specifically identify direct competition for target market segments(s).
- Provide data about all reasonable competitors:
- Price
- Quality
- Innovations
- Market share
- Growth of market share
- Implicit marketing strategy (aggressive, etc.)
- Market position (leader, etc.)
- Who is profitable
- Trends in profitability
- Weaknesses/strengths
- How to leverage competitor weaknesses? Overcome strengths?
- Trends in industry profitability?
- Life cycle stage of industry?
- Resulting implications on marketing strategies?
- What marketing mix variables are critical for decisions to purchase? (product, price, promotion, place).
Market Share
- First estimate of venture's market share and target sales for the first, second, and third operating year.
- Are estimates realistic, but still challenging and worthy of anticipated resource allocation?
Market Tactics
- Outline product delivery system.
- How to sell?
- How to distribute?
- Service and warranty issues.
- Promotional mix.
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SECOND CHECKPOINT
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It should be clear that:
- The potential market is large.
- A small share of the market will produce significant sales.
- The proposed product can be priced to sell at a profit in the marketplace.
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Production And Operations |
- Can venture make product to specifications and deliver it on-time within competitive target cost levels?
- Does venture have sufficient knowledge about its suppliers and the local labor market to ensure that it will not face major operational problems?
- Will materials be accessible in sufficient quantity and quality?
- Is material acquisition probable within budgeted prices and time constraints for venture?
- Is special skills training necessary for successful operations?
- Will you have to rely on any unproven, custom-made production equipment?
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THIRD CHECKPOINT
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- Are the solutions to production and operation issues within grasp?
- Are there any serious doubts to the viability of a solution?
- Are no solutions obvious?
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Entrepreneurs |
- List know-how and skills needed for the new business.
- List skills available. Show evidence of demonstrated skills and availability and commitment to the project.
- Identify gaps and indicate how to fill.
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FOURTH CHECKPOINT
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- Is the venture being built upon strengths and experience?
- Is the critical expertise required by the venture now on-line?
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Financing Required |
- Indicate the magnitude of financing needed.
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FIFTH CHECKPOINT
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- Is the level of financing within the range acceptable by the various resource allocators?
- Are the financial requirements reasonable with respect to the venture's potential and risks?
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Major Risks And Problems |
- Identify the most important risks to the success of the venture.
- Evaluate the risks on both the probability of occurrence and its magnitude of negative results.
- Indicate a contingency solution for overcoming each major risk.
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FINAL CHECKPOINT
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- All reasonable risks should be apparent.
- All risks and problems should not be insurmountable.
- All risks should be reasonable relative to the potential opportunity and rewards.
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