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Feasibility Analysis Checklist



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?

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.

FIRST
CHECKPOINT


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?

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.

SECOND
CHECKPOINT


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.

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?

THIRD
CHECKPOINT


  • 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?

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.

FOURTH
CHECKPOINT


  • Is the venture being built upon strengths and experience?
  • Is the critical expertise required by the venture now on-line?

Financing Required
  • Indicate the magnitude of financing needed.

FIFTH
CHECKPOINT


  • 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?

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.

FINAL
CHECKPOINT


  • 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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