Entrepreneurship Management Feasibility Planning Feasibility Planning Entrepreneurs have

Entrepreneurship Management Feasibility Planning

Feasibility Planning � Entrepreneurs have to plan � Entrepreneurs may establish a plan but may not be possible always to strictly adhere the plan � For planning is essential, a reasonable planning is done to know the changing paradigms of comprehensive business plan � This reasonable planning is called Feasibility Planning

Four – Stage growth model of entrepreneurial planning Pre start-up stage resources Start-up stage for Entrepreneurs plan the ventures & do the preliminary work of obtaining Entrepreneurs position their venture in a market & make necessary adjustments survival Early-growth stage Rapid development & growth when the venture undergo major changes in market, financial, resource allocation Later-growth stage Evolution of venture into large company where professional management is more important than entrepreneurial views

Pre start-up stage The following activities are followed in this stage: 1. Defining business concept- what is the purpose of the venture, what does entrepreneur wants to accomplish in business 2. Product-market study- product research, feasibility of product, market research, buyers, competitors 3. Financial planning- capital required, income generation, money for operational activities, investments vs. expenses 4. Pre start-up implementation- resource allocation, inventory management, planning, facilities, licenses, permits

Start-up stage It is the initial period of business. It has no definite time frame but have two benchmarked considerations: a) b) Meeting operating objectives Position the venture for long-term growth Start-up operating activities: 1. 2. 3. 4. Sales Revenue Growth Position

Early growth stage This is a period of intense monitoring. Growth can occur at different rates and for long time too. It can range from slow growth to explosive growth depending upon the sales and based on quantum change in the consumer demand. Growth stages: 1. 2. 3. Very slow Comfort zone Very rapid growth

Later growth stage � The growth is much slower. � The venture find itself in competition with others in the market. � Companies � Family often go for stock offerings in public. fortunes turns into corporate equity positions and private investors convert holdings into publicly traded securities.

Fundamentals of feasibility plan Every business is unique and feasibility plan is an outline of potential issues to address a set of guidelines to help entrepreneurs take better decisions. 1. Developing a good plan - honest, well-supported information's, no emotional phrases, prepared in quality manner 2. Protecting the business – strong nondisclosure statement, patented, copyrighted 3. Making the plan readable – short, strong, loaded up with facts & figures, future projections, cleared statements

Elements of feasibility plan Any feasibility plan includes eight common elements to complete it: 1. 2. 3. 4. 5. 6. 7. 8. Executive summary Business concept Product or service Market research or analysis Market plan Operation Entrepreneurial team Financial documentation

Executive summary The five elements for executive summary: 1. 2. 3. 4. 5. Venture defined – purpose, for whom, by whom, what, why, partnership, corporation, sole proprietorship Product/Service – new product/service, design, research, distinctive competency Market characteristics – market size, geographic characteristics, market demographics, customer age, group, regional trends Entrepreneurial team – founder of the venture, key personnel essential for success, individual’s qualifications, skills, abilities Financial summary – start up estimations, costs, cashflow requirements, profits or losses

Business concept � Purpose of the venture and the major objectives of it’s founders � Evolutionary steps that led to the business formation � Defining nature of market demand � Firm’s technological profile � Description of machines, manufacturing units � Description of whole sale networks � Description of license, foreign collaboration (if any)

Product/Service � Distinctive � Materials � Cost, characteristics of the product/service used for manufacturing methods of development � Copyrights/Patents � Approval from the concerned govt. authority e. g. in case of food (approval from FCI) � Staging of product/Service – how it is to be introduced in market, the step by step process

Market research or analysis Based on the fact that market exists for proposed venture. Activities of market research/analysis: 1. Potential customers – demographic features, buying habits of customers 2. Markets – market trends, forecasting future market potential 3. Competitors – analyze competitors product/service, future competitors, industry struchere 4. Assumption of new venture - market niche, pricing system, method of distribution, sales forecast

Market plan Elements of market plan: 1. 2. 3. 4. 5. 6. Product/Service – quality, reliability Pricing system – pricing methods, discounts, quantity, bulk pricing Promotional mix – advertising, displays, events, demonstrations Distribution channels – retailing, wholesale, merchandising, telemarketing Services/Warranties – after sales services, repair, guarantees Marketing leadership – responsible roles, strategically competent ideas

Operation The elements of operation plan: 1. 2. 3. 4. 5. Physical facilities – purchase, lease, renovation, parking, transport Inventory – opening, purchasing system, inventory management, supplies Human resources – operating personnel, skills developments, supervision Operations - R&D, manufacturing process, service structure, quality control, safety, maintenance Legal issues – insurance, legal protection, patents, trademarks, security

Entrepreneurial team Effective in terms of risk takers: � Skilled � Good and qualified for the job track record of success � Faster decision making abilities � Influencer � Leadership � Team attributes member

Financial documentation Financial projections showing monetary involvement, growth, assumptions, profit forecast: � Income statement, profit/loss statement � Cash-flow, � Budget Fund-flow outline � Start-up costs � Assumption � Estimated of financial growth balance sheet for at least five year

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