1. Define Business Plan and Business Feasibility Study.

Business Plan - A written document describing the nature of the business, the sales and marketing strategy, and the financial background, and containing a projected profit and loss statement. Business Feasibility Study - An analysis and evaluation of a proposed project to determine if it (1) is technically feasible, (2) is feasible within the estimated cost, and (3) will be profitable. Feasibility studies are almost always conducted where large sums are at stake. Also called feasibility analysis. See also cost benefit analysis. - A detailed analysis of a proposal with respect to its anticipated cost, potential problems, and possible outcomes in order to determine if the proposal should be implemented. A feasibility study for a small business might include: an assessment of the market; an estimate of fixed costs, variable costs, revenues, and breakeven; identification of potential problems; and an evaluation of the firm's management quality. 2. Identify the importance and purpose of Business Plan. *The Importance of a Business Plan* A business plan is a blueprint detailing how the gears of your business get in mesh to generate profits. A sound business plan contains the information needed for effective operation and management of the company. It explains what is possible for the business, how it will be done and why it will be successful. -Plotting a Course A business plan is a focusing device. It helps the entrepreneur think long-term. When writing a business plan, it is important to project into the future and not get bogged down in the steps involved in starting the company. Keeping the stone rolling is just as, or even more, important. Having a road map keeps the entrepreneur focused and motivated. -Feasibility Study A business plan should delineate plans for marketing, operations and finance. Delineating these three pillars of a business venture helps demonstrate the viability of the entrepreneurs ideas. It clarifies how a business can be profitable, highlights financial requirements and warns about barriers to success. -Decision-Making Crash Course Preparing a business plan requires research and critical thinking about complex business issues. Gathering information boosts knowledge of the industry and the competitive landscape. Possible problems can be anticipated and prepared for. Hence, going through the business plan process hones the decision-making skills of the entrepreneur. -Action Plan A business plan explains how the business will operate in the marketplace. It describes what is being sold, who the prospective customers are, where they can be found and what is needed to succeed. The business plan guides the entrepreneur through the start-up phase of the business and keeps her focused. -Selling Tool The business plan functions as a prospectus for potential investors. It anticipates capital requirements and predicts cash flow to reassure lenders or backers. It also helps put together the best team by explaining the business in a presentable format. A good business plan can also play a part in attracting reliable suppliers. *Main Purposes of a Business Plan* If you are preparing to start your own business, you should first write a business plan. A good business plan acts as a dynamic blueprint for running and expanding your business, according to Inc.com. To write a business plan you can use, however, it is necessary for you to understand the main purposes of one. -Maintaining Focus A business plan contains all of your product information, manpower and financial estimates and your plans for the future. As you look to grow your business, you should refer to your business plan, according to the Small Business Administration. When you decide to make changes to your business, those changes should be reflected in your business plan. When you make updates to your business plan, you get to see how your proposed changes will affect your entire business. Your business plan reminds you of why you started your business in the first place, what your original goals were and how business changes will affect your original vision. -Securing Financing As you start your business, and even as your business moves along, you will constantly need to concern yourself with financing your business. Financing concerns begin with the start-up costs and then continue with business expansion and new product development. When you look for outside financing, one of the first things the investor will want to see is your business plan, according to Inc.com. Private investors, banks or any other lending institution will want to see how you plan on running your business, what your expense and revenue projections are and whether or not your plans for the future are attainable with the business you have created. All of this can be answered by a wellwritten and thorough business plan.

-Fueling Ambitions Starting your own business can seem like a daunting task if you have never done it before. When you break down your business into a business plan, it can motivate you because it presents the business in an organized fashion, according to the University of Colorado. When you spend the time to outline your business in detail, you begin to understand what it will take to get your dream off the ground. Following a business plan can help you to map out the growth of your company and give you confidence when you need it. -Enlightening Executives As your business grows, you will need to consider adding executives to your team that can help move your company in the right direction. A business plan will help executive talent see your business vision and determine whether or not your company is a worthwhile investment of time and resources. *Overall Purpose of a Business Plan* A business plan is the road map you create for your business. It identifies goals and quantifies, insofar as is possible, the strategies you plan to use to achieve those goals. It tells the world how you approach business and how your business approaches the world. Business plans are also a tool for fundraising and one of the ways you can show investors, bankers and other funding sources why your business is a money machine. -A Concise Introduction A business plan is a chance to tell who you are. It gives readers an overview of your company, an analysis of market conditions and a description of how the company plans to use its profits to profit its investors and lenders. It's the synopsis of how you plan to reach your company's goals and your projections of its profitability. -Highlights Strengths and Weaknesses The business plan provides a chance to analyze your company's strengths and weaknesses, the opportunities it can embrace and the threats it faces. The SWOT analysis names each of your competitors and discusses their relative strengths and weaknesses. The analysis can also highlight how your company fits into your industry. -Structure and Management The business plan gives investors insight into the company's management. The principle members of management are profiled to show what each brings to the table. This part of the plan can show you areas where your organization is weak or could use new or more talent. The plan also describes the legal structure -- whether your company is a sole proprietorship, a partnership or some form of corporation. -Identifies Goals A business plan includes a description of the business that describes its long- and short-term goals. This description allows you to see how and why your company meets a need in the industry. For example, at the beginning of the 20th century, there were thousands of buggy-whip makers. Those who failed to realize that they were in the larger business of "vehicle acceleration" were gone by the beginning of the 21st century. The few who remain downsized and survive in a market niche. -Inspires Investor Confidence While some investors might like a gamble, most dont, and all have a vast distaste for losing money. A business plan includes financial statements and projections certified by independent accountants that can to quell investor concerns. This information can also provide you with a financial view of strengths and weaknesses in your business that you can use to stave off disaster or capitalize on potential. *Importance & Purpose of a Business Plan* Business plans are documents used for planning out specific details about your business. They can range in size from a simple few sentences to more than 100 pages with formal sections, a table of contents and a title page. According to Entrepreneur Magazine, typical business plans average 15 to 20 pages. Comprehensive business plans have three sections--business concept, marketplace and financial--and these are broken down into seven components that include the overview or summary of the plan, a description of the business, market strategies, competition analysis, design and development, operations and management, and financial information. Even small one-page business plans have importance and purpose for the success of the business however. -Clarify Direction The primary purpose of a business plan is to define what the business is or what it intends to be over time. Clarifying the purpose and direction of your business allows you to understand what needs to be done for forward movement. Clarifying can consist of a simple description of your business and its products or services, or it can specify the exact product lines and services you'll offer, as well as a detailed description of your ideal customer. -Future Vision Businesses evolve and adapt over time, and factoring future growth and direction into the business plan can be an effective way to plan for changes in the market, growing or slowing trends, and new innovations or directions to take as the company grows. Although clarifying direction in the business plan lets you know where you're starting, future vision allows you to have goals to reach for. -Attract Financing The Small Business Administration states, "The development of a comprehensive business plan shows whether or not a business has the potential to make a profit." By putting statistics, facts, figures and detailed plans in writing, a new business has a better chance of attracting investors to provide the capital needed for getting started.

-Attract Team Members Business plans can be designed as a sale tool to attract partners, secure supplier accounts and attract executive level employees into the new venture. Business plans can be shared with the executive candidates or desired partners to help convince them of the potential for the business, and persuade them to join the team. -Manage Company A business plan conveys the organizational structure of your business, including titles of directors or officers and their individual duties. It also acts as a management tool that can be referred to regularly to ensure the business is on course with meeting goals, sales targets or operational milestones. 3. Describe the different parts of Feasibility Study. There are basically six parts to any effective Feasibility Study: 1. The Project Scope which is used to define the business problem and/or opportunity to be addressed. The old adage, "The problem well stated is half solved," is very apropos. The scope should be definitive and to the point; rambling narrative serves no purpose and can actually confuse project participants. It is also necessary to define the parts of the business affected either directly or indirectly, including project participants and end-user areas affected by the project. The project sponsor should be identified, particularly if he/she is footing the bill. I have seen too many projects in the corporate world started without a well defined project scope. Consequently, projects have wandered in and out of their boundaries causing them to produce either far too much or far too little than what is truly needed. 2. The Current Analysis is used to define and understand the current method of implementation, such as a system, a product, etc. From this analysis, it is not uncommon to discover there is actually nothing wrong with the current system or product other than some misunderstandings regarding it or perhaps it needs some simple modifications as opposed to a major overhaul. Also, the strengths and weaknesses of the current approach are identified (pros and cons). In addition, there may very well be elements of the current system or product that may be used in its successor thus saving time and money later on. Without such analysis, this may never be discovered. Analysts are cautioned to avoid the temptation to stop and correct any problems encountered in the current system at this time. Simply document your findings instead, otherwise you will spend more time unnecessarily in this stage (aka "Analysis Paralysis"). 3. Requirements - how requirements are defined depends on the object of the project's attention. For example, how requirements are specified for a product are substantially different than requirements for an edifice, a bridge, or an information system. Each exhibits totally different properties and, as such, are defined differently. How you define requirements for software is also substantially different than how you define them for systems. 4. The Approach represents the recommended solution or course of action to satisfy the requirements. Here, various alternatives are considered along with an explanation as to why the preferred solution was selected. In terms of design related projects, it is here where whole rough designs (e.g., "renderings") are developed in order to determine viability. It is also at this point where the use of existing structures and commercial alternatives are considered (e.g., "build versus buy" decisions). The overriding considerations though are: -Does the recommended approach satisfy the requirements? -Is it also a practical and viable solution? (Will it "Play in Poughkeepsie?") A thorough analysis here is needed in order to perform the next step... 5. Evaluation - examines the cost effectiveness of the approach selected. This begins with an analysis of the estimated total cost of the project. In addition to the recommended solution, other alternatives are estimated in order to offer an economic comparison. For development projects, an estimate of labour and out-of-pocket expenses is assembled along with a project schedule showing the project path and start-and-end dates. After the total cost of the project has been calculated, a cost and evaluation summary is prepared which includes such things as a cost/benefit analysis, return on investment, etc. 6. Review - all of the preceding elements are then assembled into a Feasibility Study and a formal review is conducted with all parties involved. The review serves two purposes: to substantiate the thoroughness and accuracy of the Feasibility Study, and to make a project decision; either approve it, reject it, or ask that it be revised before making a final decision. If approved, it is very important that all parties sign the document which expresses their acceptance and commitment to it; it may be a seemingly small gesture, but signatures carry a lot of weight later on as the project progresses. If the Feasibility Study is rejected, the reasons for its rejection should be explained and attached to the document. Conclusion It should be remembered that a Feasibility Study is more of a way of thinking as opposed to a bureaucratic process. For example, what I have just described is essentially the same process we all follow when purchasing an car or a home. As the scope of the project grows, it becomes more important to document the Feasibility Study particularly if large amounts of money are involved and/or the criticality of delivery. Not only should the Feasibility Study contain sufficient detail to carry on to the next succeeding phase in the project, but it should also be used for comparative analysis when preparing the final Project Audit which analyses what was delivered versus what was proposed in the Feasibility Study. Feasibility Studies represent a common sense approach to planning. Frankly, it is just plain good business to conduct them. However, I have read where some people in the IT field, such as the "Agile" methodology proponents, consider Feasibility Studies to be a colossal waste of time. If this is true, I've got a good used car I want to sell them. Parts of the feasibility study. Things that are generally feasible are definitely a main part of any government study.