Full Feasibility Analysis

From Preparing Effective Business Plans by Bruce R. Barringer

Note: All fields can be expanded to provide additional space to respond to the questions. A
copy of this template, along with each of the assessment tools, is also available in
PDF format at the authors Web site at www.prenhall.com/entrepreneurship.

Introduction
A.
Name of the proposed business
Mid-Night Club Inc.
B.
Name of the founder (or founders)
Pichayatida Srisakulpinyo
C.
One paragraph summary of the business
This new Mid-Night Club will sell powerful soda, delicious tastes with alcoholfree for just kids that under 18 years old. The drink will design to be like cocktail,
contain with several color, same size as a real alcohol bottle, and good quality of
drink/smell that decide by Master Chef who came from popular clubs.
Part 1: Product/Service Feasibility
Issues Addressed in This Part
A.
Product/service desirability
B.
Product/service demand
Assessment Tools
Concept Statement Test

Write a concept statement for your product/service idea. Show the concept statement
to 5 to 10 people. Select people who will give you informed and candid feedback.
Attached a blank sheet to the concept statement, and ask the people who read the
statement to (1) tell you three things they like about your product/service idea, (2)
provide three suggestions for making it better, (3) tell you whether they think the
product or service idea is feasible (or will be successful), and (4) share any additional
comments or suggestions.
Summarize the information you obtain from the concept statement into the following
three categories:
* Strengths of the product or service ideathings people who evaluated your
product or service concept said they liked about the idea
*

Suggestions for strengthening the ideasuggestions made by people for

strengthening or improving the idea

Overall feasibility of the product or service conceptreport the number of

people who thing the idea is feasible, the number of people who think it isnt
feasible, and any additional comments that were made
Other comments and suggestions

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Buying Intentions Survey

Distribute the concept statement to 15 to 30 prospective customers (do not include
any of the people who completed the concept statement test) with the following
buying intentions survey attached. Ask each participant to read the concept statement
and complete the buying intentions survey. Record the number of people who
participated in the survey and the results of the survey here.
Along with the raw data recorded here, report the percentage of the total number of
people you surveyed that said they would probably buy or definitely would buy your
product or service if offered. This percentage is the most important figure in gauging
potential customer interest.

One caveat is that people who say that they intend to purchase a product do
not always follow through, so the numbers resulting from this activity are almost
always optimistic. Still, the numbers provide you with a preliminary indication of
how your most likely customers will respond to your potential product or service
offering.

How likely would you be to buy the product or service described above?
__4__ Definitely would buy
__5__ Probably would buy
__4__ Might or might not buy
__1__ Probably would not buy
__2__ Definitely would not buy
Additional questions may be added to the buying intentions survey.
Conclusion (expand fields and report findings, in discussion form, for each area)
A.
Product/service desirability
According to the result, customers seem to use my service. In addition, it seems to
make sense and reasonable to begin the business. This survey also illustrates that
Mid-Night club able to full fill the gap in the market place because more than half
of the customers would buy this business. Furthermore, Mid-Night club is perfect
time to open in the market because nowadays teenager start to grow up quickly
that access to their thinking and physical attitude. So, this will suit their life style
and give them a good advantage to visit our club. However, Mid-Night club also
have a flaws that provide a complicate information which might make customer
confuse when they read this paper.
B.
Product/service demand
There are 13 customers who would use and 3 of them would not use this service.
Therefore, I believe that this business will satisfy and feasible because more than
double prefers to support this business.
C.
Product/service feasibility (circle the correct response)
Not Feasible
Unsure
Feasible
D.
Suggestions for improving product/service feasibility.
To improving this service, I need to explain the information more clearly and use
correct context.

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Part 2: Industry/Market Feasibility

Issues Addressed in This Part
A.
Industry attractiveness
B.
Target market attractiveness
C.
Timeliness of entry into the target market
Assessment Tools
Industry Attractiveness
To the extent possible, assess the industry at the five-digit NAICS code level your
potential business will be entering. Use a broader industry category (less NCICS
digits) if appropriate (http://www.census.gov/epcd/www/naicstab.htm).
Assess the attractiveness of the industry the potential business plans to enter on each
of the following dimensions.
Industry Attractiveness Assessment Tool
(used to assess the broad industry, rather than the specific target market, you plan
to enter)
Low Potential Moderate Potential High Potential
1. Number of competitors
Many
Few
None
2. Age of industry
Old
Middle aged
Young
3. Growth rate of industry
Little or no
Moderate growth
Strong growth
growth
4. Average net income for
Low
Medium
High
firms in the industry
5. Degree of industry
Concentrated Neither
Fragmented
concentration
concentrated nor
fragmented
6.
7.

Stage of industry life

cycle

Importance of industrys
products and/or services
to customers
8. Extent to which business
and environmental
trends are moving in
favor of the industry
9. Number of exciting new
product and services
emerging from the
industry
10. Long-term prospects

Maturity
phase or
decline phase
Ambivalent

Growth phase

Emergence
phase

Would like to
have

Must have

Low

Medium

High

Low

Medium

High

Weak

Neutral

Strong

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Target Market Attractiveness

Identify the portion or specific market within your broader industry that you plan to
target.
Assess the attractiveness of the target market on each of the following dimensions.
Target Market Attractiveness Assessment Tool
(used to assess the specific target market, rather than the broader industry, you plan
to enter)
Low Potential Moderate Potential High Potential
1. Number of competitors
Many
Few
None
in target market
2. Growth rate of firms in
Little to no
Slow growth
Rapid growth
the target market
growth
3. Average net income for
Low
Medium
High
firms in the target
market
4.
5.
6.

7.

8.

Methods for generating

revenue in the industry
Ability to create barriers
to entry for potential
competitors
Degree to which
customers feel satisfied by
the current offerings in the
target market
Potential to employ low
cost guerrilla and/or buzz
marketing techniques to
promote the firms product
or services
Excitement surrounding
new product/service
offerings in the target
market

Low Potential
Unclear

Moderate Potential
Somewhat clear

High Potential
Clear

Unable to
create

May or may not be

able to create

Can create

Satisfied

Neither satisfied or
dissatisfied

Unsatisfied

Low

Moderate

High

Low

Medium

High

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Market Timeliness
Determine the extent to which the window of opportunity for the proposed business
is open or closed based on the following criteria.
Determine the timeliness of entering a specific target market based on other criteria.
Market Timeliness Assessment Tool
Low Potential
1. Buying mood of
Customers are
customers
not in a buying
mood
2. Momentum of the market Stable to losing
momentum
3. Need for a new firm in the Low
market with your offerings
or geographic location
4. Extent to which business
Low
and environmental trends
are moving in favor of the
target market
5. Recent or planned
Large firms
entrance of large firms
entering the
into the market
market

Moderate Potential
Customers are in a
moderate buying
mood
Slowly gaining
momentum
Moderate

High Potential
Customers are
in an aggressive
buying mood
Rapidly gaining
momentum
High

Medium

High

Rumors that large

firms may be
entering the market

No larger firms
entered the
market or are
rumored to be
entering the
market
Conclusion (expand fields and report findings, in discussion form, for each area)
A.
Industry attractiveness
According to the result from the chart above, this kind of service have just few
competitors that located at NYC and it seem to build up the trend of this service
quit hard because people might not know about this new service before so we need
to promote hardly and widely to the customer market target. In addition, Customer
that use this service need to aggressive buying mood.
B.
Target market attractiveness
It shows that the attractiveness from customers target still be a young business
which must have the good service to customers for make our service become
impress for customers and we will have a regular customers.
C.
Market timeliness
This kind of business must provide a good quality service to customer for buying
customer attractive and we will able to attend or planned entrance of large firms
into the market. We also place our business in a right geographic location for the
customer to entre.
D.
Industry/market feasibility (circle the correct response)
Not Feasible
Unsure
Feasible
E.
Suggestions for improving industry/market feasibility.

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Put more effort into the business for make sure that the outcome and feedback
will be good quality.
Part 3: Organizational Feasibility
Issues Addressed in This Part
A.
Management prowess
B.
Resource sufficiency
Assessment Tools
Management Prowess
Use the following table to candidly and objectively rate the prowess of the founder
or group of founders who will be starting the proposed venture.
Management Prowess Assessment Tool
Low Potential
1. Passion for the business Low
idea
2. Relevant industry
None
experience
3. Prior entrepreneurial
None
experience
4. Depth of professional
Weak
and social networks
5. Creativity among
Low
management team
members
6. Experience and expertise None
in cash flow
management
7. College graduate
No college
education

Moderate Potential
Moderate

High Potential
High

Moderate

Extensive

Moderate

Extensive

Moderate

Strong

Moderate

High

Moderate

High

Some college
education but not
currently in college

Graduated or
are currently
in college

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Resource Sufficiency
The focus in this section is on nonfinancial resources. Use the following table to rate
your resource sufficiency in each category.
The list of resources is not meant to be exhaustive. A list of the 6 to 12 most critical
nonfinancial resources for your proposed business is sufficient.
An explanation of the rating system used in the first portion of the table is as follows:
1 Available
2 Likely to be available: will probably be available and will be within my budget
3 Unlikely to be available: will probably be hard to find or gain access to, and
may exceed my budget
4 Unavailable
5 NA: not applicable for my business
Resource Sufficiency Assessment Tool
Ratings
Resource Sufficiency
1 2 3 4 5
Office space
1 2 3 4 5
Lab space, manufacturing space, or space to launch a
service business
1 2 3 4 5
Contract manufacturers or outsource providers
1 2 3 4 5
Key management employees (now and in the future)
1 2 3 4 5
Key support personnel (now and in the future)
1 2 3 4 5
Key equipment needed to operate the business
(computers, machinery, delivery vehicles)
1 2 3 4 5
Ability to obtain intellectual property protection on key
aspects of the business
1 2 3 4 5
Support of local and state government if applicable for
business launch
1 2 3 4 5
Ability to form favorable business partnerships
Ratings: Strong, Neutral,
or Weak
Neutral
Proximity to similar firms (for the purpose of knowledge
sharing)
Strong
Proximity to suppliers
Strong
Proximity to customers
Weak
Proximity to a major research university (if applicable)

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Conclusion (expand fields and report findings, in discussion form, for each area)
A.
Management prowess
This business idea is very young, so I have intention and passion to my business.
Even though I dont have experience about it, but I surely that my passion will
push me to produce/show the successful of my business service.
B.
Resource sufficiency
According to the assessment tool chart, my business might not have office space,
but surely that we will have a comfortable space to launch a service business. Our
service business definitely supports personnel keys and heir many employees for a
good quality service throughout customers. Furthermore, Mid-Night also support
by state government and likely to have ability to form a business partnership.
C.
Organizational feasibility (circle the correct response)
Not Feasible
Unsure
Feasible
D.
Suggestions for improving organizational feasibility
I just begin this business service, so many factor still not perfect and doesnt have
Enough experience yet. Therefore, the thing that I should improve is my
experience and ability to obtain service customer with a perfect quality.
Part 4: Financial Feasibility
Issues Addressed in This Part
A.
Total startup cash needed
B.
Financial performance of similar businesses
C.
Overall financial attractiveness of the proposed venture
Assessment Tools
Total Start-Up Cash Needed

The startup costs (which include capital investments and operating expenses) should
include all the costs necessary for the business to make its first sale. New firms
typically need money for a host of purposes, including the hiring of personnel, office
or manufacturing space, equipment, training, research and development, marketing,
and the initial product rollout.
At the feasibility analysis stage, it is not necessary for the number to be exact.
However, the number should be fairly accurate to give an entrepreneur an idea of the
dollar amount that will be needed to launch the firm. After the approximate dollar
amount is known, the entrepreneur should determine specifically where the money
will come from to cover the startup costs.
The total startup cash needed can be estimate using the following table.

Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

Total Startup Cash Needed (to Make First Sale)

Capital Investments

Property
Furniture and fixtures
Computer equipment
Operating Expenses
Other equipment
Legal, accounting, and professional services
Vehicles
Advertising and promotions

Amount

2m
800k
50k
Amount
100k
100k
500k
80k

Deposits for utilities

60k

Licenses and permits

150k

Prepaid insurance

100k

Lease payments

6m

Salary and wages

1m

Payroll taxes

1.4m

Travel

5k

Signs

5k

Tools and supplies

500k

Starting inventory

1m

Cash (working capital)

1m

Other expense 1

500k

Other expense 2

500k
--

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Total Startup Cash Needed =

15.4m

Comparison of the Financial Performance of Proposed Venture to Similar Firms

Use the following tables to compare the proposed new venture to similar firms in
regard to annual sales (Year 1 and Year 2) and profitability (Year 1 and Year 2).
Comparison of the Financial Performance of Proposed Venture to Similar Firms
Assessment Tool
Annual Sales
Estimate of Proposed Ventures
Annual SalesYear 1
Estimate of Year 1 Sales __8m__
Summary: How proposed annual sales, on
average, compares to similar firms (circle one)
Below Average

Average

Above Average

Explanation of How the Estimate

Was Computed
Sell service and drinks for 123(small
cup) to 263(large cup) Baht
123*50 = 6,150 Baht
+ 263*60 = 15,780 Baht
6,150 + 15,780 = 21,930 / day
21,930 / day *365 = 8,004,450

Estimate of Year 2 Sales __16m__

Summary: How proposed annual sales, on
average, compares to similar firms (circle one)
Below Average

Average

8,004,450 / year * 2 = 16,008,900

Bath

Above Average

Net Income
Estimate of Proposed Ventures
Net IncomeYear 1

Explanation of How the Estimate

was Computed

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Estimate of Year 1 Net Income __5m__

Summary: How proposed net income, on
average, compares to similar firms (circle one)
Below Average
Average
Above Average
Estimate of Year 2 Net Income __10m__
Summary: How proposed net income, on
average, compares to similar firms (circle one)
Below Average

Average

Cost to make 1 small cup = 25 Baht

Cost to make 1 big cup = 40 Baht
Profit > 123 25 = 98*50 = 4,900
263 40 = 223*60 = 13,380 Baht
13,380 / day * 365 = 4,883,700
4,883,700 Baht * 2 = 9,767,4000
Baht

Above Average

Overall Financial Attractiveness of the Proposed Venture

The following factors are important in regard to the overall financial attractiveness of
the proposed business.
Assess the strength of each factor in the following table.
Overall Financial Attractiveness of Proposed Venture Assessment Tool
Low Potential Moderate Potential
1. Steady and rapid growth in Unlikely
Moderately likely
sales during the first one to
three years in a clearly
defined target market
2. High percentage of
Low
Moderate
recurring incomemeaning
that once you win a client,
the client will provide
recurring sources of
revenue
3. Ability to forecast income
Weak
Moderate
and expenses with a
reasonable degree of
certainty
4. Likelihood that internally
Unlikely
Moderately likely
generated funds will be
available within two years
to finance growth
5. Availability of exit
Unlikely to be May be available
opportunity for investor if
unavailable
applicable
Conclusion (report finding for each area)
A.
Total startup cash needed

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High Potential
Highly likely

Strong

Strong

Highly likely

Likely to be
available

B.

C.
D.

From the table above, the total startup cash needed is about 15.4 million including
all the capital investment and operating expense. As the result, it seems to be a
high startup point but in 2 years my business will able to gain the money back at
about 16 million. Therefore, my business is one of the service that moderately
likely in sales growth during first three years.
Financial performance of similar businesses
In first year of the business, we will spend the net income for 5 million and able to
earn money back at about 8 million. About 2 years later, our service will gain more
annual sales which is 16 millions and net income will be rise up to 10 millions.
Financial feasibility (circle the correct response)
Not Feasible
Unsure
Feasible
Suggestions for improving financial feasibility
The way to improving my financial feasibility is to make sure that my service able
to buy customer attention and keep the financial stable as my aspect all the time.

Overall Feasibility: Summary and Conclusion

Overall Feasibility of the
Business Idea Based on
Each Part
Product/Market Feasibility
Not feasible
Unsure
Feasible

Industry/Market Feasibility
Organizational Feasibility
Financial Feasibility
Overall Assessment

Suggestions for Improving

the Feasibility
Overall, the business seems
to be successful but we
need to make sure the
organizational and
financial feasibility
become more stable than
this.

Not feasible
Unsure
Feasible
Not feasible
Unsure
Feasible
Not feasible
Unsure
Feasible
Not feasible
Unsure
Feasible

Conclusionbriefly summarize your justification for your overall assessment.

Mid-night Club is one of the youngest company that try to establish in Thailand or
may be all over the world. This type of service requires high startup cash which seem to
have high risk for starting this business but as a result our company will earn back the
money for this business in about 2 years. Furthermore, our goal is able to persuade
customer mood, make the business to become more feasible, and make social except. Our

Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

business also decides to make the opportunity that we will plane to enter the large market
and moving in favor of the industry or partnership.
To sum up, Mid night Club will be feasible to establish from the evidence of the
amount of annul sales and net income. Another reasons why this type of service will be
feasible is because no one is open this 18 and below club yet and take the right gap in the
society. Therefore, this will be a new service that will provide for children.

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