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Business Development Projects

Decision Making Process

Business Development Projects - Decision Making Process


Entrepreneur / Market Conditions Business / Project Site Financing
Developer

Personal Overall Financial


Market Operational Feasibility Physical Feasibility
Stability Feasibility

Borrower Financial Current Demand Revenue to be generated Site Characteristics Debt Required
History

Equity Required
Accessibility
Legal Status Competition Management Capacity (Debt & Equity Should
(Customers and Products)
cover Cost of Development)

Current Financial Future Changes in Debt Service Coverage


Costs Construction Schedule
Status market conditions Ratio

Reasonableness of Adaptability:
Personal Functional Time of Facility
Decision to Capture Legality of Operations What happens if...
Characteristics (Plans / Layout)
Market - Costs, interests rates go
up? or
Municipal Permits: zoning, - Operating income stays
Access to Factors of planning, historic preservation, flat?
Prior Experience Production licenses & inspections (building - Competition increases?
codes) Can the project still work?

Depth of Staff Site Control

Price and Productivity Development Team


Assumptions (leads to costs)

NET OPERATING INCOME Physical Capacity & Use (units, Go


(before debt services) commercial / residential) or
No Go ?
Cost of Development

Value of Collateral
(Appraised Value after
construction)

Widener University SBDC - March 30, 2016 - Lenin Agudo