When considering investing time and money into a business venture you must look at every aspect from its conception, potential growth of the business and profitability. There really is no way of guaranteeing a business will succeed, too many variables exist. Some of these variables include your experience, the ongoing costs and the customer base.
An objective opinion on your business idea can give you a new perspective. You can get this unbiased advice from a business advisor. Banks can help you there.
A feasibility study to determine whether your business idea will succeed should be undertaken.
Firstly you must determine there is a healthy market for your product or service.
- Determine your market and clearly identify the size and what percentage you hope to capture. Use relevant statistics in this section to support your claims. What growth has the market you have chosen shown, what is the potential for future growth?
- What makes your idea unique or better than what’s already out there?
- The start up capital required – you should show here that you have enough capital to run the business until it is self sustainable and also that you have enough funds to run the business for 12 – 24 months.
- Funding resources should be listed here. State how much you personally are contributing to the business and any investors you have.
- Now you must show your management abilities. Can you run this business successfully? List your business experiences, skills and education. Show how you intend to manage the business.
- You can then include a market analysis – this shows the demand for your product or service and you can also estimate the size of your slice of the market.
How will your business fit in with the current players?
The financial feasibility of the business idea should involve the following:
- prepare a sales forecast
- estimate start-up and working capital costs
- estimate profitability
- assess the financial viability of the business