1. Define Business Plan and Business Feasibility Study.
Business Plan - A written document describing the nature of the business, the sa les and marketing strategy, and the financial background, and containing a proje cted 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 estimat ed cost, and (3) will be profitable. Feasibility studies are almost always condu cted where large sums are at stake. Also called feasibility analysis. See also c ost benefit analysis. - A detailed analysis of a proposal with respect to i ts anticipated cost, potential problems, and possible outcomes in order to deter mine if the proposal should be implemented. A feasibility study for a small busi ness might include: an assessment of the market; an estimate of fixed costs, var iable 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 i s 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 lo ng-term. When writing a business plan, it is important to project into the futur e 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 fin ance. Delineating these three pillars of a business venture helps demonstrate th e viability of the entrepreneur s ideas. It clarifies how a business can be profit able, 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 s kills of the entrepreneur. -Action Plan A business plan explains how the business will operate in the marketplac e. It describes what is being sold, who the prospective customers are, where the y can be found and what is needed to succeed. The business plan guides the entre preneur through the start-up phase of the business and keeps her focused. -Selling Tool
Private investors. those changes sho uld be reflected in your business plan. A good business plan acts as a dynamic blueprint for running an d expanding your business. When you look for outside financing. you will need to consider adding executives to y our team that can help move your company in the right direction. however. banks or any other lending institution will want to see how you plan on running your business. A business plan will help executive talent see your business vision and determine whether or no t your company is a worthwhile investment of time and resources. A good business plan can also play a part in attracting rel iable suppliers. manpower and f inancial estimates and your plans for the future. *Overall Purpose of a Business Plan*
. Following a business plan can help you to map out the growth of your c ompany and give you confidence when you need it. you begin to understand what it will take to get your dream off th e ground. you w ill constantly need to concern yourself with financing your business. As you look to grow your busin ess. Financing concerns begin with the start-up costs and then continue with business expansion and new product development. one of the fi rst things the investor will want to see is your business plan. it is necessary for you to understand the main purposes of one. according to the Small Business Adm inistration.com. it ca n motivate you because it presents the business in an organized fashion. -Maintaining Focus A business plan contains all of your product information. what your original goals were and how business changes will affect your orig inal vision. according to Inc . Your business plan reminds you of why you started your business in the first pla ce. you should first write a business plan. -Fueling Ambitions Starting your own business can seem like a daunting task if you have nev er done it before.The business plan functions as a prospectus for potential investors. When you decide to make changes to your business. according to Inc. It also helps put together the best team by explaining the business in a presentable format. -Securing Financing As you start your business. accordi ng to the University of Colorado. It anticipates capital requirements and predicts cash flow to reassure lenders or b ackers. you get to see how your proposed changes will affect your entire business. To write a business plan you ca n use. When you break down your business into a business plan. When you make updates to your business p lan. what your expense and revenue projection s are and whether or not your plans for the future are attainable with the busin ess you have created. All of this can be answered by a well-written and thorough business plan.com. and even as your business moves along. -Enlightening Executives As your business grows. *Main Purposes of a Business Plan* If you are preparing to start your own business. you should refer to your business plan. When you spend the time to outline your busine ss in detail.
It tells the world how you approach business and how yo ur business approaches the world. According to Entrepreneur Magazine. The plan also describes the legal structure . there were thousands of buggy-whip makers. -Inspires Investor Confidence While some investors might like a gamble. insofar as is possible. the opportunities it can embrace and the threats it faces. and all have a vast distaste for losing money. 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. The principle members of management are profiled to show what each brings to th e table. Compre hensive business plans have three sections--business concept. -Structure and Management The business plan gives investors insight into the company's management.A business plan is the road map you create for your business. This description allows you to see how and why you r company meets a need in the industry. 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. It identif ies goals and quantifies. bankers and other funding sources w hy your business is a money machine. It gives readers an ove rview of your company. at the beginning of the 20t h century. The analysis can also highlight how your company fits into yo ur industry. -A Concise Introduction A business plan is a chance to tell who you are. marketplace and fi nancial--and these are broken down into seven components that include the overvi
. For example. the strategies you plan to use to achieve those goals. Business plans are also a tool for fundraising and one of the ways you can show investors. a partnership or some form of c orporation. most don t.and short-term goals. The S WOT analysis names each of your competitors and discusses their relative strengt hs and weaknesses.whether your company is a sole proprietorship. typical business plans average 15 to 20 pages. -Identifies Goals A business plan includes a description of the business that describes it s long. This part of the plan can show you areas where your organization is wea k or could use new or more talent. The few who remain downsized and survive in a market niche. A business plan includes financial statements and pro jections certified by independent accountants that can to quell investor concern s. 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. an analysis of market conditions and a description of how the company plans to use its profits to profit its investors and lenders. Those who failed to realiz e that they were in the larger business of "vehicle acceleration" were gone by t he beginning of the 21st century. *Importance & Purpose of a Business Plan* Business plans are documents used for planning out specific details abou t your business.
and factoring future growth and d irection into the business plan can be an effective way to plan for changes in t he market.ew or summary of the plan. figures and detailed plans in writing. Although clarifying direction in the business plan lets yo u know where you're starting. and new innovations or directions to take as the company grows. a description of the business. -Manage Company A business ncluding titles of ts as a management is on course with plan conveys the organizational structure of your business. growing or slowing trends." is very apropos. a new business has a better chance of attracting investors to provide the capital needed for getting started. or it can specify the exact product lines and services you'll offe r. market strategies." By putting statistics. secur e supplier accounts and attract executive level employees into the new venture. Even small one-page business plans have importance and purpose for the success of the business however. rambling narrati ve serves no purpose and can actually confuse project participants. Clarifying can consist of a simple description of your business and its products or services. "The development of a comprehe nsive business plan shows whether or not a business has the potential to make a profit. as well as a detailed description of your ideal customer. and financ ial information. particularly if he/she is footing the bill. -Clarify Direction The primary purpose of a business plan is to define what the business is or what it intends to be over time. There are basically six parts to any effective Feasibility Study: 1. It is also n ecessary to define the parts of the business affected either directly or indirec tly. The project sponsor should be identified. Consequently. facts. It also ac tool that can be referred to regularly to ensure the business meeting goals. Business plans can be shared with the executive candidates or desired partners t o help convince them of the potential for the business. I have seen too many projects in the corporate world started without a wel l defined project scope. sales targets or operational milestones. com petition analysis. including project participants and end-user areas affected by the project. -Attract Team Members Business plans can be designed as a sale tool to attract partners. operations and management. -Attract Financing The Small Business Administration states. Describe the different parts of Feasibility Study. The old adage. The scope should be definitive and to the point.
3. "The problem well stated is half solved. and persuade them to joi n the team. projects have wandered in and out of thei
.The Project Scope which is used to define the business problem and/or opportun ity to be addressed. future vision allows you to have goals to reach fo r. Clarifying the purpose and direction of you r business allows you to understand what needs to be done for forward movement. -Future Vision Businesses evolve and adapt over time. design and development. i directors or officers and their individual duties.
If the Feasibility Study is rejected . In addition. a product. this m ay never be discovered. The overriding considerations though are: -Does the recommended approach satisfy the requirements? -Is it also a practical and viable solution? (Will it "Play in Poughkeep sie?") A thorough analysis here is needed in order to perform the next step. it is not un common to discover there is actually nothing wrong with the current system or pr oduct other than some misunderstandings regarding it or perhaps it needs some si mple modifications as opposed to a major overhaul. or an informat ion system. In addition t o the recommended solution. Conclusion It should be remembered that a Feasibility Study is more of a way of thi
. 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.. From this analysis.. 2. If approved. it is here where whole rough designs (e. The review ser ves two purposes: to substantiate the thoroughness and accuracy of the Feasibili ty Study. How you define requirements for software is also substantially dif ferent than how you define them for systems. it may be a seemingly small gesture.The Approach represents the recommended solution or course of action to satisf y the requirements. Simply d ocument your findings instead. 4. either approve it.. Evaluation . 3.g.examines the cost effectiveness of the approach selected. a cost and evaluation summary is prepared which includes such things as a cost/benefit analysis. This b egins with an analysis of the estimated total cost of the project. Here.Requirements . After the total cost of the project has been calc ulated. 5..all of the preceding elements are then assembled into a Feasibility Study and a formal review is conducted with all parties involved. It is also at this point where the use of e xisting structures and commercial alternatives are considered (e.g. or ask t hat it be revised before making a final decision.r boundaries causing them to produce either far too much or far too little than what is truly needed. the reasons for its rejection should be explained and attached to the document . etc. and to make a project decision. otherwise you will spend more time unnecessarily in this stage (aka "Analysis Paralysis"). Also. such as a system. Review . it is very import ant that all parties sign the document which expresses their acceptance and comm itment to it. return on investment. Each exhibits totally different properties and. "build vers us buy" decisions). as such. various alternatives are considered along with an expl anation as to why the preferred solution was selected. but signatures carry a lot of weight later on as the project progresses. an estimate of labour and out-o f-pocket expenses is assembled along with a project schedule showing the project path and start-and-end dates. etc. 6. Without such analysis. "renderings") are develo ped in order to determine viability.The Current Analysis is used to define and understand the current method of im plementation. other alternatives are estimated in order to offer a n economic comparison.how requirements are defined depends on the object of the proje ct's attention. a bridge. For development projects. how requirements are specified for a product are su bstantially different than requirements for an edifice. the strengths and weakn esses of the current approach are identified (pros and cons). In terms of design relate d projects. reject it. For example. are defined differently. Analysts are cautioned to avoid the temptation to stop a nd correct any problems encountered in the current system at this time.
what I have just descri bed is essentially the same process we all follow when purchasing an car or a ho me. but it shoul d also be used for comparative analysis when preparing the final Project Audit w hich analyses what was delivered versus what was proposed in the Feasibility Stu dy. such as the "Agile" methodology proponents. it becomes more important to document the Feasibility Study particularly if large amounts of money are involved and/or th e criticality of delivery. Things that are generally feasible are definitely a main part of any gov ernment study. I've got a good used car I want to sell them. For example. Not only should the Feasibility Study contain suffici ent detail to carry on to the next succeeding phase in the project.
. As the scope of the project grows. I have read where s ome people in the IT field. Frank ly. However. Feasibility Studies represent a common sense approach to planning.nking as opposed to a bureaucratic process. Parts of the feasibility study. If this is true. it is just plain good business to conduct them. consider Feasibility Studies to be a colossal waste of time.