TECHNICAL STUDIES

INSTRUCTIONS
The general objective of this activity is to: Analyze and determine the optimal size, location, equipment, facilities and
organization required to carry out the production or service provision.

The specific sections of the technical study are:

1. Determine the location decisions and technology investments in tech and web platforms (one paragraph
description and a table with the numbers)
• Justify the best location of your business according to closeness to costumers, cost reductions or any
other advantages you consider in deciding the best location.
• If you have an only online business, describe the investment in tech and web and app designing.
• If you want to open a restaurant or any other business in the retail sector, consider the traffic count of
the location (potential passersby or buyers) in a time period (weekly, monthly, etc.) and the average
purchase ticket. (Traffic count/buyers X Average ticket=Potential income).
• Business locations and the factors affecting choice of location: https://www.youtube.com/watch?
v=SkYHZsLLb8k
2. Determine the require investment in location fixtures and premises adjustments, technology, plant and
equipment and furniture.
• Your business need some operating assets to provide a service or to sale a product, here you need to
describe them and specify the investment cost.
• Show the information in a table or tables as needed, describe the information in the table.
3. Determine the working capital investment requirements: inventory, receivables and payables.
• Show a detail inventory needed if you retail items, you may not have inventory if you provide a service.
• If your revenue is from cash sales, you don´t have receivables, but if a part of your revenue is from credit
sales, estimate a percentage and show an average of them.
• If you have credit purchases to supplier then show the average of them, if you have cash purchases from
supplier don´t show this.
• To calculate the working capital, compare a company's current assets to its current liabilities. Current
assets listed on a company's balance sheet include cash, accounts receivable, inventory and other assets
that are expected to be liquidated or turned into cash in less than one year. Current liabilities include
accounts payable, wages, taxes payable, and the current portion of long-term debt. Current assets are
available within 12 months. Current liabilities are due within 12 months.
Working Capital Formula | How to Calculate Working Capital (with Example) https://www.youtube.com/watch?
v=elF_JxDRF2Q

https://www.youtube.com/watch?v=h0sOrK61kEo

4. Determine the Prices of products to sell and unit cost of products, if you have a service business you may not
have unit cost. If you produce the goods you have unit cost of production, if you retail you have unit cost of
sales. Define the price strategy: cost and market considerations are important; a company cannot sell goods
below cost of production and remain in business, and it cannot sell goods at a price unacceptable in the
marketplace. Firms that employ pricing as part of the strategic mix, however, are aware of such alternatives as
market segmentation, competitive pricing in the marketplace, and other market-oriented pricing factors,
including cultural differences in perceptions of pricing.
• Define your pricing strategy, either Pricing for Market Penetration or Price Skimming.
• Show a table with the selling prices, write a short description of the reason to place those prices, it could
be because of the competition have these prices, or it could be estimate with the unit cost plus the
expected profit per unit or service.
• You must show a table with both the prices and the unit cost, if you provide a service, try to estimate
the unit cost of 1 service provided, if it is not possible then leave it to the general expenses in the next
section.
• Pricing Strategies - How to price a product:
• https://www.youtube.com/watch?v=4t_MEO_la_k
https://www.youtube.com/watch?v=rRaoCT4ZJwU
5. Determine Monthly general expenses, administrative expenses and selling expenses.
• Detail the salaries per employee and your salary as well (Payroll expenses).
• Detail utility expenses, administrative monthly expenses (office supplies, maintenance and repairs, Web
Hosting and Domains), selling expenses, marketing and advertising, insurance, rent, depreciation,
interest expenses (borrowed capital).
• Show a table or tables to show the information and a paragraph (s) to explain your numbers.
6. Determine the selling growth opportunities, future investment requirements, and possible increase in cost and
expenses for the next 5 years.
 • Your market research from the previous delivery should have information about market expected
growth, so based on this information and other expectancies about your business performance in the
market, you need to forecast your level of sales or market demand for the next 5 years, show next 5
year expected revenue growth rate, explain that number estimation in a paragraph. Which data do you
count on?
• Detail the require investments to support the expected growth in your business if it is the case.
• You may state that inflation could be the increase in the cost and fixed expenses for the next 5 years.
• Build an income statement for the first year of operations including your estimated sales and expenses.

WORK ON THE TEMPLATE NEXT PAGE

3 BUSINESS TECHNICAL RESEARCH FOR THE FEASIBILITY

STUDY

3.1 LOCATION AND TECHNOLOGY INVESTMENTS

3.2 REQUIRE FIXED INVESTMENT

3.3 WORKING CAPITAL INVESTMENT REQUIREMENTS

3.4 UNIT PRICES AND COST OF PRODUCTS OR SERVICES

3.5 GENERAL, ADMINISTRATIVE AND SELLING EXPENSES

3.6 GROWTH OPPORTUNITIES AND EXPECTED FUTURE INVESTMENTS