MS Engineering Management

Course: Entrepreneurship Instructor: Sir Farhan Daud Qazi

Assignment 02
Group Members:
Usama Ilyas (S2021198003)

Sajid Mahmood (S2021198007)

Feasibility Analysis Report:

Introduction:
The idea is to launch a mobile app or website to provide a platform between business owners,
product manufactures, service providers or event organizers and the advertisers such as local
rickshaw owners, local buses, private car owners and hawkers. Our app will be like a bridge
between business owners and local transport owners (rickshaws, buses etc.)

Before starting the business, it is recommended to perform a detailed feasibility analysis of the
concerned business. We have used Primary and Secondary research to conduct the feasibility
analysis of our business.

There are four areas of feasibility analysis:

1- Product/ Service Feasibility

2- Industry/ Target Market Feasibility
3- Organizational Feasibility
4- Financial Feasibility

We will discuss each one of them one by one:

 1- Product/ Service Feasibility:
There are two sub categories of this Feasibility analysis:

 Product/ Service Desirability:

We have conducted primary research in this regard to get the response from our potential
customers about our idea. The rickshaw drivers found this idea very unique as there are no
such online platform where they can contact with small business owners to give their services
for advertisement purposes to earn money.
On the other hand, small business/ product owners were agreed upon the fact that there is a
gap in the market in this field. These local business owners faced difficulty in bargaining with
rickshaw drivers for advertising. So this app will solve their problem in many ways. By all these
discussion we have come to a conclusion that our idea of creating such an app is perfectly
making sense.

We have also made a Concept Statement of our business. The Concept Statement is:

Concept Statement

Mobile Advertising Business

Service:

Our Company will make a mobile App to link the local/ small businesses with the local transport
owners (Rickshaws, Buses etc). By registering with the App, local/small businesses can find and
hire the local rickshaws or buses in their areas who will advertise these businesses by their
physical appearances in the public.

Target Market:

In the start of our business, we will be focusing only on small/ local business or event organizers
who want to advertise their product/ service through local transport within the city at very low
rates. On the other hand, if we talk about the local transport, we will be targeting the rickshaws
and local buses in the city to register them with our App.

Why mobile advertising?

Advertisement industry is growing rapidly. But the businesses who have very low budget for
advertising their product or services always suffer with the burden of expense of traditional
advertisement. In this scenario, advertisement through rickshaws and local buses is very cheap
and quite impressive as compared to its cost. Both the parties can connect with each other
through our App quite easily.

Special Feature:

Our business idea is itself a unique one as there is no such mobile App running in Pakistan
which provides this facility. There are some facebook pages or websites to hire the rickshaw
advertising service but they operate manually on phone calls. But in our App, business owners
can themselves hire the number of rickshaws and buses according to their route and rent. Also
it requires no traditional bargaining. So our business idea will add value to its customers.

Management Team:

This mobile advertising company is led by two cofounders, Usama Ilyas and Sajid Mahmood.
Both of them are Registered Engineers and still working as IT experts in Punjab Government.

 Product/ Service Need:

We conducted a secondary research to know about the need of our business. We used GOOGLE
search to carry our secondary research on the topic. By viewing different websites, we came to
know that the need for advertisement through rickshaws/ buses is quite high.

Official statistics released by the government of Pakistan in 2010, state that there are
almost 100,000 registered rickshaws in Pakistan roaming around various cities. Looking at the
cost, a Rickshaw driver charges a meager amount of Rs200-300 per month for its available
space. Thus, if a marketer places its ad on 10 rickshaws, it will only cost Rs2000-3000 per
month. Therefore, this medium is highly suitable for those with limited marketing budgets,
mainly small businesses or service startups. ( https://aurora.dawn.com/news/1141882 )

We have also checked on internet whether there are websites or apps available for hiring
rickshaws or buses for advertisement. In our research we found very few facebook pages or
websites for this purpose like https://www.adshor.com/ (outdoor advertizing on rickshaws mainly
in Karachi). But there is no such platform for small business owners in the form of mobile app
where they can easily hire rickshaws/ buses on their own at low rates without physical
bargaining.
So for the local businesses and product manufacturers, there is definitely need to have a mobile
app where they can find these local transport owners to achieve the goal of low cost
advertisement.

2- Industry/ Target Market Feasibility:

Industry/ Target Market Feasibility is divided in two sub categories:

 Industry Attractiveness:
There should be at least three characteristics of an industry to be attractive. The industries
which are younger in their life cycle are usually attractive. If we talk about advertisement
industry, it has been escalating day by day for the past many years. But if we add an online
platform to act as a match maker between advertisers and local transport, it will be a new
concept in its nature. Online apps have been very popular in the market for the past 15 years.
So we can say that the business through online apps is younger in its life cycle.

Advertisement industry is highly fragmented as it is distributed between Print media, Electronic

media, Social media, bill board and local transport and many more.

 Target Market Attractiveness:

Advertisement market is too vast to capture for the new entrants. So we are just focusing on a
small group in the industry as our target market. We are focusing only on small/ local
businesses that have small budget for their product/ service advertisement. We will be focusing
to provide online platform for these local/ small businesses to access the local transport like
rickshaws for their advertisement at low rates. Traditional ways of advertisement require a lot
amount of money. So this idea will surely be attractive to our target market as it is quite easy to
access and relatively at very low rates.

3- Organizational Feasibility Analysis:

There are two aspects of Organizational Feasibility Analysis:

 Management Prowess:
We are the team of two members who are going to start this venture as the founders. We both
are engineers and have been serving as the professionals for the five years. We have strong
social network which will surely helpful for our future business endeavors. To start this
business, we need to develop a mobile app. Though, we cannot develop the app on our own,
but we have such contacts by which we can easily get the app development done. After the app
is developed, we can easily run and manage the app on our own. So we have sufficient
management prowess to start and run this business smoothly.

 Resource Sufficiency:
If we make a list of our non financial resources, it will include mobile app, office place and key
employees. To have a perfect mobile app for the start of our business, we can hire a third party
to develop an app for us. We own a place that can be shaped as our first office and it will be our
key resource. In the start we can work as the founders and also as the employees because we
only need to run the app in the start. So we have sufficient resources to start this business.

4- Financial Feasibility:
There are three aspects of financial feasibility of a business:

 Total Startup Cash Needed:

One Time Expenses Budget Monthly Expenses Budget

(For Six Months)

First Month Rent 12000 Monthly Rent 60000

First Month Utilities 4000 Utility Bills 24000
Tables and furniture 10000 Employees Salaries 60000
Mobile App 500000 Marketing 20000
One Time
Total Expenses 526000 Total Monthly
Expenses 164000
(6 Months)

Total Estimated Budget (For First Six Months) = 690000 PKR

This is the total estimated startup cash needed for our mobile advertising business. The total
capital needed is moderately high which we will bear by ourselves. We do not need investors at
the start of our business. We will fund this investment by our own savings and resources.

 Financial Performance of similar businesses:

The companies who deal in online match making of different customers or segments of society
are considered to be in our similar businesses list.

We have searched for some similar businesses’ financial data which is as follows:

(Revenue detail of foodpanda from the year 2013 to 2016)

(Annual Financial Data of Uber from 2016 to 2020)

We have also searched for Pakwheel.com as it is Pakistan’s leading online vehicle trading
company which seems to be similar in nature to our mobile advertising business. We found that
the annual revenue of Pakwheel.com is $116.8M.

From the financial data of these businesses, it is quite inspiring for our business to grow in same
fashion if we follow all the necessary steps to make a business successful.

 Overall Financial Attractiveness of the Proposed Venture:

 The amount of capital needed to start this business is moderate which can be funded by
our personal savings and resources.

 The risks of failing the business are not very high as there are negligible competitors for
the start of this business.

 There is High percentage of recurring revenue in our business. If we win a client, it will
provide us continuous source of earning in the form of money on every deal’s
commission.

 The more percentage of expense is one time investment in our business. On monthly
basis, the expenses will be very less than the expected sales

After all the above discussion on feasibility analysis of our proposed venture, we want to
summarize the whole discussion in the form of simple first screen test

First Screen Test:

Part 1: strength of business idea

1. Extent to which the idea: Strong +1

• Takes advantage of an
environmental trend
• Solves a problem
• Addresses an unfilled gap in the
marketplace
2. Timeliness of entry to market very timely +1

3. Extent to which the idea “adds Medium 0

value” for its buyer or end user

4. Extent to which the customer is Moderately 0

satisfied by competing products satisfied
that are already available
5. Degree to which the idea Moderate 0
requires customers to change changes
their basic practices or behaviors required

Part 2: industry-related issues:

1. Number of competitors Few 0

growth phase 0
2. Stage of industry life cycle

3. growth rate of industry Strong +1

growth
4. Importance of industry’s “Would like to 0
products and/or services to have”
customers

5. Industry operating margins Low -1

Part 3: target Market and Customer-related issues:

1. Identification of target market Identified +1

for the proposed new venture

-1
2. Ability to create “barriers to Unable to
 entry” for potential competitors create

3. Purchasing power of customers High +1

4. Ease of making customers aware High +1

of the new product or service

5. growth potential of target Moderate 0

market

Part 4: Founder- (or Founders-) related issues:

1. Founder’s or founders’ No experience -1

experience in the industry

2. Founder’s or founders’ skills as Moderate skills 0

they relate to the proposed new
venture’s product or service

3. Extent of the founder’s or Moderate 0

founders’ professional and social
networks in the relevant industry

4. Extent to which the proposed Moderate 0

new venture meets the founder’s
or founders’ personal goals and
aspirations

5. Likelihood that a team can be very likely +1

put together to launch and grow
the new venture

Part 5: Financial issues:

1. Initial capital investment Low +1

 Two to three 0

2. Number of revenue drivers (ways

in which the company makes
money)

3. Time to break even one to two 0

years

4. Financial performance of similar Strong +1

businesses
5. Ability to fund initial product (or High +1
service) development and/or initial
start-up expenses from personal
funds or via bootstrapping

Overall potential:

Part 1: High potential +5

Strength of Business Idea

Part 2: Moderate potential 0

Industry-Related Issues

Part 3: High potential +5

Target Market and Customer

Part 4:Founder- (or Founders-) Low potential -5

Related Issues

Part 5: Moderate potential 0

Financial Issues

overall Assessment High potential +5