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A P P E N D I X 2 . 1

First Screen
P A RT 1: S T R E N G T H OF TH E BU S I N ESS I DEA
For each item, circle the most appropriate answer and make note of the ( -1), (0), or ( +1)
score.

Low Potential Moderate High Potential

( -1) Potential (0) ( +1)

1. Extent to which the idea: Weak Moderate Strong

• Takes advantage of an
environmental trend
• Solves a problem
• Addresses an unfilled
gap in the marketplace
2. Timeliness of entry to Not timely Moderately Very timely
market timely
3. Extent to which the idea Low Medium High
“adds value” for its buyer
or end user
4. Extent to which the Very satisfied Moderately Not very
customer is satisfied by satisfied satisfied or
competing products that ambivalent
are already available
5. Degree to which the idea Substantial Moderate Small to no
requires customers to changes changes changes
change their basic practices required required required
or behaviors

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CHAPTER 2 Developing and Screening Business Ideas 45 ■

P A RT 2: I N D U S T RY -R E L AT E D I S S U E S
Low Potential Moderate High Potential
( -1) Potential (0) ( +1)
1. Number of competitors Many Few None
2. Stage of industry life cycle Maturity phase Growth phase Emergence
or decline phase
phase
3. Growth rate of industry Little or no Moderate Strong growth
growth growth
4. Importance of industry’s “Ambivalent” “Would like to “Must have”
products and/or services have”
to customers
5. Industry operating Low Moderate High
margins

P A RT 3: TA R G E T M A R K E T AN D C U S TO M E R -R E L AT E D I S S U E S

Low Potential Moderate High Potential

( -1) Potential (0) ( +1)
1. Identification of target Difficult to May be able Identified
market for the proposed identify to identify
new venture
2. Ability to create “barriers Unable to May or may Can create
to entry” for potential create not be able
competitors to create
3. Purchasing power of Low Moderate High
customers
4. Ease of making customers Low Moderate High
aware of the new product
or service
5. Growth potential of target Low Moderate High
market
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■ 46 PART II What to Do Before the Business Plan Is Written

P A RT 4: F O U N D E R - ( O R F O U N D E R S -) R E L AT E D I S S U E S

Low Potential Moderate High Potential

( -1) Potential (0) ( +1)
1. Founder or founders No experience Moderate Experienced
experience in the industry experience
2. Founder or founders skills No skills Moderate skills Skilled
as they relate to the
proposed new venture’s
product or service
3. Extent of the founder or None Moderate Extensive
founders professional
and social networks in the
relevant industry
4. Extent to which the Weak Moderate Strong
proposed new venture
meets the founder or
founders personal goals
and aspirations
5. Likelihood that a team can Unlikely Moderately Very likely
be put together to launch likely
and grow the new venture

P A RT 5: F I N A N C I A L I S S U E S

Low Potential Moderate High Potential

( -1) Potential (0) ( +1)
1. Initial capital investment High Moderate Low
2. Number of revenue One Two to three More than
drivers (ways in which the three
company makes money)
3. Time to break even More than One to two Less than one
two years years year
4. Financial performance of Weak Modest Strong
similar businesses
5. Ability to fund initial prod- Low Moderate High
uct (or service) develop-
ment and/or initial startup
expenses from personal
funds or via bootstrapping
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CHAPTER 2 Developing and Screening Business Ideas 47 ■

O V E R A L L P OT E N T I A L
Each part has five items. Scores will range from -5 to +5 for each part. The score is a
guide—there is no established rule-of-thumb for the numerical score that equates to high
potential, moderate potential, or low potential for each part. The ranking is a judgment
call.

Overall Potential of the Suggestions for

Business Idea Based on Improving the
Score ( -5 to +1) Each Part Potential
Part 1: High potential 
Strength of Business Moderate potential 
Idea Low potential 

Part 2: High potential 

Industry-Related Moderate potential 
Issues Low potential 

Part 3: High potential 

Target Market and Moderate potential 
Customer-Related
Low potential 
Issues

Part 4: High potential 

Founder- (or Moderate potential 
Founders-) Related
Issues Low potential 

Part 5: High potential 

Financial Issues Moderate potential 
Low potential 
Overall Assessment High potential 
Moderate potential 
Low potential 

Summary—briefly summarize your justification for your overall assessment: