Feasibility Analysis

Project Overview:

You will be given a fictional entrepreneurial opportunity. Using a scenario, you will go through the six steps of a feasibility analysis to decide if this opportunity should be pursued.

Directions:

Part I

1. Follow your instructor’s directions for dividing into groups.

2. Read the Entrepreneurial Opportunity Student Handout scenario provided to your group by your instructor. Select one of the scenarios after reading the handout and answer the Feasibility Analysis questions below.

3. Complete the first step in a feasibility analysis, the preliminary analysis. Answer the following questions:

· Is there a demand for this idea

· What is the potential market size

4. Complete the second step in the feasibility analysis by preparing a projected income statement. Answer the Projected Income Statement questions below. List all the resources you used to estimate the numbers you gave.

5. Complete the third step in the feasibility analysis by conducting a market survey. You will need to create a market survey first, and then each individual in your group will need at least three people to fill out the survey. Use the Sample Market Survey Student Handout as a resource.

Part II

6. Complete the fourth feasibility analysis step by planning the business organization and operations. Start by choosing a method for idea generation and then use the method to brainstorm the possible parts of the business organization.

7. When all the ideas are exhausted, create your business’s organization. Consider the team structure and create a visual representation of the organization.

8. Complete the fifth feasibility analysis step by preparing the opening day balance sheet. Answer the Opening Day Balance Sheet questions below. To do this, you will research to come up with appropriate estimates. Remember, the balance sheet should always be balanced. The assets should equal the liabilities plus equity.

Part III

9. Complete the last step in the feasibility analysis. Step back, look at all the information you have gathered and decide whether this is a good entrepreneurial opportunity. Ask yourself:

· Does it align with the vision

· Is it financially sound

· Does the idea present a competitive advantage

10. Fill out the Final Report Outline questions below. This will be the outline for your report.

11. Use the outline to write a detailed report on a separate sheet of paper which references each of the steps in the feasibility analysis and covers everything in the questions below. The final report should be written individually.

12. Once completed, turn in your project according to your instructor’s directions.

Feasibility Analysis Questions:

1. Is there a demand for this idea? Explain where you found the answers to this question.

2. What is the potential market size? Explain where you found the answers to this question.

Projected Income Statement Questions:

1. What is the company name?

2. What is the projected revenue, which is the total income generated from sales or services?

3. What is the projected cost of goods sold, which is the direct cost associated with producing goods and services: materials, labor and production costs?

4. What is the projected gross profit, which is revenue minus the cost of goods sold?

5. What are the projected operating expenses, including marketing, salaries, rent, utilities and other expenses?

6. What is the projected operating income, which is the gross profit minus the operating expenses?

7. Are there any other projected income or expenses, such as tax or other expenses?

8. What is the projected net income, which is operating income minus other income or expenses?

9. What sources did you use to gather this information?

Opening Day Balance Sheet Questions:

1. What is the company name?

2. What is the projected value of the following assets, including cash, accounts receivable, inventory, prepaid expenses and total assets?

3. What is the projected value of the following liabilities, including accounts payable, short-term loans and total liabilities?

4. What is the projected value of the following equity components, including the owner’s investment and total liabilities and equity?

5. What sources did you use to gather this information?

Final Report Outline Questions:

1. Do you believe this is a good entrepreneurial opportunity?

2. Who is the market for this product or service? How big is this market?

3. What did you learn from the market survey?

4. Is this product or service financially viable?

5. Would you make changes to the proposal to make this a better entrepreneurial opportunity?

Rubric:

Description	Possible Points	Your Score
Responses · Each response is filled out completely · Responses show an understanding of the concepts presented	20
Market Survey · Designed and given to at least three individuals per individual in the group · Survey is designed to give helpful feedback to the team	10
Business Organization · Information is presented in a manner, so it is easy to read and see the connections between parts of the company · Departments represented make sense and incorporate the majority of what is needed to run the given business	10
Research & Organization: · Proper research was conducted to complete the assignment · Sources were cited appropriately based on instructions provided · Information was presented in a logical organized manner	30
Concept & Understanding: · Understanding of the concept is clearly evident · Effective strategies were used to achieve the final report · Logical thinking was utilized to arrive at the report’s conclusion	30
Total Points	100