The remainder of this document provides the detail you need in order to complete this assignment. Please be sure to follow it closely.
Business Concept—this is a brief overview, setting the stage for the detail to follow. Only include here a broad description of your product/service.
· Value proposition (including the pain in the market your product will resolve)
· Product definition (broad-based description—you will provide much more detail later in the paper.)
· Customer definition (broad-based description—you will provide much more detail later in the paper.)
· Which distribution channel alternatives are available, and which customers will be served by them? (if required)
· Are there ways to innovate in the distribution channel? (Often the answer is no; this also may not be required at all).
· What is the potential – if any – for growth and spin-offs?
· Restate in easy to understand terms how we are going to make money and how the business will have an impact in the marketplace.
Industry Analysis—this section takes a look at the businesses operating in the same industry you will enter.
· Industry analysis—first, define the industry you will enter, unless it’s really obvious, such as the restaurant industry.
o Porter’s 5 forces analysis: What does this analysis mean for your particular business?
o Industry attractiveness (based on above analysis): Is this an attractive industry to enter? Why or why not?
· SWOT analysis of your company. Be sure to do this correctly: strengths and weaknesses are internal factors, and opportunities and threats are external forces or trends that are out of your control. Hint: you might want to include PEST—political, economic, socio-cultural, technology trend analysis—in the external portion of this analysis. This is not a separate analysis! PEST trends form the basis for the opportunities and threats in the SWOT. What does this SWOT analysis mean for your particular business? How does it help you make decisions on the feasibility of the business?
· Competitor analysis (i.e., Who are the competitors? How successful have they been? What are their revenues? How are you differentiated from your competitors and how will you be able to out-compete them? Be specific in this section, and remember, you analyze your competitors; you cannot just list them.)
· Distribution channels: This section may not be necessary. Think this through, and ask me questions if you are not certain.
o What channels currently connect your type of business to the buyers (this means you have to know who your buyers are)?
o Which channel alternatives are available to you?
o What are the risks/benefits associated with each channel? Why did you pick the one you did?
Market Analysis—this section describes and defines who you will sell to. No industry information (i.e., competition, suppliers, etc.) should be in this section.
· Target market description: Describe the target market and include statistics indicating the size of the total relevant market. Completing the first two sections here require you to perform secondary research. Use data from secondary sources to provide a vivid description of your target market. (You must use footnotes to cite your source, using the Word automatic footnote function, NOT a Works Cited or References section at the end of the paper. Emily Missner in the library is very helpful). If you are targeting a local market, i.e., you are opening a restaurant in Philadelphia, your market sizing must be based on that local market.
§ Market size
§ Market growth rate
§ Market trends and what they mean for your business
§ Key success factors for this market and how you will ensure you meet them.
o Primary Customer Description—build a profile of the primary group you expect will be interested in your product or service. This profile may contain the following elements:
§ If primary customer is a consumer (i.e. if you are pursuing a B2C business model; only discuss those factors that are relevant to your decision-making). Also, discuss them, don’t list them. That means explain why they are important. If they are not important, don’t include them. As an example, if you are targeting both men and women, then you don’t include gender.
· Age
· Gender
· Profession
· Education level
· Household income level
· Marital status
· Geographic location
§ If primary customer is a business (i.e. if you are pursuing a B2B business model; only discuss those factors that are relevant to your decision-making). Discuss them, don’t list them, same as above.
· Company size
· Types of products and services they provide
· Annual revenue
o NOTE: You may need to understand both the business customer and an end consumer. For example, if you sell a product through a retail chain, you will need to understand your actual customer, i.e., the one who pays you for your product (such as a distributor or the retail outlet), as well as the end consumer who will buy it from the retailer; thus, both of these demographic profiles will be needed. Be sure all information in this section actually adds to the discussion, which means you only include what is important and what will help you make business decisions.
o Primary Research: Collect and analyze data from your target market that helps you to credibly determine whether you have a feasible business. Primary research, such as surveys and interviews, should help you answer the following key questions and is absolutely required. We can discuss the most applicable type of primary research you should use if you are unsure. If you are using a survey, plan on collecting about 100 responses. If you are using interviews, you should complete at least 20.
§ Who is most likely to purchase the product or service at market introduction?
§ What do these customers typically buy, how do they buy it, and how do they hear about it?
§ How often do they buy?
§ What is their buying pattern?
§ What would they expect to pay for this product/service?
§ How—if at all—can the new venture meet the customers’ needs?
In this section in the feasibility analysis, you only include the information that is relevant to the discussion of feasibility. That means you do not list every single question you asked of your sample, nor does it mean you list the exact distribution of answers from each question. What it does mean is that you must “find the story” in the numbers—what do the results of your analysis mean for your business? What are the relevant statistics from the research? Be sure to include how you released the survey (or did interviews) and how many respondents you had. Never include respondents’ names! That is a violation of their privacy.
· Entry strategies (initial market penetration – selling to the first customers)
o What marketing tactics will you use in order to realize/achieve/implement your entry strategy?
o NOTE: Basically, this section in the BFS requires you to describe how you intend to enter the market and acquire your first (major) customer(s). What types of market messaging will you use? How will your intended customers find out about you?
Founding Team—this section describes the backgrounds of the founders. If your business cannot financially support your entire team, don’t worry about it. It will not affect the grades of those who are “left out.” NOTE: This is an area where many people write fiction. Don’t do it!!!
o Qualifications of the founding team. Include here a one- paragraph description (for each founder) of the specific jobs each founder has held, what you did there, and how long you worked there. Yes, that means your co-ops.
o Gap analysis—what is missing from the founding team’s skills portfolio, and how will it be addressed (e.g., key hires, professional advisors, board of directors, independent contractors)?
Product/Service Development Plan—you will finally go into detail about your product or service.
o Detailed description and unique features of product/service—this is where you put all the detail. If you are unsure what “all the detail” means, ask me. You’ll need to tell me what your project is for me to tell you what detail you will need.
o Identity of likely outsourced manufacturing company, if you have a product-based company and/or will outsource development of a technology product/service.
o Estimated costs of outsourcing production, if you have a product-based company and/or will outsource development of a technology product/service.
o Intellectual property acquisition (if relevant; this is both IP you need to actually acquire from another company, as well as any patents, trademarks, copyrights and/or trade secrets you develop and file yourself).
o Plan for prototyping and testing, if you have a product-based business and/or are developing a technology product/service.
Financial Plan. This section includes an MS Word section and an MS Excel section. NOTE: Online financial templates usually lead you astray. Therefore, you may not use them! You must build your own Excel® spreadsheets.
o Narrative assumptions or the premises for resource needs. (Note: For some reason, many students forget to include this section. Unfortunately, if you forget to do the narrative assumptions your grade will suffer!) You may bullet point these; in fact, that is typically a better format for assumptions. What is an assumption? It could be the number of units of your product you intend to sell; what price you will sell them for; the revenue growth rate you are assuming; the percentage of the selling price that will represent the COGS; your monthly rent; interest rate on any loan you take; etc. Anything that drives your revenues and expenses that is not generally known needs to have an assumption attached. That means that simple items purchased, such as computers and furniture, do not need assumptions. Only those things that are out of the ordinary or vary considerably need assumptions. Also include in here the legal form your business will take; that will have an impact on the taxes your company will pay (or won’t pay).
o Cash needs assessment (three years of a cash budget, done annually). Include all cash invested in or loaned to the business as well as all of your expenses that must be paid out. When estimating your cash needs, be sure to include all start-up expenses as well as ongoing cash needs until your business can sustain itself. Remember that this will be different from your income statement, since not all cash coming in to the business (such as bank loan money and founder investments) shows up on an income statement, and there could be some non-cash expense items on the income statement. Also, if you take a bank loan, only the interest shows up on the income statement; there is also, however, a principal portion of the payment that is a cash outflow.
o Pro-forma income statement (three years, done annually). All expenses must be broken down in detail. You cannot simply list SG&A and report one lump sum, for example.
New Venture Development Timeline—all inclusive timeline that runs from completion of feasibility analysis to launch of the business.
o Tasks that will need to be accomplished from the completion of the feasibility analysis up to the date of launch in the order of their completion and with actual time frames included of how long each will take.
Appendices—anything else you would like to add, such as menus for a restaurant, floor layout for a retail store
Note: Pro forma financial statements and budgets must be uploaded as an MS EXCEL FILE.
