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Section 5.1Section 5.1 Pages 75-79Pages 75-79

What you’ll learnWhat you’ll learn The background of The background of entrepreneursentrepreneurs

How to turn your idea into a How to turn your idea into a business conceptbusiness concept

5.1 Feasibility Analysis: Testing an Opportunity

What you’ll learnWhat you’ll learn How to test your concept in How to test your concept in the marketplace with a the marketplace with a feasibility studyfeasibility study

How to make a conception How to make a conception gridgrid

5.1 Feasibility Analysis: Testing an Opportunity

Why it’s importantWhy it’s important Not every idea can become a Not every idea can become a good business.good business.

Ideas must be tested before Ideas must be tested before they are put into the they are put into the marketplace.marketplace.

5.1 Feasibility Analysis: Testing an Opportunity

Key TermsKey Termsbusiness conceptbusiness concept

featurefeature

benefitbenefit

feasibility analysisfeasibility analysis

target customerstarget customers

competitive gridcompetitive grid

5.1 Feasibility Analysis: Testing an Opportunity

5.1 Feasibility Analysis: Testing an Opportunity

Springboard

Generate ideas for an after school delivery service.

I. DEVELOPING A I. DEVELOPING A BUSINESS CONCEPTBUSINESS CONCEPTA A business conceptbusiness concept is an idea for is an idea for a new business that can be a new business that can be tested.tested.

5.1 Feasibility Analysis: Testing an Opportunity

II. THE BUSINESS II. THE BUSINESS CONCEPTCONCEPT

A.A. To build a business To build a business concept statement, concept statement, answer four questions.answer four questions.

5.1 Feasibility Analysis: Testing an Opportunity

1.1. What is the product or What is the product or service being offered?service being offered?

2. 2. Who is the customer?Who is the customer?

3.3. What is the benefit you are What is the benefit you are providing?providing?

4.4. How will you get the product How will you get the product or service to the customer?or service to the customer?

5.1 Feasibility Analysis: Testing an Opportunity

B.B. A A featurefeature is a distinctive is a distinctive aspect, quality, or aspect, quality, or characteristic of a product characteristic of a product or service. or service.

5.1 Feasibility Analysis: Testing an Opportunity

C.C. A A benefitbenefit is something that is something that promotes or enhances the promotes or enhances the value of the product or value of the product or service to the customer.service to the customer.

5.1 Feasibility Analysis: Testing an Opportunity

5.1 Feasibility Analysis: Testing an Opportunity

III. WRITE A CONCEPT III. WRITE A CONCEPT STATEMENTSTATEMENTCompany XCompany X provides provides goods goods and/or servicesand/or services to to a specific a specific marketmarket. It provides . It provides these these benefitsbenefits..

5.1 Feasibility Analysis: Testing an Opportunity

IV. TESTING THE IV. TESTING THE CONCEPT IN MARKETCONCEPT IN MARKETA A feasibility analysisfeasibility analysis is used is used to determine if a business to determine if a business concept is practical. It concept is practical. It answers two questions.answers two questions.

5.1 Feasibility Analysis: Testing an Opportunity

A.A. Are there customers who Are there customers who want what you have to offer?want what you have to offer?

B.B. What conditions must be What conditions must be present for you to go forward present for you to go forward with your business?with your business?

5.1 Feasibility Analysis: Testing an Opportunity

V. TESTING PRODUCT OR V. TESTING PRODUCT OR SERVICE SERVICE REQUIREMENTS REQUIREMENTS

A.A. Information to gather Information to gather includes trends, barriers to includes trends, barriers to entry, and profit margins.entry, and profit margins.

5.1 Feasibility Analysis: Testing an Opportunity

B.B. Will the industry support Will the industry support your new business?your new business?

5.1 Feasibility Analysis: Testing an Opportunity

VI. TALKING TO VI. TALKING TO CUSTOMERSCUSTOMERSTarget customersTarget customers are those are those most likely to buy your most likely to buy your products and services.products and services.

5.1 Feasibility Analysis: Testing an Opportunity

VII. STUDYING THE VII. STUDYING THE COMPETITIONCOMPETITIONCreate a Create a competitive gridcompetitive grid to to organize important organize important information about your information about your competition.competition.

5.1 Feasibility Analysis: Testing an Opportunity

Competitive GridCompetitive Grid

5.1 Feasibility Analysis: Testing an Opportunity

VIII. THE COMPETITIVE VIII. THE COMPETITIVE GRIDGRIDA. A. The competitionThe competitionB.B. Customers CustomersC.C. Benefits Benefits D. D. DistributionDistribution E.E. Strength and weaknesses Strength and weaknesses

5.1 Feasibility Analysis: Testing an Opportunity

IX. LOOKING AT START IX. LOOKING AT START UP RESOURCES UP RESOURCES NEEDEDNEEDEDHow much money does it How much money does it take?take?

5.1 Feasibility Analysis: Testing an Opportunity

A.A. Purchase or lease equipment Purchase or lease equipment and a facility.and a facility.

B.B. Pay employees. Pay employees.C.C. Finish product development. Finish product development.D.D. Carry the company’s Carry the company’s

expenses until you have expenses until you have enough sales for the business enough sales for the business to operate on its own.to operate on its own.

5.1 Feasibility Analysis: Testing an Opportunity

End of Section 5.1End of Section 5.1