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![Page 1: Teaching the Business Model & Feasibility Analysis: Precursors to the Business Plan Dianne H.B. Welsh, Ph.D. Steve Cramer, M.S. University of North Carolina.](https://reader035.fdocuments.in/reader035/viewer/2022062519/5697bff01a28abf838cba5d9/html5/thumbnails/1.jpg)
Teaching the Business Model & Feasibility Analysis: Precursors
to the Business Plan
Dianne H.B. Welsh, Ph.D.
Steve Cramer, M.S.
University of North Carolina at Greensboro
![Page 2: Teaching the Business Model & Feasibility Analysis: Precursors to the Business Plan Dianne H.B. Welsh, Ph.D. Steve Cramer, M.S. University of North Carolina.](https://reader035.fdocuments.in/reader035/viewer/2022062519/5697bff01a28abf838cba5d9/html5/thumbnails/2.jpg)
• Part 1: Introduction to the Business Model and Feasibility Analysis (Dianne)
• Part 2: Core strategies and sources for the market, industry, competitive, and financial research of feasibility analysis (Steve)
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Part 1: What is a Business Model?
• A business model is a simplified analysis or a detailed outline that shows the different major aspects of a proposed business that work together.
• Beginning step or simpler step than a Feasibility Analysis.
• Allows to bring the business idea together in one place with details so the entrepreneur can think it through (Welsh)
![Page 4: Teaching the Business Model & Feasibility Analysis: Precursors to the Business Plan Dianne H.B. Welsh, Ph.D. Steve Cramer, M.S. University of North Carolina.](https://reader035.fdocuments.in/reader035/viewer/2022062519/5697bff01a28abf838cba5d9/html5/thumbnails/4.jpg)
Part 1: What Is a Feasibility Analysis?
• Feasibility analysis is the process of determining whether a business idea is viable.
• It is the preliminary evaluation of a business idea, conducted for the purpose of determining whether the idea is worth pursuing.
Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall Barringer & Ireland, Entrepreneurship: Successfully Launching New
Ventures (4th ed.)
3-4
![Page 5: Teaching the Business Model & Feasibility Analysis: Precursors to the Business Plan Dianne H.B. Welsh, Ph.D. Steve Cramer, M.S. University of North Carolina.](https://reader035.fdocuments.in/reader035/viewer/2022062519/5697bff01a28abf838cba5d9/html5/thumbnails/5.jpg)
Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall Barringer & Ireland, Entrepreneurship: Successfully Launching New
Ventures (4th ed.)
Feasibility Analysis Process
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Business Model Format
You are presenting to a group of your peers. Each of you has the same objective:
1. You are preparing to make a pitch to a major group of investors.
2. Your intention is to persuade the group of investors that you have a great business idea that they MUST invest in.
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3. You will have 10 - 12 minutes to explain the business concept & use the Business Model as part of the presentation.
a. What is the business?
b. Who are the customers?
c. Why will your business succeed? What is your Competitive Advantage?
d. Where will it work? Describe the demographics of your proposed location(s).
e. Demonstrate the ROI for the investors. When can they expect to receive the return on their investment?
4. Be well organized (you have plenty of time) & you MUST be PROFESSIONAL in you delivery.
Upon completion of your presentation you will answer pertinent questions and accept constructive criticism.
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Business Model Format - Continued
The body of the plan must not exceed 3 pages. This does not include financials or other appendices-no be more than 2 additional pages.
I. Business Overview
•Describe your idea and business model: Who does what with whom how; who pays for it?
• Financial value proposition: Why is this great idea from a monetary standpoint-for the people investing in the service or product; consumers?
• Value proposition: What is your niche? Who are you selling to and why are they buying your product of service?
• Vision: What is the ultimate objective of your plan?
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II. The Market• Customer Identification: who’s paying for good or service; e.g.
private consumer.• Market size, analysis and forecast: What is the need? • Industry analysis and forecast: Who else is delivering this service
already? What is the outlook on this type of activity? SWOT analysis.
• Your competitive advantage: What makes your business the best qualified/positioned to deliver the good or service you are proposing?
III. Financial Analysis• Funding sources: Where will the money actually come from for the
activity? What funding already exists or is committed?• Budget with detailed projections through Year 1.• Discuss assumptions and capital requirements. IV. Funding/next steps•How much funding/time does your plan require to get off the
ground?
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Outline for a Comprehensive Feasibility Analysis
Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall Barringer & Ireland, Entrepreneurship: Successfully Launching New
Ventures (4th ed.)
3-10
![Page 11: Teaching the Business Model & Feasibility Analysis: Precursors to the Business Plan Dianne H.B. Welsh, Ph.D. Steve Cramer, M.S. University of North Carolina.](https://reader035.fdocuments.in/reader035/viewer/2022062519/5697bff01a28abf838cba5d9/html5/thumbnails/11.jpg)
Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall Barringer & Ireland, Entrepreneurship: Successfully Launching New
Ventures (4th ed.)
• Product/Service Demand
There are two steps to assessing product/service
demand.
– Step 1: Administer a Buying Intentions Survey– Step 2: Conduct Library, Internet, and Gumshoe
research
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Fasttrac-Kauffman Foundation
Summary
– Venture description– Product/service– Market– Start-up costs– Price & profitability
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• Product/Service
– Purpose of the Product/Service– Stage of Development– Product/Service Limitations– Proprietary Rights– Governmental Approvals– Product/Service Liability– Related Products/Services and Spin-Offs– Production
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• The Market
– Current Industry Size– Growth Potential of the Industry– Industry Trends– Competition Profile– Customer Profile– Customer Benefits– Target Markets– Market Penetration
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• Price & Profitability
– Price List– Sales Estimate– Cost of Product/Service– Gross Margin– Financial Projections
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Plan for further action
• Needed Capital• Entrepreneur’s Role• Business Plan• License Potential• Corporate Partners• Proprietary Rights• Infrastructure Members
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References
• Carraher, S.M., & Welsh, D.H.B. (2014). Global Entrepreneurship (2nd ed.). Des Moines, IA: Kendall Hunt Publishing.
• Welsh, D.H.B. (2014). Cross-Disciplinary Entrepreneurship: A Practical Guide for a Campus Wide Program. New York: Palgrave MacMillan.
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Part 2: the Research
1. Introduction2. Industries3. Markets 4. Competitors5. Financials6. Concluding case study
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1. Introduction
Goals:• What kinds of research students should be
including• Core research concepts and strategies• Free authoritative resources v.
subscription databases • See http://uncg.libguides.com/coleman for
details and links.
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2. Industries continued
• Sectors v. NAICS-level• Example:
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2. Industries continued:What do we need to know
about our industry?
Current Performance
OutlookLife-cycle statusLevel of
competitionMajor playersCost structure
benchmarks
Supply chainKey external
drivers & success factors
Product/service shares
Barriers to entryLevel of regulation
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3. Markets
• B2B v. consumer• How can we segment a consumer
market?– Let’s make a list…
https://www.flickr.com/photos/yourdon/5330125572/ (CC)
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3. Markets continued
• How can we segment a consumer market?– Demographics (Census +)– Spending (BLS +)– Psychographics (proprietary sources)
• Important concepts:– Households v. families– Latino/Hispanic– Decennial Census v. American Community
Survey
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4. Competitors
• Who, where, how much, hold old?• Direct v. indirect (example)• Database searching using NAICS &
location• Primary research needed
too
https://www.flickr.com/photos/jhecking/2842429147/ (CC)
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5. Financials
• Benchmarking for the income statement & balance sheet
• Profit margins (gross, operating, net)
o Usually based on industry averages (NAICS-level, ideally)
o Much primary research for the financial section needed too – most challenging type of research
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6. Case study (final exercise)
• Sketch a business model and feasibility idea relevant for the students in their academic backgrounds.
• We will ask a few folks to share their ideas