Feasibility Analysis-

1. Definition:
Feasibility analysis is a careful study conducted to determine if a business idea is practical, profitable, and
likely to succeed before significant resources are invested. Think of it as a “reality check” for entrepreneurs.

2. Purpose:

 To identify potential strengths and weaknesses in the business concept.

 To estimate whether the business can generate enough revenue to cover costs and make a profit.
 To reduce the risk of failure by uncovering problems early.
 To provide credible information for investors, lenders, and partners.

3. When It’s Done:

 Feasibility analysis is done before preparing a detailed business plan and before committing large
amounts of money or time.
 It’s an early-stage evaluation, helping entrepreneurs decide whether to pursue, modify, or abandon the
idea.

4. Key Areas Covered in Feasibility Analysis:

 Product/Service Feasibility: Is the product desirable and deliverable?

 Industry/Market Feasibility: Is the market attractive? Will customers buy it?
 Organizational Feasibility: Does the team have the skills, experience, and resources?
 Financial Feasibility: Can the business make money? Is it financially sustainable?

5. Benefits:

 Avoids wasting time, money, and effort on unworkable ideas.

 Provides a roadmap for improving or refining the business concept.
 Helps make informed decisions with realistic expectations.

In short: Feasibility analysis answers the question:

"Is this business idea worth pursuing, or will it fail before it even starts?"

Common Mistake Entrepreneurs Make

 Many entrepreneurs jump straight from an idea to a business plan without testing feasibility.
 This can be risky because they may overestimate the potential and ignore problems.
 Feasibility analysis ensures you think of your idea as a business, not just a concept

How Feasibility Analysis Works

 Investigative Process: Its main goal is to critically assess the idea, rather than to sell it.
 Testing the Idea: This includes:
1. Getting feedback from potential customers
2. Talking to industry experts
3. Conducting focus groups and surveys
4. Studying industry trends and financial viability
 Primary Research: Direct data you collect yourself (surveys, interviews, focus groups).
 Secondary Research: Existing data (industry reports, government data, online resources).
Why Feasibility Analysis Is Important

 Helps identify problems early, before investing too much money or effort.
 Gives you the opportunity to revise and improve the idea based on real feedback.
 Prevents creating a business plan that is overly optimistic or unrealistic.
 Ensures the entrepreneur sees both opportunities and risks clearly.

Difference Between Feasibility Analysis and Business Plan

 Feasibility Analysis: Investigative, critical, focused on testing the idea.

 Business Plan: Planning and selling, focused on presenting the idea to investors or partners.

Summary in Simple Words

Feasibility analysis = “Reality check for your business idea.”

 It helps you see if the idea can really work,

 Gives feedback for improving the idea,
 And prevents you from moving forward with a plan that may fail

When to Conduct a Feasibility Analysis-

1. Timing of Feasibility Analysis

 Early Evaluation:
The best time to conduct a feasibility analysis is at the very beginning of considering a new business
idea, before you spend significant resources like time, money, or effort.
 Purpose:
o To screen business ideas and identify which ones have real potential.
o To prevent entrepreneurs from investing heavily in ideas that may fail.
o To allow for modification or improvement of the idea based on early feedback.
 Why It Matters:
Many entrepreneurs make the mistake of jumping directly into writing a business plan or launching a
venture. Without feasibility analysis, they may overlook risks, market challenges, or financial issues,
leading to failure.

Think of it as a “reality check” for your idea before moving forward.

2. Components of a Properly Conducted Feasibility Analysis

A comprehensive feasibility analysis is not just one test, but involves four key areas, each focusing on a
different aspect of the business:

1. Product/Service Feasibility
o Checks whether the product or service is desirable, practical, and deliverable.
o Example questions: Will customers want this? Can it be produced efficiently?
2. Industry/Market Feasibility
 o Evaluates whether the industry and target market are attractive and have enough demand.
o Example questions: Is the industry growing? Is the market large enough? Who are the
competitors?
3. Organizational Feasibility
o Looks at whether the entrepreneur and team have the skills, knowledge, and resources
needed to launch and operate the business.
o Example questions: Do we have the right people? Are operational resources sufficient?
4. Financial Feasibility
o Determines whether the business can be profitable and financially sustainable.
o Example questions: How much start-up capital is required? Will the revenues cover costs? What
is the expected return on investment?

Summary

 Timing: Do feasibility analysis early, before investing heavily.

 Components: Product/service, industry/market, organization, and finance.
 Goal: Test the idea’s potential, identify risks, improve it if possible, or decide to drop it early.

Role of feasibility analysis in developing business ideas-

1. Starting Point: Proposed Business Venture

 Everything begins with a business idea or a proposed venture.

 Before investing significant time, effort, or money, the entrepreneur needs to test if the idea is worth
pursuing.
2. Spending Time and Resources

 The chart emphasizes that moving forward with a business requires time and resources.
 But whether it is worthwhile to invest depends on the results of the feasibility analysis.
 Essentially: “Should I invest more or not?”

3. Four Key Areas of Feasibility Analysis

1. Product/Service Feasibility
o Checks if the product or service is desirable, practical, and deliverable.
2. Industry/Target Market Feasibility
o Examines whether the market and industry are attractive, growing, and have demand.
3. Organizational Feasibility
o Assesses whether the entrepreneur and team have the skills, knowledge, and resources to run
the business.
4. Financial Feasibility
o Determines whether the business can be profitable and financially sustainable.

4. Decision Based on Results

 If the idea passes in all four areas:

o Decision → Yes in all four areas
o Action → Proceed with creating a full business plan
 If the idea fails in one or more areas:
o Decision → No in one or more areas
o Action → Drop or rethink the business idea

5. Key Takeaways / Role of Feasibility Analysis

1. Prevents wasting resources: Makes sure you don’t invest in an unviable business.
2. Tests business viability: Evaluates the idea across product, market, organization, and finances.
3. Guides decision-making: Helps decide whether to move forward, revise, or abandon the idea.
4. Shapes ideas: Provides feedback to improve or refine the business concept.
5. Separates investigation from planning: Feasibility analysis is about investigation, while the business
plan focuses on execution and selling the idea.

In simple terms:
Feasibility analysis acts as a filter — only ideas that pass all four critical checks move on to become fully
planned businesses.
Outline for a Comprehensive Feasibility Analysis-
Part 1: Product/Service Feasibility
A. Product/service desirability
B. Product/service demand

Part 2: Industry/Target Market Feasibility

A. Industry attractiveness
B. Target market attractiveness

Part 3: Organizational Feasibility

A. Management prowess
B. Resource sufficiency

Part 4: Financial Feasibility

A. Total start-up cash needed
B. Financial performance of similar businesses
C. Overall financial attractiveness of the proposed venture Overall Assessment

[Link]/service feasibility analysis-

Product/Service Feasibility Analysis is basically checking whether your product or service is worth bringing
to the market. Even if you have a great business plan, investment, or team, it won’t matter if people don’t want
to buy what you’re offering.

It has two main components:

1. Product/Service Desirability
2. Product/Service Demand

Product/Service Desirability-

1. Purpose

Before launching a product or service, you need to make sure it’s desirable—that is, it solves a real problem,
fills a gap in the market, or takes advantage of a trend. If people don’t want it, your business will struggle no
matter how good the plan or investment is.

Step 1:First, ask the following questions to determine the basic appeal of the product or
service.

To test desirability, you should ask yourself and potential customers questions like:
  Does the product make sense? Will real customers buy it?
 Does it solve a problem, fill a market gap, or leverage a trend?
 Is the timing right to launch it?
 Are there any obvious flaws in the idea or design?

The idea is to validate your assumptions with real feedback, not just rely on your gut feeling.

Step 2: Administer a Concept Test

After you’ve identified a potentially desirable product or service, the next step is to test the idea formally with
real people. This is done using a concept statement.

What is a Concept Statement?

 A concept statement is a one page description of a business, that is distributed to people who are
asked to provide feedback on the potential of the business idea.
 It’s designed to give people enough information to understand your product or service without
overwhelming them.
 The goal is to get feedback from potential customers or industry experts.

What a Concept Statement Includes

1. Description of the product/service – Key features, sketches, or rough models.

2. Target market – Who is expected to buy it.
3. Benefits – How it solves a problem or adds value.
4. Competitive position – How it differs from other options in the market.
5. Company team – Brief info about the management or creators.

Purpose of the Concept Test

When you share the concept statement with people:

 You gain a sense of whether the idea is viable—will people really want it?
 You receive suggestions to improve or tweak the idea before investing time and money in
development.

Think of it as a practice round—you refine the idea based on real-world feedback before launching.

Key Takeaways

 It’s a low-cost, low-risk way to test your product/service concept.

 The feedback helps you strengthen the idea and improve your chances of success.
 Use honest, informed opinions from prospective customers, not friends or family.

Getting Customer Feedback

The best way to test desirability is to “get out of the building” and talk to real people—your potential
customers.

Methods include:

 Interviews – Ask customers about their needs and preferences.

 Focus groups – Discuss your idea with a group of target users.
These interactions are at the heart of the Lean Startup approach, which emphasizes learning directly from
customers before building the full product.

Iterative Improvement

Feedback is used to tweak the idea repeatedly until you reach a product/market fit—meaning your product
meets real customer needs.

 Ask a group, adjust your idea, test with another group, repeat.
 Tools like online forums (e.g., Growth Hackers) or 3D printing services (like Shapeways) can help test
and refine ideas quickly.

✅ Key Takeaways

 Desirability is about confirming that your product solves a problem, fits a trend, and appeals to real
customers.
 Direct feedback from potential customers is essential—you can’t rely only on your assumptions or
secondary research.
 Concept tests are a structured, efficient way to validate your idea and refine it iteratively.
 The goal is product/market fit: “Have I built something people actually want?”

Product/Service Demand-

Step 1: Administer a Buying Intentions Survey

A buying intention survey is a type of market research tool used to measure how likely customers are to
purchase a particular product or service in the future

Purpose:
To measure customer interest and see if they would actually buy the product or service.

How it works:

 You create a short survey that includes a concept statement (a brief description of your
product/service).
 The survey asks questions like:
o How likely are you to buy this product?
o How often would you use it?
o What features are most important to you?
o What price would you be willing to pay?
 Tools like SurveyMonkey, Google Forms, or Typeform make it easy and affordable to reach potential
customers online.

Why it’s useful:

 Gives direct feedback from your target market.

 Helps you estimate potential sales before investing heavily.
 Identifies what people value most about your product so you can improve it.

Step 2: Conduct Library, Internet, and Gumshoe Research

Purpose:
To gather secondary data and confirm market demand using existing resources.

How it works:

1. Library research – Use books, trade journals, and industry reports to understand market size, trends,
and competitors.
2. Internet research – Search for statistics, competitor products, consumer reviews, and market trends.
3. Gumshoe research – This is informal, on-the-ground investigation.
o Talk to store owners, suppliers, or customers.
o Observe similar businesses in your area to see what sells.

Gumshoe research refers to a type of investigative, on-the-ground research where a person digs for
information by going out, observing, interviewing, or directly engaging with sources—rather than relying only
on published reports, databases, or secondary data.

In a business or academic context, gumshoe research means:

 Talking directly with potential customers, suppliers, or distributors.

 Visiting locations, shops, or competitors to observe firsthand.
 Attending events, fairs, or exhibitions to collect insights.
 Asking people questions in informal settings (cafés, offices, street corners).

👉 Example: If you are thinking of opening a coffee shop, gumshoe research might involve walking around
neighborhoods, observing foot traffic, talking to local shop owners, or casually asking students and workers
where they usually buy coffee

Why it’s useful:

 Gives a broader picture of market demand.

 Helps you verify that a large enough market exists for your product.
 Reduces the risk of launching a product with too few buyers.

Key Takeaways

 Demand testing is essential—a product may be desirable but fail if people don’t buy it.
 Buying Intentions Surveys provide direct feedback from potential customers.
 Library, Internet, and Gumshoe research confirm the broader market potential.
 Combining both steps gives a reliable picture of whether the product can succeed in the market.

2. Industry/Target Market Feasibility Analysis-

This is about checking whether the industry and target market for your product or service are attractive and
promising for your business.

Difference Between Industry and Target Market

 Industry:
o A broad category of businesses producing similar products or services.
o Examples: computers, children’s toys, airplanes, social networks.
o It shows the overall environment where your business will operate.
 Target Market:
 o The specific group of customers within that industry that your business aims to serve.
o Firms usually don’t serve the whole industry, especially startups—they focus on a niche or
segment.
o This allows them to meet the needs of that group better than competitors.

Example:

 Industry: Children’s toys

 Target Market: Parents willing to pay a premium for educational coding toys for their kids (like
Wonder Workshop).

The key idea: You assess whether the industry is strong enough to support new businesses and whether your
specific target market is large, reachable, and profitable.

Why It Matters

1. Industry Feasibility:
o Helps you understand trends, growth potential, competition, and overall attractiveness.
2. Target Market Feasibility:
o Ensures that your selected customers exist, are willing to pay, and are reachable.
o Helps you focus your marketing and product development on the right audience.

In short:

 Industry: Where you play.

 Target Market: Who you play for.
 Success comes from choosing an industry with potential and a target market that you can serve really
well.

The two components of industry/target market feasibility analysis :

1. Industry Attractiveness

Definition:
Industry attractiveness measures whether an industry provides favorable opportunities for new businesses to
enter and thrive.

This is about evaluating whether the industry as a whole is a good environment for a new business.

Characteristics of Attractive Industries-

■Are young rather than old

■Are early rather than late in their life cycle Shuttle (Women-Only Ride-Sharing Service), Lab grown meat

■Are fragmented rather than concentrated

■Are growing rather than shrinking

■Are selling products or services that customers “must have” rather than “want to have”

■Are not crowded

■Have high rather than low operating margins

■Are not highly dependent on the historically low price of a key raw material, like gasoline or flour, to remain profitable

Key factors that make an industry attractive for startups:

1. Age and life cycle

o Young industries or industries early in their life cycle are usually more open to new entrants.
o Older, saturated industries are harder to break into unless you’re innovating.
2. Market structure
o Fragmented industries (many small competitors) are easier for new businesses to enter.
o Concentrated industries (dominated by a few big players) have high barriers to entry.
3. Trends and growth
o Industries growing due to economic, social, or technological trends are more promising.
o Consider profit margins, input costs, innovation, and whether new markets are emerging.
4. Structural attractiveness
o Low barriers to entry and opportunities for startups to compete effectively.

Exceptions:

 Even older industries can be attractive if they haven’t seen much innovation. Examples:
o Warby Parker disrupted eyewear
o Uber disrupted personal transportation

Sources of industry information:

 Industry reports from IBISWorld, Mintel, BizMiner

 University libraries and online resources

2. Target Market Attractiveness

While industry attractiveness looks at the big picture, target market attractiveness focuses on the specific
group of customers your business plans to serve.

Key points:

1. Focus on a segment
o Startups usually can’t serve the entire industry.
o By focusing on a smaller, well-defined target market, startups can compete more effectively and
avoid head-to-head battles with industry leaders.
2. Introducing products strategically
o Most successful startups either:
 Introduce a new product into an existing market (e.g., Wonder Workshop with
educational toys)
 Introduce a new market for an existing product (e.g., Etrainer offering online fitness
classes)
3. Size of target market
o Should be large enough to generate sufficient revenue.
o Should be small enough to avoid attracting big competitors early on.

4. Assessing target market demand

 o Sometimes you need to combine data from multiple markets.
o Example: For snowboard sunglasses, assess both the sunglasses market and the snowboarding
market.
o If one market is declining (e.g., snowboarding accessories) even if sunglasses are selling well,
the target market is less attractive.

Summary

 Industry attractiveness = Is the overall industry a good place to start a business?

o Look at growth, structure, trends, barriers to entry, and innovation opportunities.
 Target market attractiveness = Is your specific customer segment worth pursuing?
o Look at size, accessibility, growth, and ability to compete without being crushed by large
competitors.

Both components are crucial: A great target market in a declining industry may not succeed, and a booming
industry with a poorly chosen target market can also fail.

[Link] feasibility-
Conducted to determine whether a proposed business has sufficient management expertise, organizational
competence, and resources to successfully launch a business.

• Focuses on non-financial resources.

Organizational feasibility is about checking if the business has what it takes internally to succeed. Unlike
financial feasibility, which looks at money, organizational feasibility focuses on people, skills, and resources.

Purpose

The goal is to make sure the business can actually operate effectively once the idea is launched. Even a great
product or service can fail if the team isn’t prepared or the organization isn’t structured well.

Key Focus Areas

1. Management Expertise
o Does the team have the right knowledge, experience, and skills to run the business?
o Example: A tech startup needs software developers; a restaurant needs experienced chefs and
managers.
2. Organizational Competence
o Can the team coordinate and execute tasks efficiently?
o Are roles and responsibilities clearly defined?
o Does the team have experience in similar operations or projects?
3. Resources
o Non-financial resources that support the business, such as:
 Equipment or technology
 Facilities or office space
 Supplier networks or partnerships
 Access to talent or skilled staff

Why It’s Important

 Ensures that the business can deliver the product/service effectively.

  Reduces the risk of failure due to poor management or weak organization.
 Complements product/service, industry, and financial feasibility analysis.

Summary

Organizational feasibility answers questions like:

 Do we have the right people to make this work?

 Can the team manage operations and resources efficiently?
 Are non-financial resources available to support growth and delivery?

In short: even if the idea is great and the market is attractive, without strong management and organizational
capability, a business is unlikely to succeed.

Components of organizational feasibility analysis-

[Link] Prowess-

Management prowess refers to the ability and strength of the management team or entrepreneur to
successfully run the business.

Key Components:

1. Passion and Commitment

o How much enthusiasm and dedication does the founder/team have for the idea?
o Passion is critical—it drives perseverance during challenges.
2. Market Understanding
o Does the team understand the market and industry they’re entering?
o Knowledge of customers, competitors, and trends is essential.
3. Professional and Social Networks
o Connections can help fill gaps in experience or knowledge.
o Access to mentors, advisors, and industry contacts strengthens the team.
4. New-Venture Team
o This includes founders, key employees, and advisors who will help manage the business during
the start-up phase.
o If the team can attract highly capable individuals or advisors, it increases credibility.
5. Potential Partnerships
o Sometimes solo entrepreneurs benefit from finding partners who complement their skills.
o Partners or mentors can provide experience, guidance, and industry know-how.

Why Management Prowess Matters

 Even with a strong product, market, and resources, poor management can cause failure.
 Investors and stakeholders often look first at the team’s capabilities before funding a venture.
 Strong management increases confidence that the business can handle challenges and scale successfully.

2. Resource Sufficiency-
Definition:
Resource sufficiency is about evaluating whether a business has—or can obtain—the non-financial resources
needed to launch and operate successfully.

Non-financial resources are critical for startup operations and include things like skilled employees, technology
intellectual property, and regulatory approvals.,

Steps to Assess Resource Sufficiency

1. Identify Critical Non-Financial Resources

o List 6 to 12 resources essential to move the business forward.
o Examples:
 Skilled employees
 Specialized equipment
 Intellectual property (patents, trademarks)
 Supplier networks
 Regulatory approvals or licenses
2. Assess Availability
o Determine whether these resources are available locally or can be obtained.
o Example:
 If you need software developers but the local labor pool lacks skilled candidates, this is a
resource sufficiency problem.
3. Intellectual Property (IP)
o If your product or business process is innovative, check if it can be protected.
o Tools to assess IP:
 Patents: Google Patents (search if someone already filed a patent)
 Trademarks: Trademarkia
o This helps ensure your idea isn’t already legally claimed and adds competitive advantage.
4. Regulatory Considerations
o Some businesses need legal approvals or licenses.
o Example: Uber cannot operate in some cities due to local regulations.

Examples of nonfinancial resources that may be critical to the successful launch of a new
business-

• Availability of affordable office or lab space.

• Likelihood of local and state government support of the business.

• Quality of the labor pool available.

• Proximity to key suppliers and customers.

• Willingness of high quality employees to join the firm.

• Likelihood of establishing favorable strategic partnerships.

• Proximity to similar firms for the purpose of sharing knowledge.

• Possibility of obtaining intellectual property protection in key areas.

Why Resource Sufficiency Matters

 Even if you have a great team and market, lack of critical resources can make launching impossible.
 Ensuring resource sufficiency reduces risk and increases the chance of startup success.
  Early assessment helps identify gaps so the entrepreneur can plan to fill them before launching.

Summary

Organizational feasibility consists of:

1. Management Prowess: Does the team have the right skills, passion, knowledge, and networks?
2. Resource Sufficiency: Does the business have access to critical non-financial resources like talent, IP,
equipment, and regulatory approvals?

[Link] feasibility-
Definition:
Financial feasibility analysis is the process of assessing whether a proposed business is financially viable—i.e.,
whether it can generate enough revenue to cover costs and sustain itself. It is the final step in a comprehensive
feasibility study.

Purpose

1. Final Component of Feasibility Analysis

o Confirms that the business idea is financially possible before investing significant resources.
2. Preliminary Assessment is Usually Enough Early On
o At this stage, detailed financial forecasts are not necessary.
o The business specifics will evolve, so only a rough estimate is required.

Key Issues to Consider

1. Total Start-Up Cash Needed

o Estimate how much money is needed to launch the business.
o Includes: equipment, licenses, rent, initial inventory, marketing, and working capital.
2. Financial Performance of Similar Businesses
o Look at how similar businesses perform financially.
o Provides benchmarks for revenue, costs, profit margins, and growth potential.
3. Overall Financial Attractiveness
o Does the business offer enough potential profit to make it worthwhile?
o Are returns sufficient compared to risks and investment?

Next Steps if the Venture Moves Forward

 If the business passes the preliminary feasibility stage, the entrepreneur must prepare pro forma
financial statements:
o Projected income statement
o Projected balance sheet
o Projected cash flow statement
 These statements typically cover the first 1–3 years and show financial viability in detail.

Summary

 Financial feasibility analysis ensures the business is practically fundable.

 Early analysis focuses on rough estimates of start-up cash needs, performance benchmarks, and profit
potential.
 Detailed projections are prepared later, once the business idea is validated and ready to move forward.
Components of financial feasibility analysis-

[Link] Start-Up Cash Needed

Definition:
This refers to the total amount of money required to prepare a business to make its first sale. It’s the initial
investment needed to get the venture operational.

Key Points

1. Prepare an Actual Budget

o List all capital purchases (long-term assets like equipment, machinery, furniture).
o List all operating expenses (short-term costs like rent, salaries, marketing, raw materials).
o Include everything needed to generate the first $1 of revenue.
2. Purpose
o Determines whether the business is financially realistic.
o Helps the entrepreneur know how much funding is needed before starting.
o Avoids surprises from underestimating costs.
3. Example:
o A small coffee shop might need:
 Equipment: $5,000 (coffee machines, grinders)
 Rent & utilities: $2,000
 Initial inventory: $1,000
 Marketing: $500
 Salaries: $2,500
 Total start-up cash needed: $11,000

Why It Matters

 If the required start-up cash is too high relative to resources or potential returns, the venture might
not be feasible.
 Helps plan funding sources (savings, loans, investors).

In short: calculating total start-up cash ensures the business has enough money to launch successfully and
reach its first sale.

[Link] Performance of Similar Businesses-

Definition:
This step involves estimating the potential financial performance of a start-up by looking at how similar,
already established businesses perform. It helps determine whether the new venture can be profitable and
realistic.

Key Approaches

1. Industry Reports
o Many reports provide detailed financial data and trends for specific industries or companies.
o Some reports are free (like government or trade association publications), while others require a
fee (like IBISWorld or BizMiner).
o These reports give benchmarks for:
 Revenue
 Profit margins
 Growth trends
 Costs and expenses
2. Observational Research
o Simple, hands-on research can also provide insights.
o Example:
 New Venture Fitness Drinks wants to estimate sales.
 They observe similar smoothie/fitness drink restaurants:
 Count the number of customers per day
 Estimate average spending per customer
 Multiply to get approximate daily or monthly revenue
3. Ethical Detective Work
o The idea is to gather information ethically from available sources to make informed financial
estimates.
o Helps validate assumptions about revenue, costs, and market potential.

Why It Matters

 Provides realistic benchmarks instead of relying on guesswork.

 Helps assess potential profitability and plan for financial sustainability.
 Reduces risk of overestimating sales or underestimating costs.

In short: analyzing similar businesses helps a start-up understand what financial performance is
reasonable and whether the venture is likely to succeed.

[Link] Financial Attractiveness-

Definition:
This step evaluates whether the business opportunity is financially appealing compared to other potential
investments. It looks at several factors to judge if the venture is likely to generate satisfactory returns.

Key Points

1. Estimates at the Feasibility Stage

o At this early stage, all figures are approximations, not exact numbers.
o The goal is to get a sense of financial potential rather than precise projections.
2. Factors to Consider
While the table isn’t provided here, typical factors include:
o Profit potential: Expected profit margins and return on investment (ROI)
o Revenue growth: How quickly the business could grow
o Break-even point: How long it takes to cover initial investment
o Capital efficiency: How well the start-up uses its resources
o Risk vs. reward: Level of financial risk compared to expected gains
3. Purpose
o Helps entrepreneurs decide whether the venture is worth pursuing financially.
o Acts as a final reality check before committing time and resources.

Why It Matters

 Even with a solid product, market, and team, a business may not be financially attractive.
 Early assessment allows entrepreneurs to refine or abandon ideas before incurring significant costs.
 It provides a benchmark for future detailed financial planning.
In short: overall financial attractiveness tells you if the business opportunity is likely to generate sufficient
returns and if it’s financially worth pursuing.

Feasibility Analysis Template: First Screen

Definition:
The First Screen is a template used by entrepreneurs to conduct an initial feasibility analysis of a business
idea. It helps determine whether a business concept is worth pursuing before investing significant time and
resources into a full business plan.

It is called “First Screen” because it is the entrepreneur’s first pass at screening a business idea for potential
success.

Structure and Mechanics

1. Four Areas of Feasibility

The template maps out the four key areas of feasibility analysis:
o Product/Service Feasibility – Is the product/service desirable and in demand?
o Industry/Target Market Feasibility – Is the industry attractive, and is the target market
promising?
o Organizational Feasibility – Does the business have the management team and non-financial
resources needed?
o Financial Feasibility – Can the business meet its start-up cash needs, generate profit, and be
financially attractive?
2. Overall Potential Section
o Provides space for suggestions to improve feasibility.
o Example:
 Original plan: Manufacture a product in-house.
 Problem: High capital requirements and long time to break even.
 Suggestion: Consider contract manufacturing or outsourcing.
 Result: Improves ratings for capital investment and time to break even.
3. Rating System
o Each factor is rated for potential (e.g., high, medium, low).
o Encourages founders to identify weak points and think of alternatives.

Why First Screen is Important for Entrepreneurs

1. Quick Assessment
o Provides a structured, concise way to evaluate a business idea.
o Saves time before committing to a full business plan.
2. Focus on Fact-Based Analysis
o Encourages research and analysis instead of guessing or speculation.
o Uses available resources, data, and industry benchmarks.
3. Identifies Strengths and Weaknesses
o Highlights areas needing improvement or alternative strategies.
o Helps entrepreneurs refine their idea before launch.
4. Supports Decision-Making
o Provides an overall impression of feasibility.
o Helps decide whether to proceed, pivot, or abandon the idea.
5. Encourages Honesty
 o Forces candid evaluation—no business scores “high potential” on every item.

Summary

 First Screen is a practical, structured tool that maps all areas of feasibility.
 It allows entrepreneurs to assess, refine, and improve their business idea before investing heavily.
 By completing it honestly and using data, entrepreneurs gain a clear sense of whether the business is
viable and identify ways to increase its potential.