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Unformatted text preview: to similar, already established businesses.
• There are several ways to doing this, all of which involve a
little ethical detective work.
– Available reports offering detailed industry trend analysis and reports
on thousands of individual firms.
• Hoover’s – Simple observational research
• For example, the owners of New Venture Fitness Drinks could estimate their sales
by tracking the number of people who patronize similar restaurants and estimating
the average amount each customer spends. Overall Financial Attractiveness of the Proposed
• A number of other financial factors are associated with promising
– Steady and rapid growth in sales during the first 5 to 7 years in a clearly
defined market niche
– High percentage of recurring revenue—meaning that once a firm wins a
client, the client will provide recurring sources of revenue
– Ability to forecast income and expenses with a reasonable degree of
– Internally generated funds to finance and sustain growth
– Availability of an exit opportunity for investors to convert equity to cash • In the feasibility analysis stage, the extent to which a business
opportunity is positive relativ...
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