Two of the most important factors in this area are

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Unformatted text preview: t management expertise, social networks, organizational competence, and resources to successfully launch a business. •  Focuses on non-financial (and intangible) resources. 11 9/25/13 Organizational Feasibility Analysis (continued) Components of organizational feasibility analysis Management Prowess Resource Sufficiency Management Prowess •  Evaluate the prowess, or ability, of its management team to satisfy itself that management has the requisite passion, expertise, and social network to launch the venture. •  Two of the most important factors in this area are: •  The passion that the sole entrepreneur or the founding team has for the business idea. •  The extent to which the sole entrepreneur or the founding team understands the markets in which the firm will participate. 12 9/25/13 Resource Sufficiency •  Does the proposed venture have sufficient resources to launch? •  List the 6 to 12 most critical nonfinancial resources that will be needed to move the business idea forward successfully. •  If not available, it may be impractical to proceed Financial Feasibility Analysis Purpose Financial Feasibility Analysis •  Is the final component of a comprehensive feasibility analysis. •  A preliminary financial assessment is sufficient. 13 9/25/13 Financial Feasibility Analysis (continued) Components of financial feasibility analysis Total Start- Up Cash Needed Financial Performance of Similar Businesses Overall Financial ANrac<veness of the Proposed Venture Total Start-Up Cash Needed •  What is the total cash needed to prepare the business to make its first sale? •  Prepare an actual budget: lists all the anticipated capital purchases and operating expenses needed to generate the first $1 in revenues – •  The point is to determine if the proposed venture is realistic given the total start-up cash needed. 14 9/25/13 Financial Performance of Similar Businesses •  Estimate the proposed venture’s financial performance by comparing it...
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This document was uploaded on 02/03/2014.

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