BEN2014 Introduction to Cyberpreneurship (by: TPL)

Original Source: Zimmerer & Scarborough (Pearson)

Lecture 3: Business Plan

Overview

1. Feasibility Study
- Industry and Market Feasibility Analysis
- Product or Service Feasibility Analysis
- Financial Feasibility Analysis

2. The Business Plan

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BEN2014 Introduction to Cyberpreneurship (by: TPL)
Original Source: Zimmerer & Scarborough (Pearson)

Feasibility Study Pg 123-137

• Not the same as a business plan.

• Serves as a filter, screening out ideas that
lack the potential for building a successful
business before an entrepreneur commits
the necessary resources to building a
business plan.
• An investigative tool.

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BEN2014 Introduction to Cyberpreneurship (by: TPL)
Original Source: Zimmerer & Scarborough (Pearson)

Elements of a Feasibility Analysis Pg 123-137

Industry and Product or Service

Market Feasibility Feasibility

Financial
Feasibility

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BEN2014 Introduction to Cyberpreneurship (by: TPL)
Original Source: Zimmerer & Scarborough (Pearson)

Industry and Market Feasibility Analysis Pg 123-137

Two areas of focus:

1. Determining how attractive an industry is
overall as a “home” for a new business.
2. Identifying possible niches a small
business can occupy profitably.
See: Five Forces Model

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BEN2014 Introduction to Cyberpreneurship (by: TPL)
Original Source: Zimmerer & Scarborough (Pearson)

Product or Service Feasibility Analysis Pg 123-137

• Determines the degree to which a product or

service idea appeals to potential customers and
identifies the resources necessary to produce it.
• Two questions:
– Are customers willing to purchase our good or
service?
– Can we provide the product or service to
customers at a profit?
e.g. Primary research, secondary research

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BEN2014 Introduction to Cyberpreneurship (by: TPL)
Original Source: Zimmerer & Scarborough (Pearson)

Financial Feasibility Analysis Pg 123-137

• Capital requirements – must have an estimate of

how much start-up capital is required to launch
the business.
• Estimated earnings – forecasted income
statements.
• Return on investment – combining the previous
two estimates to determine how much investors
can expect their investments to return.

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BEN2014 Introduction to Cyberpreneurship (by: TPL)
Original Source: Zimmerer & Scarborough (Pearson)

The Business Plan Pg 137-150

• A written summary of:

– an entrepreneur’s proposed business venture
– its operational and financial details
– its marketing opportunities and strategy
– its managers’ skills and abilities.
• Best insurance against launching a business
destined to fail or mismanaging a potentially
successful company.

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BEN2014 Introduction to Cyberpreneurship (by: TPL)
Original Source: Zimmerer & Scarborough (Pearson)

The Business Plan: Three Essential Functions Pg 137-150

1. Guiding the company by charting its future

course and defining its strategy for following it.
2. Attracting lenders and investors who will provide
needed capital.
3. Demonstrating that the entrepreneur
understands the business venture and what will
make it succeed.

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BEN2014 Introduction to Cyberpreneurship (by: TPL)
Original Source: Zimmerer & Scarborough (Pearson)

Key Elements of a Business Plan Pg 137-150

• Title Page and Table of Contents

• Executive Summary
• Mission Statement
• Company History
• Business and Industry Profile
• Business Strategy
• Description of Products/Services

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BEN2014 Introduction to Cyberpreneurship (by: TPL)
Original Source: Zimmerer & Scarborough (Pearson)

Key Elements of a Business Plan Pg 137-150

• Marketing Strategy
• Competitor Analysis
• Description of Management Team
• Plan of Operation
• Forecasted Financial Statements
• Loan or Investment Proposal

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BEN2014 Introduction to Cyberpreneurship (by: TPL)
Original Source: Zimmerer & Scarborough (Pearson)

Tips on Preparing a Business Plan Pg 137-150

• Make sure your plan has an attractive cover.

(First impressions are crucial.)
• Rid your plan of all spelling and grammatical
errors.
• Make your plan visually appealing.
• Include a table of contents to allow readers to
navigate your plan easily.
• Make it interesting.

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BEN2014 Introduction to Cyberpreneurship (by: TPL)
Original Source: Zimmerer & Scarborough (Pearson)

Tips on Preparing a Business Plan Pg 137-150

• Your plan must prove that the business will

make money (not necessarily immediately, but
eventually).
• Use spreadsheets to generate financial
forecasts.
• Always include cash flow projections.
• Keep your plan “crisp” – between 25 and 50
pages long.
• Tell the truth – always.
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