Assessing Business Ideas

Overview

Before starting a business, it is important to have a business plan

Business Plan A document that describes the

objectives of a business and summarizes the strategies and resources needed to achieve the objectives

Also known as a venture plan

Criteria

A business plan must consider the following:FeasibilityMarketabilityProfitability

Feasibility

Will the idea work? Must consider:

Financing Location of business Licences and permits Suppliers Staff

Financing

Must consider the financial needs of the business

Usually accomplished by completing a budget

Outline: The amount needed The source(s) of the financing

Term, interest rate, amount, etc.

Location

Helpful to explain why you chose the location you did

Include details such as: Address Rent Taxes Utilities

Licences and Permits

Different types of businesses require different permits e.g. if you’re selling something, you

require a Vendor’s Permit Should include a description of

where, when and how you plan to obtain your permits

Suppliers

Must know your needs in advance Should list:

Each item The name of the supplier The price of each item and The terms of the purchase

Staff

It is helpful to describe your staffing needs

Must list: Title of positions to be filled Job descriptions How you plan to recruit for the roles

Marketability

Must ensure there is a market for your product or service

Must assess: The target market Competition Price of the product or service Identify the characteristics that make

your product or service unique

Profitability

Must be able to identify all costs associated with the venture

Ensure that revenue is greater than costs

Helpful to produce an Income Statement to show that the business is planning to generate a profit