Chapter Three

The process of Business Development

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 3.3.2 Elements in Evaluating New Ventures

 Market opportunity: companies must be equity

based, and addressed market must be large
enough to justify the millions of investment
dollars
 Industry Trends & Regulatory Matters: need to find
established partners that are early adopters to
validate a product and endorse it
 Proprietary approach :is the intellectual property
stand alone or platform IP
 Can one or more products addressing major
markets be created from the IP ?
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,...continued

 Are there sufficient barriers to entry for competitors?

 is the technology sufficiently protected?
 Development risk:
 what is the stage of development for the technology?
 Can the risks be clearly identified and mitigated?
 Who – a new venture or an established venture – is most
committed to and most likely to bring the innovation to
market?
 Technology impact: what is the nature and outgrowth of
the technology
 Proposed products: do the proposed products have a clear
market need?
 SWOT analysis
 other elements also (see from hand out!!!!)
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Guidelines of Business Feasibility Study
 1. Description of the Business
 Outline the general business model (i.e. how the business will
make money).
 List the type and quality of product(s) or service(s) to be
marketed
 Include the technical processes, size, location, kind of inputs
 Specify the time horizon from the time the project is initiated
until it is up and running at capacity.
 Identify economic and social impact on local communities.
 Identify environmental impact on the surrounding area.

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,..guidelines...
2. Market Feasibility (can be based on a
marketing assessment)
 Enterprise description: size, scope ,.etc
 Enterprise competitiveness.
 Market potential,..etc
3. Technical Feasibility
 Determine facility needs
 Suitability of production technology
 Availability and suitability of site
 Raw materials

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 ,..continued
4. Financial Feasibility
 Estimate the total capital requirements.
 Estimate equity and credit needs: like credit sources
-- banks, government (i.e. direct loans or loan
guarantees)
 Budget expected costs and returns of various
alternatives.
5. Organizational/Managerial Feasibility
 Business structure
 Business founders
6. Study Conclusions: contain information you will use
for deciding whether to proceed with creating the
business. 6
 3.2 Business Plan Development
 Is a comprehensive set of guidelines for a new venture
 Present basic business idea and all related operating,
marketing, financial and managerial considerations
 The Purpose of Business Plan: to mention some:
 help the owner/manager crystallize and focus his/her idea
 help the owner/manager set objectives and gives him a
yardstick against which to monitor performance.
 Can attract any external finance needed by the business
 Can convince investors that the owner/manager has
identified high growth opportunities
 The plan can uncover weakness or alert the entrepreneur to
source of danger

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,…continued
When Business Plans are produced?
1. At the startup of a new business
2. Business purchase (Buying an existing business )
3. Ongoing: Ongoing review of progress,
4. Major decisions: (at a time of major change like major new
investment in equipment or funds to open a new outlet)
The Format of a Business Plan
5. Executive summary:
 clearly identified concept and purpose,
 concise and comprehensive answers to basic
questions like who, what, when, where, and how
questions compiled one to two pages long
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,…continued
2. Business Description: relevant history and
background of the business area, name of the business
and trading name, proposed date for commencement
of trading /beginning of a plan, its legal identity
3. The nature of the business /Industry Analysis:
 Product(s)or service(s):
 Market and customers: target market, classification of
customers, trend in market place, market size and
growth, etc
 Competition: describe of current and future competitors
 Marketing and Sales: determine pricing , distribution,
promotion
 Future Direction (where do we intend going?)

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4. Operations
 Product development, development costs and risks,
manufacturing (if applicable),
 production processes description,
 production equipment requirements, quality assurance ,
5. Management and Organization: Outline of
background, experience, skills and knowledge of
management team, etc
6. Financial Analysis and Projections:
 Determine funding requirement-startup capital, working
capital, asset capital, and timing of funds required, and
security offered.
7. Summary and Conclusions

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 End of
CHAPTER THREE

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