Unit 6

Social Entrepreneurship
Feasibility Analysis for Social Ventures
 Feasibility Analysis for Social Ventures

Learning Objectives
• 1) Understand the importance of evaluating social venture opportunities
• 2) Understand the importance of feasibility analysis
• 3) Describe the technique and tools of feasibility analysis
• 4) Describe the tools for evaluating social venture opportunities

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 Feasibility Analysis for Social Ventures

• Nature of Feasibility Analysis

• Defining Feasibility Analysis
• Process of collecting and analyzing data prior to the new business start-up, and
then using knowledge thus gained to formulate the business plan itself
• It intends to test whether the business concept is worth pursuing and under which
conditions.
• In a feasibility analysis, the focus is on the idea and whether it is worth pursuing.
• Questions to address in a feasibility analysis include:
• What do you have to know about your customers, their needs, and this business?
• Might this concept be viable in other markets?
• What is the potential for this business? How much money do you think such a
business might make?
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 Feasibility Analysis for Social Ventures

• Nature of Feasibility Analysis (cont’d)

• Importance of conducting a feasibility analysis
• Determine whether to pursue the current idea.
• Refine the idea to improve its potential for success.
• Abandon the current idea.
• Search for new idea(s).

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 Feasibility Analysis for Social Ventures

Nature of Feasibility Analysis (cont’d)

Table 7.1. Components of Feasibility Analysis
Product/service Industry/target market Organizational feasibility
feasibility feasibility Financial feasibility
Product/service Industry attractiveness New venture team Total start-up cash needed
desirability   effectiveness  
  Target market   Financial performance of
Product/service demand attractiveness Sufficiency of non-financial similar firms
  organizational resources  
  Overall financial
  attractiveness of the new
venture

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 Feasibility Analysis for Social Ventures

• Nature of Feasibility Analysis (cont’d)

Exhibit 7.1. Product/Service Feasibility
Product/Service Description
-------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------

How likely would you be to buy the product or service described above, if
we make it?
 
______Definitely would buy
 ______Probably would buy
 ______Might or might not buy
 ______Probably would not buy
 ______Definitely would not buy  

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 Feasibility Analysis for Social Ventures

• Tools for Analyzing Business Opportunities

• SWOT Analysis
• Used to evaluate the soundness of entrepreneurial opportunities
• Identifies Strengths, Weaknesses, Opportunities, and Threats.
• Helps to address the following KEY questions:
• What social problem does this opportunity address?
• Will this opportunity make a difference in the lives of people and the
community?
• Is the opportunity scalable? Can the venture be sustainable over time?
• Does the social entrepreneur have the resources
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 Feasibility Analysis for Social Ventures

• Tools for Analyzing Social Venture Opportunities

Outside-In/Inside-Out Analysis Model
• Draws heavily from the SWOT analysis.
• Considers both inside and outside factors
• Outside factors include the general environment of the venture (economic,
political, legal, social, global, technological and the competition).
• Inside factors include internal resources, expertise and skills of managers
and employees.

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 Feasibility Analysis for Social Ventures

• Tools for Analyzing Social Venture Opportunities (cont’d)

• Quick Screen Model
• Includes three main criteria:
• Market and Margin Issues
• Competitive Advantage
• Value Creation and Realization Issues
• Table 7.3 illustrates the key elements of the model that could apply to the analysis
of social opportunities.

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 Feasibility Analysis for Social Ventures

• Tools for Analyzing Social Venture Opportunities (cont’d)

Exhibit 2. Adaptation of the Screen Model to Social Ventures
I. Market and Social Impact
Criterion Higher Potential Low Potential
Social need/problem Clearly Identified Unfocused

Customers/Beneficiaries Reachable and receptive Unreachable/Not interested

Social Impact Clearly measurable Difficult to measure

Value added Significant Insignificant

Overall Potential

1. Market Higher __________________Average_____________________Lower

2. Social Impact Higher __________________Average_____________________Lower

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 Feasibility Analysis for Social Ventures

• Tools for Analyzing Social Venture Opportunities

(cont’d)
Exhibit 2. Adaptation of the Screen Model to Social Ventures (cont’d)
Criterion II. Competition and Cooperation
Higher Potential LowNetworks
Potential
Social ventures providing Low Large

Similar Services

Barriers to entry Low High

Timing Right Not to right

Costs Low High

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 Feasibility Analysis for Social Ventures

• Tools for Analyzing Social Venture Opportunities

(cont’d)
Exhibit 2. Adaptation of the Screen Model to Social Ventures (cont’d)
Criterion III. Potential
Higher Value Creation and Realization Issues
Low Potential
Social benefits High Low
Earned-income High Low
SROI potential High Low

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 Feasibility Analysis for Social Ventures

• Tools for Analyzing Social Venture Opportunities

(cont’d)
Exhibit 2. Adaptation of the Screen Model to Social Ventures (cont’d)
IV. Overall Potential
Go No Go Go if…
1. Earned income
2. Sustainability
3. Social impact
4. SROI
5. Timing
6. Other important issue

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 Feasibility Analysis for Social Ventures

• Tools for Analyzing Social Venture Opportunities (cont’d)

• Kitzi’s Model of Evaluating Social Opportunities
• Draws from Bygrave and Zacharakis’s model.
• Includes three major areas:
• Social value potential
• Market potential
• Sustainability potential

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 Feasibility Analysis for Social Ventures
• Tools for Analyzing Social Venture Opportunities (cont’d)
Exhibit 3. The Social Opportunity Assessment Tool
I Social Value Potential
Criterion Strong Opportunity
Social need Service or product directly an identified
need
Mission alignment Service or product is in direct alignment
with mission
Achievable impact Service or product can fulfil identified
social need in a measurable way
Social return on Investment(SROI) A strong effectiveness to cost ratio
Service or product will be positively
Community support perceived and endorsed by the community
Weak Opportunity
Service or product addresses needs only
indirectly
Service or product is only indirectly
aligned or is misaligned with mission
Service or product will only minimally
address the need
A weak effectiveness to cost ratio, or costs
exceed impact
Service or product will not be well
accepted by the community
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 Feasibility Analysis for Social Ventures

• Tools for Analyzing Social Venture Opportunities (cont’d)

Exhibit 3. The Social Opportunity Assessment Tool
II (a) Market Potential
Criterion Strong Opportunity Weak Opportunity
Customer need or want Target beneficiary both needs and wants Target beneficiary is indifferent to the service or
the service or product product
Window of opportunity Timing is good Timing is Poor
Evidence of philanthropic, government, Evidence of little or no interest by philanthropic,
Investor interest or private sector financial interest government, or private investors
Market size Large Small
Market share attainable An open market, with little or no Very competitive market, with several
competition substitutors

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 Feasibility Analysis for Social Ventures

• Tools for Analyzing Social Venture Opportunities (cont’d)

Exhibit 3. The Social Opportunity Assessment Tool
II.(b) Competitive Advantage Potential
Criterion Strong Opportunity Weak Opportunity
Barriers to entry High, many Low or non-existent
Prospective partnership or Many potential partners Few potential partners
alliances
Control over costs Substantial control Little or no control
Compelling mission Highly compelling; widespread Less compelling; little understanding or
sympathy sympathy
Management team Strong, complete skill set Incomplete skill set

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 Feasibility Analysis for Social Ventures

• Tools for Analyzing Social Venture Opportunities (cont’d)

Exhibit 3. The Social Opportunity Assessment Tool
III Sustainability Potential
Criterion Strong Opportunity Weak Opportunity
Venture capacity Sufficient physical resources to start and Insufficient physical resources to start and
maintain the venture maintain the venture
Venture capability Sufficiently skilled entrepreneur(s), staff, Insufficient skilled entrepreneur(s), staff, and
and board board
Investor interest Evidence of philanthropic government, or Evidence of little or no interest by
private sector financial interest philanthropic, government, or private investors
Ability to generate High potential for charging user fees Low potential for charging user fees and/or
earned income and/or selling goods or services selling goods or services

Compelling mission Highly compelling; widespread sympathy Less compelling, little understanding or
sympathy
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 Feasibility Analysis for Social Ventures

• Tools for Analyzing Social Venture Opportunities (cont’d)

Exhibit 3. The Social Opportunity Assessment Tool

Overall Potential

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 Reading
• Students should read chapter 7 from the book to enhance their
further understanding.
• https://online.vitalsource.com/#/books/9781136655937/epubcfi/6/34%5B
%3Bvnd.vst.idref%3DfC07_chapter%5D!/
4/2/2%5Bchapter7%5D/4%400:0

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