Feasibility Study/Strategic
Planning/SWOT
Is there a difference?
What is a Feasibility study?
A study that is provides focus on the
primary issues of a business idea. The
process takes a subjective look at any
“make or break” issues that would prevent
a business from being successful.
Feasibility Study?
This analysis provides necessary
information that is used as the basis
for a business plan. Is the project
feasible? What flaws or barriers
would lead to failure? This
information provides the basis for
the marketing analysis and strategy
of the business plan.
SWOT, what is it good for?
. Strengths
Weaknesses
Opportunities
Threats
•
•
•
•
•
Possible Strengths:
Finance expertise.
Innovation
Proximity to raw materials
Superior equipment
And various other competitive
advantages.
•
•
•
•
•
Possible Weaknesses:
No finance expertise
Commodity product in a mature
Remote or poor access location
Broken down and obsolete
machinery
damaged reputation
•
•
•
•
•
Possible Opportunities:
High potential market – the internet
or evolving country.
Creating strategic alliances
Transition into new markets
Global market
An unfulfilled niche in a a market
segment
Possible Threats:
• Entry of competitors into the
market
• Price wars
• Breakthrough in alternative or
competing product
• Language and cultural barriers
• Legal constraints or new taxes
for your product
A word of caution, SWOT analysis
is not a science with definitive
resolve and issues. Subjective
analysis can be dangerous as two
individuals can differ on the
version of SWOT. It is supposed to
draw discussion on the positive
and negative issues facing an
organization. The final answers
are not necessarily correct.
Important Considerations
•
Keep the issues realistic. Take
an honest look in the mirror.
•
Think strategically. Where are
we and where do we want to go.
• Don’t get bogged down with
short-term issues.
•
Keep discussions focused and
on target.
• Find benchmarks or and
competitive analysis to draw on
SWOT issues. Where are you
better or worse than your
competitors.
• Keep the analysis concise and
basic. Do not over analyze the
issues. All participant need to
understand the issues.
Financial and Business Planning
80% / 50%/ 30% Failure?
Lack of Planning
Lack of Experience
Insufficient Capital
What is a Business Plan?
 Conceptual – Collection of ideas and
actions anticipated over the long term to
ensure the economic success of the
business.
 Physical – A document detailing the
collection of ideas and actions to be
taken. The document should include a
detailed description of the business, the
market, marketing strategies,
management and organizational, and
financial parameters.
8 Reasons to Write A Business Plan
1)
2)
3)
Build a case for funding of a start-up or
expansion of an existing business.
Identify and define goals, management,
and operational strategies of a new or
established business.
Document the feasibility of starting a
business or expanding.
4) Serves as a measure of performance and
indicates a need for changes.
5) Enables a business to focus efforts to
achieve key objectives.
6) Defines where a company is going and
how to get there.
7) Determines the financial resources
required
8) Gives you an objective, critical, and
unemotional look at your business project
in its entirety.
CONTENTS
Executive Summary
Statement of Purpose
Description of the Business
Competition
CONTENTS
Market Strategy
Location
Management
Personnel
Uses of Funds
Appendices
Appendices
Cash Flow Statement
Balance Sheet
Personal & Business Tax Returns
3 years
Personal Financial Statement
Resume
Equipment Lists
List of Collateral
BUSINESS NAME:STARTUP RESTAURANT
ADDRESS:_________________________
_________________________
May-02
BEGINNING CASH
126100
BANK LOAN, Note 1
180000
-REAL ESTATE ACQUISITION 250000
-REMODELING
14000
-EQUIPMENT, FIXTURES
8800
-ADVERTISING
1500
-INVENTORY&LICENSES
1800
-CLOSING COSTS
20000
CASH -ON -H AN D
10000
CONTACT PERSON: JOE ENTREPRENEUR
TELEPHONE #:
PROJECTION BEGINS: MAY,2002
Jun-02
8069
Jul-02
9058
Aug-02
10767
Sep-02
13196
Oct-02
16345
Nov-02
20214
Dec-02
25083
Jan-03
33552
Feb-03
38421
Mar-03
43290
Apr-03
48159
8069
9058
10767
13196
16345
20214
25083
33552
38421
43290
48159
REVENUES
20000
21000
22000
23000
24000
25000
25000
30000
25000
25000
25000
25000
BEGINNING INV
+PURCHASES, Note 3
-ENDING INV
COST OF GOODS
4000
5800
4000
5800
14200
4000
5880
4000
5880
15120
4000
6160
4000
6160
15840
4000
6440
4000
6440
16560
4000
6720
4000
6720
17280
4000
7000
4000
7000
18000
4000
7000
4000
7000
18000
4000
8400
4000
8400
21600
4000
7000
4000
7000
18000
4000
7000
4000
7000
18000
4000
7000
4000
7000
18000
4000
7000
4000
7000
18000
2000
4100
2500
110
1000
200
200
2000
150
175
300
12,735
2000
4100
2500
110
1000
200
200
2000
150
175
300
12,735
2000
4100
2500
110
1000
200
200
2000
150
175
300
12,735
2000
4100
2500
110
0
200
200
2000
150
175
300
11,735
2000
4100
2500
110
0
200
200
2000
150
175
300
11,735
2000
4100
2500
110
0
200
200
2000
150
175
300
11,735
2000
4100
2500
110
0
200
200
2000
150
175
300
11,735
2000
4100
2500
110
0
200
200
2000
150
175
300
11,735
2000
4100
2500
110
0
200
200
2000
150
175
300
11,735
1396
1,396
1396
1,396
1396
1,396
1396
1,396
1396
1,396
1396
1,396
1396
1,396
1396
1,396
1396
1,396
1396
1,396
989
1,709
2,429
3,149
3,869
4,869
8,469
4,869
4,869
4,869
4,869
9,058
10,767
13,196
16,345
20,214
25,083
33,552
38,421
43,290
48,159
53,028
GR OS S P R OFIT
SELLIN G, GEN ER AL & AD MIN IST R AT IVE EXPEN SES
OWNER'S SALARIES
2000
2000
2000
EMPLOYEE WAGES
4100
4100
4100
UTILITIES
2500
2500
2500
TELEPHONE
110
110
110
INSURANCE
3000
1000
1000
MISC SUPPLIES
200
200
200
PROFESSIONAL FEES
200
200
200
TAXES
2000
2000
2000
ADVERTISING
150
150
150
CREDIT CARD FEES
175
175
175
MISC EXP
300
300
300
T OT AL SGA EXP
14,735
12,735
12,735
NEW LOAN AMORTIZATION
BANK LOAN, Note 1
N EW LOAN T OT AL
N ET PR OFIT (LOSS)
CASH POSIT ION
1396
1,396
(1,931)
8,069
1396
1,396
WWW.BPLANS.COM
WWW.BUSINESSPLANS.ORG
Business Structures




Sole Proprietorship
Partnership
Limited Liability
Company
Corporations
Sole Proprietorship
 ‘doing business as’ (d/b/a)
 SIMPLE/ MINIMAL COSTS
 Suited to the start-up of a
one-person business.
However, the single owner
assumes all business
responsibilities, including
unlimited financial liability
incurred by the business.
Partnership
 A relationship
between two or more
persons or
companies doing
business together
Limited Liability Company
 Built for the small business
 LLC is an unincorporated
business organization having
liability for the contractual
obligations and other
liabilities of the business.
 File Articles of Organization
with the NYS Department of
State
Corporations
 A NY State Corporation is an entity
separate and distinct from the individual(s)
who own and manage the business.
 Business corporations are operated for
profit and are authorized to raise capital by
selling shares of interest in the
corporation.
 A corporation’s debts and obligations are
distinctly it’s own.
Commercial Lending Process
5 C’s of credit





Character
Capability
Capital
Conditions
Collateral
Character
 Clients willingness and determination
to meet loan obligations
 Bankers are looking for individuals
who will make every effort to repay a
loan and will work openly and
cooperatively with their banker if their
business if experiences financial
difficulties
 Credit Reporting
Capacity/ Cash Flow
 Management’s ability to generate enough
cash to satisfy all obligations.
 It is easier to evaluate the capacity of an
established company. A banker looks at
past financial performance and compares
to other businesses in the same industry.
 It is more difficult to evaluate the capacity
of a new business. In this case,
managerial experience and training are
critical considerations.
 Cash Flow projections
Capital
 Funds available to operate a
business, of which there are two
primary considerations:
 The amount of equity capital the
owners have invested in the
business and
 How effectively the total capital,
including creditor capital, is
employed
Conditions
(No Control)
 Are external variables, such as the
state of the economy and the type
of industry in which the client’s
business is a part.
Collateral
 A borrower may pledge collateral to
offset weaknesses in the other Cs
 Collateral provides the bank a
secondary source of repayment if
the primary source of repayment if
the primary source of repayment
does not materialize