Using cooperatives as tool for achieving community wealth (Xl)
The feasibility study is part of a complete Business Plan. The feasibility study can be used to explore the market concerning a business idea or to confirm the feasibility of a business idea. In some instances, the business owner wants to carry out an environmental scanning of the business to understand the trends, market indices, competitor operations and more. But the business plan is about how to make real an entrepreneurial idea (could be a new company, or a new business line for an existing or expandingbusiness).
Summary and Outline of a Feasibility Study
A feasibility studyseeks to discover if a business or project is “feasible” or if it is not. It seeks to find out whether the business or project warrants further investment of time, money and further study. It is an inexpensive way to save the business owner from any wastage of capital injection in the business idea. Please note that the investment made by conducting the feasibility study will not be a waste because the research and information uncovered in the study will be useful in the business planning stage and will also reduce the research time and also costs of the business plan.
Depending on whether the feasibility is designed to be investigative or confirmatory, below is a typical outline for a feasibility study: ·Background to the Study ·Product or Service Description
·PESTEL and SWOT Analysis should look at Economic Analysis, Market Analysis,
Technical Analysis, Location Analysis, Manpower Analysis, Financial Analysis and others. This can be briefly or fully looked at here with mention in specific areas of the study below. It depends on the format adopted by the facilitator.
·A Description of the Market Environment Based on Field Work
·Analysis of the Competition (depending on some metrics, e.g. sales, market share, territorial control, branding, customer segmentation and others) ·Industry Analysis ·Existing Business Models in the Market/Industry
·Production Operations Requirements/Costs
·Management and Personnel Requirements/Costs
·Regulations Environmental Issues
·Sensitivity and Analysis
·Financial Projections covering Cash Flow, Income Statement, Break Even Analysis, and Capital Requirements
·Findings from the Field Work ·Recommendations ·Conclusion
and
Risk
Summary and Outline of a Business Plan
A business plan is prepared to explain how a business or project will be started, implemented and managed. It is the blueprint of the entire operation of the business or project. Business plans are commissioned for many reasons which include: Reorganisation of the business;for the attraction of funds to the business; a strategic tool for the business; a marketing and branding tool for the business; or a management blueprint for operations, among others. It can also serve all these purposes at the same time. Don’t tell anyone I said this: let your consultants prepare a business plan for you that serves all these purposes. You save money, time and maximise your investment.
Also, depending on the type of business plan requested by clients, this is a typical outline of a business plan content below: 1.0 Executive Summary 1.1 Objectives 1.2Mission 1.3 Keys to Success 2.0 Company Summary 2.1 Company Ownership 2.2 Company History (for ongoing companies) or Start-up Plan (for new companies)
2.3 Company Locations and Facilities 3.0 Products and Services 3.1 Product and Service Description
3.2 Comparison 3.3 Sales Literature 3.4 Sourcing and Fulfilment 3.5 Technology 3.6 Future Products and Services
4.0 Market Summary 4.1 Market Segmentation 4.2 Target Market Segment Strategy 4.2.1 Market Needs 4.2.2 Market Trends 4.2.3 Market Growth 4.3 Industry Analysis 4.3.1 Industry Participants
Competitive
Analysis 4.3.2 Distribution Patterns 4.3.3 Competition and Buying Patterns 4.3.4 Main Competitors 5.0 Strategy and Implementation Summary 5.1 Strategy Pyramids 5.2 Value Proposition 5.3 Competitive Edge 5.4 Marketing Strategy 5.4.1 Positioning Statements 5.4.2 Pricing Strategy 5.4.3 Promotion Strategy 5.4.4 Distribution Patterns 5.4.5 Marketing Programs 5.5 Sales Strategy 5.5.1Sales Forecast 5.5.2 Sales Programs 5.6 Strategic Alliances 5.7 Milestones 6.0 Management Summary 6.1 Organizational Structure 6.2 Management Team 6.3 Management Team Gaps 6.4 Personnel Plan 7.0 Financial Plan 7.1 Important Assumptions 7.2 Key Financial Indicators 7.3Break-even Analysis 7.4 Projected Cash Flow 7.5 Projected Profit and Loss 7.6 Projected Balance Sheet 7.7Business Ratios 7.8 Long-term Plan 8.0 Appendix This is the typical outline of a business plan but some consultants give value additions depending on the need of the business owner so that their businesses can achieve the goals for which the business plan was commissioned.
What I want readers to take away is that: Business plans and feasibility studies are analytical and decision-making tools used by for-profit and not-forprofit organisations. Feasibility studies are used to determine whether a proposed action has a high enough probability of success that it should be undertaken. Business plans are blueprints for implementing actions that have already been deemed feasible by the company’s management or chief prime mover(s).Business plans map out the direction a company intends to take to reach its revenue and profit objectives in the future. They are a compilation of numerous decisions made by the management team about how the company should be run. Feasibility studies are designed to provide guidance for one decision, i.e. whether to start the business or not or whether to expand the business operations or not. In other words, they help to determine whether the likelihood of success is high enough to make the financial risk worthwhile. They can also be used to make decisions about whether to launch a new product in an existing company, or enter a new market. In short, they are concerned about any activity where there is a question about whether the company should take the action or not. Feasibility studies are sometimes termed cost/ benefit analyses because the projected costs of the project are compared to the expected benefits to yield a conclusion.
I sure hope this helps the coop community and the SME community in Nigeria that this platform serves. We have five more interesting articles to go in this series that will help your coop business stand out.
Have a lovely weekend and God bless Nigeria.
Bridget Olotu is the CEO/ Lead Consultant, DeAim Innovative Resources Ltd. She can be reached on 08033036002 or bridgetolotu@gmail.com or www.valuetowealth.com.