The Feasibility Plan

The Feasibility Plan is where you lay out your business strategy to "win" the market. You use it to convince investors that your business will make money. Site or location (physically or online) is a major component of this strategy because it has such a strong influence on the attractiveness and cost of your overall strategy.

Unless you are in a brand new market, or an existing market that is growing, the only way you can establish yourself is by taking business away from the competition. Investors want to know that you have some kind of advantage over direct competitors and that indirect competitors can't influence the outcome. They will scrutinize this section to see if your market potential is real and ensure that your sales forecast is not inflated or "too optimistic".

Assume you are going to the start-up Tire store

For the Feasibility Plan section, answer the following questions:

Site Analysis

Describe the site of your business, including any relevant details such as parking, neighbouring firms, visibility, and traffic (provide numbers).

Explain why this choice of a site is appropriate for what you are selling and appropriate for the customer groups to whom you are selling.

Site Expenses

If you are leasing your business premises, outline the major provisions of the lease including all rental and maintenance fees and renewal terms.

Or if your business is homebased, calculate the percentage of the home (in square footage)that will be used exclusively for business purposes. Explain the ownership or leasing arrangements of the home.

Market Potential

Clearly define the market potential you are estimating. Explain how you calculated the annual expenditures of your customer group for each product or service.

List all the relevant data you have gathered, indicating the sources. (Use an appendix if the information is extensive.)

Clearly explain any calculations or logic involved in estimating the market potential and indicate the dollar value of your estimate.

Competition

Name, locate, and briefly describe any direct competition to your business. Provide an estimate of the sales of each, explaining your sources of information.

Name, locate, and briefly describe any indirect competition.

Describe any advantages you will have over the competition.

Sales Forecast

Make as many sales forecast estimates as you can, using different methods. Rank the different estimates to show the range of sales you might expect.

From the information above, choose or calculate a single conservative estimate of sales that you will use for planning your business. Explain your choice.

Legal Organization

Briefly describe any business insurance you will carry, explaining the coverage, the premium, and the payment schedule.

Explain any techniques you will use for protection against theft or other dangers to which the business could be subject (security systems or operating policies for example).

Describe any intellectual property of the business and how it will be protected.