We have researched extensively to create a comprehensive guide to help businesses with their feasibility studies. A feasibility study is an essential process that involves analysing a business idea to determine its viability, profitability, and potential success. In this article, we will provide an in-depth overview of the critical questions that a feasibility study must answer to help you determine whether your business idea is worth pursuing.
What are Business Feasibility Studies (Business Viability)?
A business feasibility study analyses the viability of the business or the proposed business idea, which assesses various aspects such as market demand, financial projections, legal requirements, technical requirements, and competitive landscape. A feasibility study aims to determine whether the proposed business idea is feasible and profitable and identify potential risks and challenges that may need to be addressed before starting the business. Dr Thommie Burger, Founder of JTB Consulting, explores 20 Questions you need to ask in conducting your Feasibility Study.
Feasibility Studies Q1: What is the Business Idea?
The first question that a feasibility study must answer is about the business idea itself. This question will help you define and understand the concept you are proposing, the industry you are entering, and the value proposition you plan to offer.
Feasibility Studies Q2: Who is the Target Audience?
The target audience is a crucial aspect of any business idea. It helps you determine your ideal customers, their needs, and preferences. This information will help you create a marketing strategy to reach your target audience effectively.
Feasibility Studies Q3: What is the Market Opportunity?
Market opportunity refers to the potential demand for your product or service. Understanding the size of the market and its growth potential can help you assess the viability of your business idea.
Feasibility Studies Q4: Who are the Competitors?
Identifying your competitors and understanding their strengths and weaknesses is essential to developing a market competitive strategy. You can also learn from their success and failure to create a more robust business model.
Feasibility Studies Q5: What is the Marketing Strategy?
A well-defined marketing strategy will help you attract and retain customers. You must identify the right channels, messaging, and tactics to reach your target audience.
Feasibility Studies Q6: What is the Business Model?
Your business model describes how you will create, deliver, and capture value. A robust business model is crucial for your success and scalability.
Feasibility Studies Q7: What are the Startup Costs?
Starting a business involves high costs. You need to identify the expenses of launching your business and determine how to finance them.
Feasibility Studies Q8: What is the Revenue Model?
Your revenue model outlines how you will generate income from your business. This can include sales, subscriptions, commissions, or other sources of revenue.
Feasibility Studies Q9: What are the Key Performance Indicators (KPIs)?
KPIs are critical metrics that help you measure the success of your business. You need to identify and track the right KPIs to ensure you are on track to achieve your goals.
Feasibility Studies Q10: What are the Operational Requirements?
Operational requirements refer to the resources you need to operate your business. You must identify the staff, equipment, and technology required to run your business efficiently.
Business Feasibility Q11: What are the Legal and Regulatory Requirements?
Starting a business involves legal and regulatory requirements. You need to understand the licenses, permits, and regulations that apply to your business.
Business Feasibility Q12: What are the Risks and Mitigation Strategies?
Identifying the risks associated with your business idea and developing a plan to mitigate them is essential to ensure the success of your business.
Business Feasibility Q13: What is the Financial Plan?
Your financial plan outlines the financial projections for your business. You need to identify your revenue streams, expenses, and profitability to determine the financial viability of your business.
Business Feasibility Q14: What is the Exit Strategy?
An exit strategy outlines how you plan to exit your business, such as selling it or transferring ownership. You need to identify the right exit strategy to maximise your return on investment.
Business Feasibility Q15: What is the Timeline for Launching the Business?
You need to develop a timeline for launching your business. This timeline should include key milestones and deadlines to ensure your business launches on time.
Business Feasibility Q16: What is the Marketing Budget?
Your marketing budget outlines the funds allocated for marketing activities. You need to identify the right budget to achieve your marketing goals.
Business Feasibility Q17: What is the Funding Strategy?
Your funding strategy outlines how you plan to finance your business. You need to identify the right financing sources, such as loans, investors, or crowdfunding, and develop a plan to secure funding.
Business Feasibility Q18: What is the Organisational Structure?
Your organisational structure outlines your business’s structure, including roles and responsibilities, hierarchy, and communication channels. A well-defined organisational structure is crucial for efficient and effective operations.
Business Feasibility Q19: What are the Human Resource Requirements?
Human resources are essential for any business. You need to identify the staff required for your business and develop a plan to recruit, train, and retain them.
Business Feasibility Q20: What are the Growth Strategies?
Growth strategies refer to the tactics and plan to expand your business. You must identify the growth opportunities and plan to capitalise on them. Included in your growth plans is the question: What is the Scalability Plan? Your scalability plan outlines how you plan to scale your business, including expanding your operations, increasing your market share, and developing new products or services.
By answering these 20 questions, you can conduct a comprehensive feasibility study to determine the viability of a business idea. A feasibility study (business viability study) provides critical insights to help you make informed decisions about your business and increase your chances of success.
At JTB Consulting, we specialise in helping businesses conduct feasibility studies and develop robust business plans. Our experienced team can guide you through the process and provide the support you need to launch a successful business.
Something more from JTB Consulting: Tips and Advice on Venture Capital Funding, Angels, Pitching and Startups.
Unleashing Your Startup’s Potential: How Venture Capital Funding Can Take You to the Next Level
VC funding refers to the process of a company or individual investing money in a business in exchange for equity. Startups and small businesses commonly seek this type of investment as it provides them access to additional resources they may not otherwise have access to.
Venture capital firms are organisations that invest money into new businesses with the hope of making a profit. They typically invest in startups and help them grow into successful companies, making money by selling their shares in the company or receiving dividends from the profits made by the business.
Startups seek VC funding to accelerate their business growth beyond what they could achieve. This investment gives startups access to resources such as expertise and human capital, allowing them to launch new products, expand globally, or accelerate their growth rate. That’s why most startups aim to secure VC funding.
Venture Capital Funding Tip 1: Build a Strong Business Plan
Before you start looking for funding, you must have a strong business plan. Your business plan should clearly outline your company’s goals, strategies, and financial projections. It should also include information about your team, market analysis, and competitive landscape. A well-crafted business plan shows investors that you have a clear vision for your business and are serious about its success.
Venture Capital Funding Tip 2: Identify the Right VC
Not all VCs are created equal. It’s important to find a VC with experience in your industry and who is interested in investing in startups like yours. Research potential investors and find out what types of businesses they have invested in before. Look for VCs with a track record of success and a reputation for being easy to work with.
Venture Capital Funding Tip 3: Build Relationships
Getting a VC to invest in your startup is not just about pitching your business. It’s also about building relationships. Attend networking events, industry conferences, and meetups to get to know potential investors. Building a relationship with a VC takes time and effort, but it’s ultimately worth it. A strong relationship with a VC can lead to more than just funding. It can also lead to mentorship, guidance, and valuable connections.
Venture Capital Funding Tip 4: Prepare a Strong Pitch
Once you have identified potential investors and built relationships, it’s time to prepare a strong pitch. Your pitch should be clear, concise, and compelling. It should highlight your business’s unique selling points and clearly explain why it’s a good investment opportunity. Be prepared to answer tough questions about your business, market, and competition.
Venture Capital Funding Tip 5: Be Transparent
When it comes to securing funding from a VC, transparency is key. Be honest about your business’s strengths and weaknesses. Disclose any potential risks and challenges that your business may face. A VC will appreciate your honesty and transparency and will be more likely to invest in your business if they trust you.
Venture Capital Funding Tip 6: Negotiate Terms
If a VC is interested in investing in your business, it’s important to negotiate the terms of the investment. This includes the amount of funding, equity stake, and other terms and conditions. It’s important to have a lawyer review any contracts and agreements to ensure that you fully understand the terms.
In conclusion, getting a VC to invest in your startup is not easy, but it’s not impossible. By following these six steps, you can increase your chances of securing funding from a VC. Remember to build a strong business plan, identify the right VC, build relationships, prepare a strong pitch, be transparent, and negotiate terms. With hard work, perseverance, and a little bit of luck, you can get a venture capitalist to invest in your startup and take your business to the next level.
Crowdfunding: Weighing the Pros and Cons for Your Startup
With the rise of social media and online platforms, crowdfunding has become an increasingly popular way for startups to raise funds. However, it’s important to understand the pros and cons of crowdfunding before diving in headfirst.
Pros of Crowdfunding:
- Access to Capital: One of the biggest advantages of crowdfunding is that it allows startups to access capital that may not have been available through traditional financing methods.
- Market Validation: By using crowdfunding, startups can gauge whether or not there is market demand for their product or service. If a crowdfunding campaign is successful, it can serve as proof of concept and help attract more investors.
- Brand Awareness: Crowdfunding campaigns can help generate buzz around a startup and increase brand awareness. This can be especially important for startups starting out and may not have the marketing budget to reach a wider audience.
Cons of Crowdfunding:
- High Fees: Crowdfunding platforms typically charge a fee for hosting campaigns ranging from 5-10% of the funds raised. This can eat into a startup’s budget and may not be worth it for campaigns that are not successful.
- Time-Consuming: Running a crowdfunding campaign can be time-consuming and requires a lot of planning and preparation. Building a successful campaign can take several months, and startups must be prepared to devote significant resources.
- Lack of Control: Crowdfunding campaigns are public and open to anyone, which means that startups may not have complete control over the messaging and branding associated with their campaign. This can be a risk for startups concerned about protecting their intellectual property or maintaining a brand image.
In conclusion, while crowdfunding can be a valuable tool for startups looking to raise capital, it’s important to carefully consider the pros and cons before launching a campaign. By doing so, entrepreneurs can make informed decisions about whether or not crowdfunding is the right option for their business.
Unlocking Investment: The Crucial Role of Traction in Raising Capital
Traction is the measurable evidence that your business is gaining customer traction and progressing towards its goals. It clearly indicates to potential investors that your business has a solid foundation and is on track for growth. Traction shows that your business is a safe bet and has the potential to generate a return on investment.
Investors want to see traction because it reduces their risk. If a business has no traction, it isn’t easy to know whether it will succeed or not. But if a business has proven traction, it’s much easier to see the potential for growth and success.
How to Increase Traction for Your Business
- Focus on Your Niche Market: The first step in increasing traction for your business is to focus on your niche market. This means identifying a specific market segment you can serve better than anyone else. By focusing on a niche market, you can better understand your customers’ needs and preferences, which will help you tailor your product or service to meet their needs more effectively.
- Offer a Unique Value Proposition: Once you’ve identified your niche market, you must offer a unique value proposition. This means offering something that your competitors don’t or can’t offer. Your unique value proposition should be why customers choose your product or service over your competitors.
- Develop a Strong Brand Identity: A strong brand identity can help you stand out from your competitors and increase traction for your business. Your brand identity should reflect your unique value proposition and resonate with your target audience. It should be consistent across all your marketing channels, from your website to your social media profiles.
- Build a Strong Online Presence: A strong online presence is crucial for increasing traction for your business. This means having a professional website, active social media profiles, and regularly publishing high-quality content. Your online presence should be consistent with your brand identity and communicate your unique value proposition to your target audience.
- Leverage Customer Feedback: Customer feedback is a valuable source of information that can help you improve your product or service and increase traction for your business. By listening to your customers’ feedback, you can identify areas for improvement and make changes that will help you better serve your target audience.
Before You Pitch: Essential Strategies to Strengthen Your Business Before Raising Capital
Why Focus on Pre-Capital Raising?
Before embarking on the journey to raising capital, it is essential to identify and focus on critical areas that can help you secure funding. By taking a step back and assessing your business, you can identify weaknesses, strengths, and areas for improvement. Here are some key areas to consider:
Business Plan Review
A solid business plan is an essential tool that can help you secure funding. It is crucial to review and ensure that your plan is thorough and well-written. Investors want to see a clear, concise, and realistic plan that demonstrates a viable business model, market analysis, financial projections, and growth strategy.
Market Research and Analysis
Market research and analysis are crucial elements to focus on before raising capital. Understanding your target market, competition, and industry trends can help you identify gaps in the market and adjust your strategy accordingly. This information can also help you create a unique selling proposition that sets your business apart from the competition.
Financial Planning and Projections
It is essential to have a solid understanding of your financials before raising capital. Investors want to see realistic projections and a sound financial plan. This includes understanding your cash flow, expenses, revenue streams, and break-even analysis. By having a solid financial plan, you can demonstrate to investors that you clearly understand your business’s financials and can manage capital effectively.
Team and Talent Management
Investors invest in the business idea and the team behind it. It is crucial to assess your team’s skills, experience, and capabilities to ensure that you have the right people in place to execute your business plan. This includes identifying gaps and hiring talented individuals to fill those gaps.
Marketing and Sales Strategy
A solid marketing and sales strategy is essential to attracting and retaining customers. Investors want to see that you have a clear understanding of your target market and a strategy in place to reach them effectively. This includes identifying your unique selling proposition, channels for reaching your target market, and a sales strategy that converts leads into paying customers.
Expert Tips for Successfully Raising a Friends and Family Round of Funding
We are pleased to provide expert advice on raising a Friends and Family round of funding. Whether you’re a startup entrepreneur or a seasoned business owner, getting financial support from loved ones can be a great way to get your business off the ground or take it to the next level. Here are our top tips on how to do it successfully.
Raising a Friends and Family Round of Funding Tip 1: Start with a solid business plan.
Before asking for financial help from family and friends, it’s essential to have a solid business plan in place. This plan should clearly outline your business objectives, target market, and competitive advantage. Having a well-crafted business plan shows your potential investors that you’re serious about your business and that you have a clear vision for the future.
Raising a Friends and Family Round of Funding Tip 2: Determine your needed amount.
Once you have your business plan in place, you need to determine the amount of funding you need. It’s essential to be realistic about the amount of money you’re asking for and to provide a clear breakdown of how you plan to use the funds. Ensure you have a detailed budget to show how the money will be spent.
Raising a Friends and Family Round of Funding Tip 3: Be clear about the terms.
When raising a Friends and Family round of funding, it’s essential to be clear about the terms of the investment. You need to be transparent about the risks involved and clearly understand the potential rewards. You should also outline the repayment terms and the timeline for the return on investment.
Raising a Friends and Family Round of Funding Tip 4: Prepare a formal agreement.
To avoid any misunderstandings, it’s crucial to prepare a formal agreement that outlines the terms of the investment. This agreement should be signed by all parties involved, and a copy should be kept for your records.
Raising a Friends and Family Round of Funding Tip 5: Provide regular updates.
Once you’ve received the funding, you must provide regular updates to your investors. This could be in the form of a monthly or quarterly report, depending on the investment size. Regular communication helps build trust and shows your investors you’re committed to your business’s success.
Raising a Friends and Family round of funding can be an excellent way to get your business off the ground or take it to the next level. To do it successfully, you need to have a solid business plan in place, be transparent about the terms of the investment, and provide regular updates to your investors. By following these tips, you’ll be on your way to a successful funding round.
Mastering the Art of Angel Investing: Quick Tips and Tricks for Approaching Investors
Whether you’re a startup or an established business, angel investors can be a great source of capital. Here are some tips to help you approach angel investors successfully.
Approaching Angel Investors Tip 1: Build a network.
One of the best ways to approach angel investors is through personal connections. Building a network of industry contacts and attending networking events can help you get your foot in the door. You can also reach out to other entrepreneurs who have successfully secured funding from angel investors and ask for referrals.
Approaching Angel Investors Tip 2: Prepare a pitch deck.
When approaching angel investors, it’s essential to have a well-prepared pitch deck that outlines your business plan, market research, and financial projections. Your pitch deck should be concise, visually appealing, and easily understood. Remember to highlight your unique selling proposition and demonstrate why your business is worth investing in.
Approaching Angel Investors Tip 3: Be clear about your needs.
When approaching angel investors, it’s crucial to be clear about your funding needs. You should clearly understand how much money you need and how you plan to use it. You should also be transparent about the risks involved and provide a clear understanding of the potential rewards.
Approaching Angel Investors Tip 4: Be prepared to negotiate.
Angel investors typically want some control over your business in exchange for their investment. This could include a seat on your board of directors or a percentage of your equity. It’s essential to be prepared to negotiate and to have a clear understanding of what you’re willing to offer in exchange for the investment.
Approaching angel investors for funding can be a great way to take your business to the next level. You can increase your chances of success by building a network, preparing a pitch deck, being clear about your needs, and being prepared to negotiate. Remember, the key to success is to be persistent, confident, and passionate about your business. Good luck!
Raising Capital: Is a Working MVP a Necessity?
At some point, every entrepreneur faces the challenge of raising capital. Whether you are starting a new business or looking to expand an existing one, securing financing is often a critical step in achieving success. However, many entrepreneurs wonder if it is worth raising capital without having a working MVP. Let’s explore this question in detail and give you the insights you need to make an informed decision.
What is a Working MVP?
Defining what we mean by a working MVP is essential before discussing whether a working MVP is necessary to raise capital. MVP stands for Minimum Viable Product, and it refers to the earliest version of a product or service that can be released to the market. A working MVP is a functional version of the product that customers can use.
The Importance of a Working MVP
There are many reasons why having a working MVP is essential to raising capital. First and foremost, a working MVP demonstrates to investors that you have a clear vision for your product and that you have taken the necessary steps to make it a reality. It shows that you have a deep understanding of your target market and that you have validated your assumptions through real-world testing.
Additionally, having a working MVP allows you to gather customer feedback and improve your product before scaling it up. This feedback loop is crucial to any product or service’s success and can help you avoid costly mistakes down the line.
Can You Raise Capital Without a Working MVP?
While having a working MVP is undoubtedly beneficial, raising capital is not always necessary. Investors may consider several other factors when deciding whether to invest in your business, including your team, market size, and growth potential.
However, raising capital without a working MVP is undoubtedly more challenging. You will need to be able to articulate your vision for your product clearly, demonstrate your market knowledge, and provide evidence that your product has the potential to succeed. Without a working MVP, you may need to rely more heavily on your network to secure financing.
In conclusion, while raising capital without a working MVP is possible, having one can make the process much smoother. A working MVP demonstrates to investors that you have a clear vision for your product, have done the necessary research and testing, and are committed to making your product a success. If you are serious about raising capital for your business, we recommend investing the time and resources necessary to develop a working MVP before seeking financing.