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Feasibility Study/Strategic Planning/SWOT Is there a difference?

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.

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Feasibility Study/Strategic Planning/SWOT Is there a difference?

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  1. Feasibility Study/Strategic Planning/SWOT Is there a difference?

  2. 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.

  3. 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.

  4. SWOT, what is it good for? . Strengths Weaknesses Opportunities Threats

  5. Possible Strengths: • Finance expertise. • Innovation • Proximity to raw materials • Superior equipment • And various other competitive advantages.

  6. Possible Weaknesses: • No finance expertise • Commodity product in a mature • Remote or poor access location • Broken down and obsolete machinery • damaged reputation

  7. 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

  8. 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

  9. 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.

  10. 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.

  11. 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.

  12. Financial and Business Planning

  13. 80% / 50%/ 30% Failure? Lack of Planning Lack of Experience Insufficient Capital

  14. 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.

  15. 8 Reasons to Write A Business Plan • 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.

  16. 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.

  17. CONTENTS Executive Summary Statement of Purpose Description of the Business Competition

  18. CONTENTS Market Strategy Location Management Personnel Uses of Funds Appendices

  19. Appendices Cash Flow Statement Balance Sheet Personal & Business Tax Returns 3 years Personal Financial Statement Resume Equipment Lists List of Collateral

  20. WWW.BPLANS.COM WWW.BUSINESSPLANS.ORG

  21. Business Structures • Sole Proprietorship • Partnership • Limited Liability Company • Corporations

  22. 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.

  23. Partnership • A relationship between two or more persons or companies doing business together

  24. 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

  25. 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.

  26. Commercial Lending Process 5 C’s of credit • Character • Capability • Capital • Conditions • Collateral

  27. 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

  28. 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

  29. 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

  30. 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.

  31. 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

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