Role Of Feasibility Evaluation In Evaluating A SMALL BUSINESS Idea

Business Concept Affirmation (Feasibility Evaluation)

Bateman (2004) describes feasibility research as the process of determining the viability of any business idea which involves preliminary evaluation of the theory itself to choose its probable. Once a home based business has been identified, it is completely critical to undertake a study to see if the business enterprise idea is workable over time. When the feasibility study gives a green light, the business idea can be gone ahead with if not it needs to be decreased or reworked to match the benchmarks of performance.

According to Bhide (2000), the inability in entrepreneurial ventures is associated with overestimation of personal odds for success and underestimation of competitive replies from others on the market.

The following diagram can be an illustration that demonstrates the role and need for feasibility analysis before we get into writing a small business plan. It's important to know where the business venture should go before we make a decision the direction.

Role of Feasibility Analysis in evaluating a company idea

Source: Bateman (2004)

From the depiction in the Body 1. 1 it is clear that before we continue with an idea, it is critical to spend plenty of time and focus on logically examine the feasibility of product/service; feasibility of industry/market; feasibility of business and financial feasibility.

Objectives of the venture

SugarWeb will complete the following targets within the first 12 months of its procedure

Creating a special brand image and distinguishing itself when you are a fashionable, stylish and innovative ambience adding it apart from other internet providers and coffee shops.

Creating a casual and comforting set-up that offers the service of internet access along with providing coffee and related products. It will try to get people from different ethnic backgrounds and interests, especially for the goal of socializing.

Provide broadband internet access at affordable rates.

Provide wealthy quality espresso and other related products at acceptable prices.

Product/Service Feasibility

In this step we propose to evaluate the overall attractiveness of the product/service combo we offer through the business idea. This consists of seeking information regarding the product/service demand in the market, how could it be different from other market players. Cooper (1998, p. 99) has emphasized on the value of performing product/service feasibility in effective development of offering and its own subsequent execution. We propose to talk, discuss, learn, adjust to the possible customers' needs and desires. We will gather comprehensive opinions from the customer reactions towards our new idea of offering access to the internet services along with products in a dedicated coffee shop within the establishment.

We will test our concept of internet caf mingled with a restaurant in the metropolitan region of Gomati Nagar, Lucknow, India. We will establish a short questionnaire to assess the potential of idea. Broadly it'll include questions such as

How often does one visit cyber caf?

How often do you visit coffee shops?

Are you considering this sort of proposition where you can enjoy caffeine while being able to access internet?

How likely do you want to buy the offering if we launch such a blend of product and service that should go well alongside one another?

Definitely buy

Probably buy

Might or might not buy

Probably not buy

Definitely not buy

We will use both paper-based and online questionnaires to get first/ pre-launch opinions of customers about the product/service. We use the services of any of the paid survey tools such as SurveyMonkey and SurveyGizmo.

Industry/Market Feasibility Analysis

We propose to transport on a business and market feasibility research to ascertain if the related industry provides enough opportunities for our business idea and whether the current market conditions are favourable to expose such a service. Why is our particular business idea challenging to assess in terms of its industry and market is its range encompassing two industries- internet services and coffee shop products. It is thus necessary to know the necessity for internet services while also locating the espresso business suitability in the worried region of Lucknow, India. This review is important to measure industry elegance, market timeliness and identifying a niche market.

According to the Coffee Panel of India, domestic coffee consumption keeps growing 5-6 percent yearly. The primary reasons cited behind this progress is the development of caf culture and the reach of coffee drinking alcohol culture into North Indian state governments. It has become a drink of masses and carries a lifestyle symbolism mounted on it. Even the Caffeine Table of India is promoting caffeine as a lifestyle drink.

Coffee ingestion in India

Growth in Local Consumption (1995 - 2008)

Source: Coffee Table of India (2008)

The awareness of computer knowledge and internet usage is increasing at a commendable tempo. Relating to I-Cube (2009), increasing numbers of people are experiencing internet and around 70% computer literate folks have used internet which shows that people are becoming more alert to internet and its own significance and are prepared to experience the occurrence. Internet penetration is also increasing in Non-Metro cities. However Lucknow is a soon-to-be Metro city of India. In the next illustration, Lucknow is based on the orange music group of internet usage growth.

Penetration of internet into the Non-metro metropolitan areas of India

Source: I-Cube (2007)

I-Cube (2009) also presents the key applications in growing internet utilization. It also shows that school teenagers, school students and young men. The development of Blogging platforms 2. 0 is generating the introduction of internet use by which makes it a habit rather than a need. E-mail gain access to is the most sought after consumption in the teenagers category whereas university teenagers and school students access internet largely for entertainment purpose. This provides us with an opportunity where we can catch the attention of this section towards a wonderful atmosphere that delivers access to the internet with in-house restaurant.

Various purposes of Being able to access the Internet

Source: I-Cube (2009)

Teenagers generating the growth of Internet

Source: I-Cube (2009)

Growth of Cyber Caf Culture

Source: I-Cube (2009)

Market Segmentation

SugarWeb has been conceived as a profitable opportunity which is impressive and sophisticated usually for the upper middle class customers and high end customers. It'll be considered as a pioneer in the business of internet services and espresso market in the area of Gomti Nagar, Lucknow. We have a strong perception inside our offering and it comes from the growing acceptance of espresso as a lifestyle drink and internet as a necessity (also a robust sociable networking tool). Considering the success of other coffee shops in the areas, we believe we have something different and special to provide to the clients from all walks of life and age range. Our customer marketplace is ranged between ages of 15-60.

We segregate the clients of SugarWeb into two wide groups

Mostly junior which is group acquainted with the Internet services and are regular users of public networking. They really want an appropriate and relaxing atmosphere abroad where they can meet up with online or offline friends more than a cup of coffee.

Other group in India is the customers who are IT-shy and are still trying to learn the value and operation of internet as something. These are adult people who can enjoy great coffee and enter the online community in an inviting atmosphere.

Apart from both of these categories of customers we split our marketplace into more specific segments including students and business people.

Potential Customers progress rate forecast

Market Needs

The recent and current market examination of the internet services and coffee shop usage uncovers that the chances are inside our favour. For the coffee use, the figures are expected to keep to grow at a well balanced rate of 5-6 % on a yearly basis. Also it would be the first cyber caf combined with a coffee shop in the region to be opened up at such a level of advancement and pleasure seeking. We imagine our first mover benefit will be a driver for acknowledgement. Over the time of 2-3 years we seek to build up the degrees of customer loyalty by giving excellent quality products with a great customer service. It will not be considered a self-service proposition. Customer care personnel will be hired to serve the customers at their best to ensure their satisfaction from service and enhance the degrees of customer retention and expansion.

Set-up Plan

"SugarWeb", is our cyber caf found in Gomti Nagar, Lucknow that provides a perfect place for the socially linked general public in a cultural gathering format and leisure. It provides our customers rich and fast access to the web in a totally relaxed ambience where in fact the customers can sit and relax. In addition, it targets the customers who wish to catch up with their friends and family members in a friendly place and revel in warm coffees.

We propose to put in initial investment through personal financing. The owners of business Anil Bhatia and Ritu Bhatia are prepared to invest amounts of Rs. 35, 00, 000 and Rs. 40, 00, 000. The primary investments will include purchase of the structure site land, purchase of computer and networking equipment and restaurant equipment. This may also be helped by an external personal debt amounting to total of Rs. 60, 00, 000 from our loan providers ICICI Lender.

SugarWeb will be designed as a limited responsibility company and both owners of the business Anil and Mrs. Ritu can be the primary shareholders. Both will share the gains and liabilities in the percentage of the capital purchases.

The two major sources of financing- personal capital investment and personal debt from ICICI will verify beneficial in starting the cyber caf with a restaurant. It will require around one and a half year to establish SugarWeb as a known face on the market with a distinguished product and service mixture provider. By the 3rd year our business will get a well balanced position and achieve the break-even. The atmosphere of the establishment can not only be casual and comfortable but also progressive since it amalgamates strategy and leisure.

SWOT Research for "SugarWeb"

Strengths

Distinguished offering of internet along with espresso.

Contemporary and ground breaking set-up.

Sound sources of funding.

Affordable prices.

Demand for caffeine is increasing at the speed of 5-6 percent annually in the local market. Residents are supportive of caf culture.

Business location is a developed metropolitan area where people have enough time, money and desire for socializing and extra cash over high speed internet and caffeine.

Weaknesses

Demand for espresso may reduction in harsh summers.

Local people is probably not as interested in access to the internet as the coffees.

Other nationwide and international caffeine shops in operation.

Opportunities

Lack of any major restaurant operating in the region of Gomti Nagar.

Differentiation based on quality products and services. Comfortable calming lounge format will get the potential customers who wish to spend quality time abroad.

Can successfully appeal to the young customers who love to socialize in public areas. SugarWeb will also focus on bringing in the students from near by Amity School, Lucknow.

Our caf will change from other opponents by adapting to local culture and by being innovative in offering dual caf-coffee combination.

It will also focus on the market of customers who prefer sophisticated places to meet.

Threats

Opening of an renowned restaurant providing free access to the internet.

New local entrants offering services at lower costs.

Financial Feasibility Analysis

SugarWeb covers its start-up costs including property rent, structure work, furniture, computers, internet lines, links, coffee making machines and related equipment. With the kind of capital investment we will be able to cover the major bills in the first yr and make use of the revenue in wages, business development and credit debt repayment.

The major bills include development of the caf lounge and internet providing musical instruments (notebook computers) and also printers, scanners and copiers. In the beginning we release the offer with 12 notebook computers, 2 printers, one scanner and copier.

On the caffeine product end, we will get started with one caffeine grinding machine, two espresso machines and other related equipment. We've provided the next table to show the break down of various initial expenditures.

Promotion Strategy

SugarWeb LLC will primarily promote its offerings by implementing Jedi Caf will apply an "appeal strategy" to provide the information to customers and build the buyer awareness and improve the product-service demand. Inside the years 2011, 2012 and 2013, SugarWeb proposes to get Rs. 89, 570; Rs. 98, 620 and Rs. 1, 05, 780 in its promotional efforts to ensure that the brand is acknowledged and well located as a unique offering. We will unveiling an marketing campaign on local radio and in the local newspapers and mags. SugarWeb will provide in-house promotional offers such as coupons to customers, devotion credit cards and free-drinks offers.

Business Concept Declaration in a glance

This is an overall summary of your feasibility research briefly presenting parts of Product, Target Market, Why SugarWeb?, USP, Management Team.

Product

SugarWeb offers a unique combo of internet and coffee in a cosy, friendly and pleasurable atmosphere. Customers will be provided internet over notebook computers alternatively than traditional desktops and high quality caffeine and speciality beverages. Set-up gives the feel of an relaxing lounge with sofas and seats.

Target Market

Mainly targets the customers from younger sections such as college teenagers and college or university students. Simply the target portion is the internet crazy and communal networking adoring people who will enjoy the idea of a espresso.

Why SugarWeb?

Internet usage keeps growing, but the cyber cafes are only a monotonous location to surf web with little or no pleasure. SugarWeb comes in with a glass of hot espresso for the clients in sofas with laptop computers. The atmosphere will be healing, cheerful and inviting.

USP

Unique offering of web and espresso in a public setting. Will also number special evenings focused on customers.

Management Team

SugarWeb is led by its cofounders Anil Bhatia and Ritu Bhatia. Anil can be an MBA (Marketing) graduate with hands on experience in marketing in catering sector, whereas Ritu is an MBA (Human tool management, India) graduate with experience in the B. com.

Also We Can Offer!

Other services that we offer

If you don’t see the necessary subject, paper type, or topic in our list of available services and examples, don’t worry! We have a number of other academic disciplines to suit the needs of anyone who visits this website looking for help.

How to ...

We made your life easier with putting together a big number of articles and guidelines on how to plan and write different types of assignments (Essay, Research Paper, Dissertation etc)