10 Questions
What is one way to assess demand for an idea on a landing page?
By tracking the number of people who click on a text ad and enter their e-mail address
What is the purpose of an industry/target market feasibility analysis?
To assess the overall appeal of the industry and target market for a proposed business
Which online tool can be used to assess demand for a new product or service?
All of the above
What is a target market?
A small portion of the industry that a firm plans to target
What is an example of a site that provides feedback on business ideas?
Foundersuite
What is industry attractiveness?
A component of industry/target market feasibility analysis
Why is it important to assess demand for a new product or service?
To determine if there is a market for the product
What is an example of a Q&A site that can be used to assess demand for a new product or service?
Quora
What is the main goal of concept testing?
To assess demand for a new product or service
What is an example of a market research tool that can be used to assess demand for a new product or service?
All of the above
Study Notes
Resource Sufficiency
- Critical resources, such as affordable office space, lab space, manufacturing space, or key management employees, can make or break a new business venture.
- Availability of contract manufacturers or service providers, intellectual property protection, and favorable business partnerships are also crucial.
Financial Feasibility Analysis
- It is the final component of a comprehensive feasibility analysis.
- Components of financial feasibility analysis include:
- Financial Performance
- Total Start-Up Cash Needed
- Overall Financial Attractiveness of the Proposed Venture
Total Start-Up Cash Needed
- Refers to the total cash needed to prepare the business to make its first sale.
Overall Financial Attractiveness of the Proposed Venture
- Financial factors associated with promising business opportunities include:
- Steady and rapid growth in sales during the first 5 to 7 years in a clearly defined market niche.
- High percentage of recurring revenue.
- Ability to forecast income and expenses with a reasonable degree of certainty.
- Internally generated funds to finance and sustain growth.
- Availability of an exit opportunity for investors to convert equity to cash.
First Screen
- A template for completing a feasibility analysis, used to determine the feasibility of a business idea.
- If a business idea passes the first screen, the next step is to complete a business plan.
Product/Service Demand
- Online tools can be used to assess demand, such as:
- Google AdWords and landing pages.
- Sites that provide feedback on business ideas (e.g. Foundersuite, Quirky).
- Market Research (e.g. CrowdPicker, Google Trends).
- Online Surveys (e.g. Survey Monkey, Google Consumer Surveys).
- Q&A Sites (e.g. Quora, Stack Overflow).
Industry/Target Market Feasibility Analysis
- Purpose: to assess the overall appeal of the industry and the target market for the proposed business.
- Industry: a group of firms producing a similar product or service.
- Target Market: the limited portion of the industry the business plans to target.
- Components of industry/target market feasibility analysis include:
- Industry Attractiveness
- Target Market Attractiveness
Test your knowledge of the critical resources and financial feasibility analysis required for a new business venture to succeed.
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