GST 203 Feasibility & Investment Decision Making PDF

# GST 203: FEASIBILITY AND INVESTMENT DECISION MAKING ## Business Concept * A business concept is a bridge between an idea and a business plan. * It focuses one's thinking so that the entrepreneur can identify the specifics of his/her proposed venture. * It helps in converting an idea into a bus...

# GST 203: FEASIBILITY AND INVESTMENT DECISION MAKING ## Business Concept * A business concept is a bridge between an idea and a business plan. * It focuses one's thinking so that the entrepreneur can identify the specifics of his/her proposed venture. * It helps in converting an idea into a business concept by thinking about how the product or service will be sold and who will buy it, the benefits of the product or service, how it is differentiated from similar ones, and methods of delivery. * It helps unearth critical components of a venture and begins research into key factors. * As the business idea takes a form as a concept statement, the entrepreneur can evaluate the business more effectively for potential challenges and pitfalls. * It enables the founder to concisely describe the business to suppliers, customers, lenders, and resource team members. * Examples: * "I want to start a management consulting company." * "I plan to start a management consulting company that provides strategic planning services to mid-sized businesses in the Southeast. Each consulting team, tailored to meet the unique needs of the client, will provide assessment and planning services to help clients improve efficiency and institute processes for innovation and change, resulting in cost reductions and sales increases." * The second statement is better than the first as it provides more information about the business. ## Questions to Answer When Describing a Business Idea 1. What is my product/service? 2. What does my product/service do? 3. How is it different or better than other products/services? 4. Who will buy the product/service? 5. Why will they buy the product/service? 6. How will the product/service be promoted and sold/offered? 7. Who are my competitors? ## Difference Between Industry & Market Analysis * An industry serves a market. * An industry is mad up of a top tier of companies that produce and sell products and services to a target customer. * A market is made up of individual consumers. * Industry analysis attempts to interpret the overall relevance of a particular industry to its market. * Investors use industry analysis to determine potential profits. * Examples: * An industry that is losing its dominance to a new technology, for example, is not a good investment growth prospect. * Industry analysis also examines the internal forces in the industry such as manufacturing technology, materials sourcing and capacity to supply the demands of wholesale and retail distribution. * Minimal product differentiation indicates an industry at risk of consuming itself in pricing wars to attract customers. * Competition among companies tends to keep an industry output relevant to its market because hot competition forces companies to be more aggressive in their market analysis, and production technology determines the cost of production. * Technologically advanced companies are more able to control their costs and present their products at prices the consumer wants. * Market Analysis examines the market demand in relation to prices and product offerings, using consumer demographics and buying habits to identify trends. * Market analysis and industry analysis are both used by investors and corporate managers in the projection of corporate financial performance. * The market analyst's job is to project potential problems, such as creating a product that no one wants to buy, and redirect company efforts toward products that will do better in the marketplace. * Industry-leading companies use market analysis in planning the details of product lines that have a better chance of success because they more directly satisfy market demands. * A market analyst also tracks how prices of products rise and fall according to demand and follow product production volume, a factor that can limit profit margins. ## Financial Analysis (Cash Flow) * Cash flow is the anticipation of cash as it flows into and out of the company. * The cash flow statement is a business document which blends the balance sheet and income statement together in order to display how cash has come into and gone out of your business. * To have a full picture of a business' financial performance, the income statement, the balance sheet and the cash flow statement must be carefully examined. * The income statement shows the sales and profitability of your business for a specific period of time, while the balance sheet gives you a snapshot of your overall financial condition at a point in time. ### Why Cash Flow Matters? 1. The cash flow statement is a tool to assist in financial decision making. 2. Companies record transactions when they occur which is why the cash flow statement is helpful. 3. The cash flow statement determines whether a company has a "durable competitive advantage." 4. As a means to a kind of self-examination, an honest assessment of your financial health can reveal serious red flags in your business and it might even save it. 5. The information contained in the cash flow statement can give you a clear indication your liquidity. ### How to Read Cash Flow: * **Operations:** Shows how much money you are generating from regular operations - from the basic fundamental production and sales of goods and/or services. * **Investing:** Shows whether stock issuances are out pacing or lagging stock repurchases. * **Financing:** Shows whether you are currently investing cash in the future growth of the business through new facilities or other capital expenditures. ### Record Keeping and Cash Flow in Small Scale Business * A successful business rests on sound record keeping practices and solid cashflow. * Without good records it is impossible to determine the financial condition or profitability of a business. * The importance of proper record keeping requirements, planning and cash flow. * Many small business owners are very knowledgeable about their accounting procedures and quite adept in analyzing their financial records and statements. ### Reasons for Financial Record Keeping: 1. Complete and accurate financial record keeping is crucial to your business success. 2. Good records provide the financial data that help you operate more efficiently, thus increasing your profitability. 3. Accurate and complete records enable you, and your accountant, to identify all your business assets, liabilities, income and expenses. That information, when compared to appropriate industry averages, helps you pinpoint both the strong and weak phases of your business operations. 4. Good records are essential for the preparation of current financial statements, such as the income statement (profit and loss) and cash-flow projection. These statements, in turn, are critical for maintaining good relations with your banker. They also present a complete picture of your total business operation, which will benefit you as well. 5. Good records are critical at tax time. Poor records could cause you to underpay or overpay your taxes. In addition, good records are essential during an IRS audit, if you hope to answer questions accurately and to the satisfaction of the IRS. ### How Much Income Are You Generating? * How much income are you generating now and how much income can you expect to generate in the future? * How much cash is tied up in accounts receivable (and thus not available to you) and for how long? * How much do you owe for merchandise? Rent? Utilities? Equipment? * What are your expenses, including payroll, payroll taxes, merchandise, advertising, equipment and facilities maintenance, and benefit plans for yourself and employees (such as health insurance, retirement, etc.)? * How much cash do you have on hand? How much cash is tied up in inventory? What is your actual working-capital budget? * How frequently do you turn over your inventory? * Which of your product lines, departments or services are making a profit, which are breaking even, and which are financial drains? * What is your gross profit? What is your net profit? * How do all of the financial data listed above compare with last year - or last quarter? How do they compare with the projections in your business plan? * How do all of these financial data compare with those of your competitors? With those of the industry? ## Cash Flow Planning * Small business owners must prepare for all future events and market changes. * Failure to properly plan cash flow is one of the leading causes for small business failures. * Experience has shown that many small business owners lack an understanding of basic accounting principles. * Knowing the basics will help you better manage your cash flow. * The operating cycle is the system through which cash flows, from the purchase of inventory through the collection of accounts receivable. * It measures the flow of assets into cash. * If you are operating cycle from the purchase of supplies through the collection of receivables totals 180 days, this is the amount of time which you must finance. * Since capital providers, such as lenders, require a return on their investment, this financing will, of course, bear interest. The longer your operating cycle, the higher your financing cost will be. * It is important to analyze your operating cycle and forecast your cash needs to minimize the amount which must be financed without running short of cash. * Cash flow analysis should show whether your daily operations generate enough cash to meet your obligations and how major outflows of cash to pay your obligations relate to major inflows of cash from sales. * As a result, you can tell if inflows and outflows from your operation combine to result in a positive cash flow or in a net drain. * Any significant changes over time will also appear. * Understanding this will lead to better control of your cash flows and will allow adequate time to plan and prepare for the growth of your business. ### How to Maintain Positive Cash Flow * It is best to have enough cash on hand each month to pay the cash obligations of the following month. * A monthly cash-flow projection helps to identify and eliminate deficiencies or surpluses in cash and to compare actual figures to past months. * When cash-flow deficiencies are found, business financial plans must be altered to provide more cash. * When excess cash is revealed, it might indicate excessive borrowing or idle money that could be invested. * The objective is to develop a plan that will provide a well-balanced cash flow. ### How to Achieve a Positive Cash Flow 1. **Collecting Receivables**: Actively manage accounts receivable and quickly collect overdue accounts. Revenues are lost when a firm's collection policies are too passive. The longer your customer's balance remains unpaid, the less likely it is that you will receive full payment. Conversely, the faster you collect on your receivables, the shorter your operating cycle will be. 2. **Tightening Credit Requirements**: As credit and terms become more stringent, more customers must pay cash for their purchases, thereby increasing the cash on hand and reducing uncorrectable accounts. While tightening credit is helpful in the short run, it may not be advantageous in the long run. Looser credit allows more customers the opportunity to purchase your products or services. Any consequent increase in sales should be measured against a possible increase in uncorrectable accounts. 3. **Adjusting the of products price**: Many small businesses fail to make a profit because they erroneously price their products or services. Pricing is the critical element in achieving a profit and maintaining positive cash flow. Before setting your prices, you must understand your product's market, distribution costs and competition. Remember, the marketplace responds rapidly to technological advances and international competition. Monitor all factors that affect pricing on a regular basis and adjust as necessary. 4. **Taking out short-term loans**: Loans from various financial institutions are often necessary for covering cash-flow problems. Revolving credit lines and equity loans are common types of credit used in this situation. 5. **Increasing your sales**: Increased sales would appear to increase cash flow. However, if large portions of your sales are made on credit, when sales increase, your accounts receivable increase, not your cash. Meanwhile, inventory is depleted and must be replaced. Because receivables usually will not be collected until, say, 30 days after sales, a substantial increase in sales can quickly deplete your firm's cash reserves. A computer can facilitate tracking this critical data, as well as speed the time required to consider "what if" scenarios. 6. **Managing your expenses**: Watch your expenses carefully. It makes sense to pay early if your suppliers offer a discount for early payment. If no discount exist and the supplier allows you 30 days to pay, take advantage of the 30 days and do not pay in 5. However, beware of penalties for late payment and the potential impact on your credit rating. You should monitor your expenses to make certain they are necessary and reasonable in amount. 7. **Your cash reserve**: You should always keep enough reserve cash on hand to cover expenses and as an added cushion for security. However, it is unwise to keep more money on hand than is necessary. Excess cash should be invested in an accessible, interest-bearing, low-risk account, such as a savings account, short-term certificate of deposit or Treasury bill. Keeping excess cash on hand limits both your growth and the return on your investment. ### Important Tools for a Small Business * **Good records**: Are essential for the preparation of current financial statements, such as the income statement (profit and loss) and cash-flow projection. These statements, in turn, are critical for maintaining good relations with your banker. They also present a complete picture of your total business operation, which will benefit you as well. * **Cash flow projections**: Will help answer important questions about the company's financial future and provide direction. The failure to make proper projections, even if only informally, reduces the potential for long-term success. ### Basic Record Keeping System * A basic record keeping system, whether on paper or an off-the-shelf computer software program, should be simple to use, easy to understand, reliable, accurate, and consistent, designed to provide information on a timely basis. It generally needs the following records: * Accounts receivable * Accounts payable * Payroll * Petty cash * Inventory ### Record Keeping with a Computer * The computer makes it easy to develop cash-flow projections and many other useful financial-planning tools. * A good financial-management package will enable you to review projected inflows and outflows of cash from month to month or year to year. ### Record Keeping with Paper-Based Tools * A file folder holds loose papers together for organization and protection. * Hanging folders are used to group several file folders together and are often stored in a filing cabinet. * An accordion folder opens like an accordion on top to reveal compartments for storing documents. ## Product Analysis * A product analysis is a document which contains a proper and thorough outline of the merits and drawbacks of a particular product up for review. * It is conducted by a company, an external agency, investors or any individual or group with a vested interest in the performance of the product. * It may be carried out before or after the release of the product. ### Product Analysis Template * Before starting a new business a business man conduct an analysis about product of competitor that are used and sale out in the market. * The format which is used to prepare is called product analysis template. * It helps to find out qualities, and weaknesses of market product. * Then a new product is dispatch in market with the new feature and benefit along with the more uschi life that help to capture the existing market. * Product analysis highlighted all the point that is focused to prepare new product. * This is an example of a product analysis document prepared by NIFEM Foods and Beverages Pvt. Ltd. for its product Herbal Ice Tea: * Date of product analysis: 23rd June 2012 * Purpose of product analysis: * To ensure that the product is quality tested before being launched in the market on the 23rd of August 2012. * To outline its flaws and areas where there is a scope for improvement. * Nature of product: The product in question has been in development since 2011. It is summer beverage targeted at youngsters and college campuses, designed with herbal ingredients like mint and basil, and it contains no added preservatives. * Product scores on: * The product is set to make an instant splash in the F and B market due to the brand name of the company and also due to first player advantages. Since there are no comparable Ice Tea beverages in the market currently, our product is hoped to create a buzz. * The product is priced attractively at 5$ per bottle making it affordable for the student. The product is completely prepared from organic ingredients which make it a substance of choice for the present-day health conscious youngsters. ## Liquid Soap Ingredients * Like hot and cold process soap, there is a lye component and an oil component. * **Lye:** Sodium Hydroxide is used to make hard bar soap while potassium hydroxide is used to make liquid soap. * Potassium hydroxide is harder to find and comes in flakes, not beads. * The flakes are easier to work with, but are still caustic, so gloves and protective eyewear must be used. * You will also need a small amount of borax. * The other ingredients include, water, coconut oil, olive oil, essential oils and colours. * You can source all of these ingredients organically except the potassium hydroxide. * **Saponification:** Keep in mind that all of the potassium hydroxide is eliminated during the soap making process through a reaction called saponification. * It is no longer caustic at this point. ## Equipment Needed for Liquid Soap: * Slow cooker * Stick blender * Quart jar * Plastic stirring spoons * Kitchen scale * Plastic potato-masher * Large jar for the resting period * Thermometer * Ladle to move your soap * Additional water for diluting the soap paste and mixing with the borax for neutralizing the soap. ## Liquid Soap Recipe: * 16.5 ounces olive oil (find unrefined organic olive oil here) * 7 ounces coconut oil (find unrefined organic coconut oil here) * 5.5 ounces potassium hydroxide (find it here) * 16.5 ounces distilled or filtered water (find the best water filtration systems here) * 40 ounces distilled or filtered water * 3 ounces borax (find it here) * 6 ounces distilled or filtered water * Essential oils, optional (find 100% pure essential oils here) colour which is optional ## The Process of Making Liquid Soap 1. Weigh your olive oil and coconut oil and place them into the slow cooker. Turn on low 2. In the quart jar, weigh your water. Slowly add the weighed potassium hydroxide, stirring gently as its added. Don't be surprised at any sounds or reactions you may hear. (Potassium hydroxide reacts slightly differently than sodium hydroxide in water.) 3. When the potassium hydroxide is all mixed in and the solution appears clear, add your water/potassium hydroxide mixture to the oils. Don't worry about the temperature. 4. Carefully stir by band for 5 minutes to be sure all the oils come into contact with all of the potassium hydroxide. 5. After 5 minutes, begin stirring with the stick blender. It could take up to 30 minutes to achieve "trace." (In soap making, trace is normally when the mixture is thick like vanilla pudding, but with potassium hydroxide trace might look more like applesauce.) 6. The mixture might look like it's going to separate, but don't stop until you have trace. 7. Cook in the slow cooker for about 30 minutes with the lid on. Check after 30 minutes. If it's separated, stir it back in. 8. Check every 30 minutes for 3-4 hours. 9. During the 3-4 hour cooking stage, your soap mixture will go through several stages. They will look like this: * Trace-thick pudding to applesauce * Custard-like with small bubbles * Watery mashed potatoes * Taffy * Chunky to creamy petroleum jelly * Translucent petroleum jelly 10. Each stage could take 30 minutes or longer. 11. Now you can ladie your soap into a large jar. I use a gallon size glass jar for this. Secure the lid and leave it for a week or so. This allows any solid particles to settle to the bottom. When your soap is clear, pour it into smaller bottles, label and enjoy! Just be sure not to disturb the sediment on the bottom or you'll have to wait for it to settle again. ## Eight Simple Steps For New Product Development ### Step 1: Idea Generation * The development of a product will start with the concept. * The rest of the process will ensure that ideas are tested for their viability, so in the beginning all ideas are good ideas (To a certain extent!) * Ideas can, and will come, from many different directions. * The best place to start is with a SWOT analysis, (Strengths, Weaknesses, Opportunities, and Threats), which incorporates current market trends. * This could be: * Under-taking market research * Listening to suggestions from your target audience * Encouraging suggestions from employees and partners * Looking at your competitor's successes and failures ### Step 2: Idea Screening * This step is crucial to ensure that unsuitable ideas, for whatever reason, are rejected as soon as possible. * Ideas need to be considered objectively, ideally by a group or committee. * Specific screening criteria need to be set for this stage, looking at affordability and market potential. * These questions need to be considered carefully, to avoid product failure after considerable investment down the line. ### Step 3: Concept Development & Testing * You need to ask the people that matter - your customers. * Using a small group of your true customer base - those that convert - the idea need to be tested to see their reaction. * The idea should now be a concept, with enough in-depth information that the consumer can visualise it. * Do they understand the concept? * Do they want or need it? * This stage gives you a chance to develop the concept further, considering their feedback, but also to start thinking about what your marketing message will be. ### Step 4: Business Analysis * Once the concept has been tested and finalised, a business case needs to be put together to assess whether the new product/service will be profitable. * This should include a detailed marketing strategy, highlighting the target market, product positioning and the marketing mix that will be used. * This analysis needs to include: whether there is a demand for the product, a full appraisal of the costs, competition and identification of a break-even point. ### Step 5: Product Development * If the new product is approved, it will be passed to the technical and marketing development stage. * This is when a prototype or a limited production model will be created. * This means you can investigate exact design & specifications and any manufacturing methods, but also gives something tangible for consumer testing, for feedback on specifics like look, feel and packaging for example. ### Step 6: Test Marketing * Test marketing (or market testing) is different to concept or consumer testing, in that it introduces the prototype product following the proposed marketing plan as whole rather than individual elements. * This process is required to validate the whole concept and is used for further refinement of all elements, from product to marketing message. ### Step 7: Commercialisation * When the concept has been developed and tested, final decisions need to be made to move the product to its launch into the market. * Pricing and marketing plans need to be finalised and the sales teams and distribution briefed, so that the product and company is ready for the final stage. ### Step 8: Launch * A detailed launch plan is needed for this stage to run smoothly and to have maximum impact. * It should include decisions surrounding when and where to launch to target your primary consumer group. * Finally in order to learn from any mistakes made, a review of the market performance is needed to access the success of the project. ## Fish Farming * Raising fish, also known as aquaculture, can be done on a small scale in backyard ponds, pools, or tanks. * Needs for raising fish for your self-sufficient and survival food include the best fish breeds, equipment, and care? * Fish are relatively easy animals to farm. * They need less space per animal than other kinds of livestock. * Aquaculture can be done in more places. * Fish and fish protein are in great demand worldwide, and the need for more fish production is speedily growing. ### Getting Start with Aquaculture * It requires a good body of water. * Your lake must contain plenty of weeds, both in the water and around it. These plants will provide protection, food and shade for your fish. * Also many inseets, small fish and other critters that fish devour on must have vegetation for their life-cycle. * Once the water, plants and foodstuff sources have been established, it is time to introduce your fislı. ### How to Raise Fish * You can raise fish in a Farm Pond, in Tanks and Aquarium Heaters. * Typical fish grown by fish farms include salmon, catfish, tilapia, cod, carp, trout and perch. * The trout is the finest fish for a novice to start up with. * It's among the strongest of the fish raised on a fish farm and they have got an excellent market value. ### Fish Eggs * Fish eggs need gentle handling and care if they are to prevail. * Eyed ova are the easiest and more dependable way, especially for the first-timer. * Many fish farmers start with ova that are already fertilized. * These can be bought quite readily and arrive when they are almost ready to hatch. * Newborn fish are called "alevins." * At first, these tiny fish don't need any food. They feed off of their yolk-sac and will begin to feed on real food in about six weeks, later feed on processed food meal at least four times daily. * As they grow and become known as "fry", they required more varied, natural diet that includes insects, small fish & crustaceans in order to grow big and healthy. * Processed food can add to a natural diet, but it's no alternative. ### Moving Fish * After a few months, the fish will be ready to move into their new home. * Some aqua culturists breed their fish to this point in rearing ponds away from the main pond and the fish will need to be moved. Others use hatching trays in the large pond and the fish are allowed to swim out when they are large enough. They should be thinned out as they grow. * Remove the small and weak ones, and put them in another area. * Keeping the fish in the water with larger fish might mean they will be eaten one another. With just a medium size pond, you could even begin your own hatchery, or sell fresh fish to shops and restaurants. * Also keep in mind that variety in your ponds is essential to a healthy fish population. Be careful about what you introduce. Don't over-stock your pond with any one kind of fish for a healthy balance. ## Methods of Raising Fish * **Intensive aquaculture** is space dependent, and utilizes large ponds. * **Extensive aquaculture** utilizes tanks and requires a great deal of management to produce a lot of product in a small space. * Raising fish at home can follow either of these strategies, but will probably be lower production than commercial systems in order to reduce the amount of equipment and the amount of management that goes into it. ## Hatching Trays * Hatching trays can be constructed of perforated zinc fairly easily. * Make them 1½ inches deep, and the ova will hatch out well in them. * The size of hatching tray you will require will depend on the size of box you will suspend them in. * When in operation in the water, the trays are loaded with ova and suspended in the boxes. * They have to be positioned so that a nice current of water can move through them. * Before you put ova into these boxes, you should allow them to sit in the pond. * This will ensure that nothing contaminates the area when the eggs are introduced. ### Why You'll Need Shade Trees * Young fish and eggs need to be protected from the sun and predatory animals. * That's why you'll need to keep your rearing ponds near shady trees. * It's also quite important to have as much tall grass and weeds as possible growing around the banks. ### Netting * Netting can be put over rearing ponds to keep hungry birds out. * But you will have to keep a look out over your brood because Birds are smart. * The rearing boxes need to already be resting in the ponds for several weeks before the ova are ready. * The edges of the boxes will be about six inches above the water. * The trays are hung inside the rearing boxes with the water level coming up to the top edge. * This is where your ova will be calling home until they hatch and are strong enough to swim out into the rearing box. ### The Ova * The ova will need to be carefully washed before they can be added to the hatching tray. * The technique for cleaning the ova is quite simple. * A large container is filled with water and ova, the water is drained off and clean water added. This process is repeated until the water runs clear. ### Cleaning the Ova * After cleaning, the ova can be placed on the hatching trays. * This can be done by tenderly ladling the ova, a few at a time, out of the cleaning container. Hold the ladle very close to the tray and empty the ova as gently as possible. Never pour the ova from a height, the impact will certainly kill them. ### Spacing the Ova * Ova will hatch at a far higher rate if they are distributed into a single layer. * This is a very delicate procedure and requires a gentle touch. * A feather is just the tool for the job. * Gently running the feather over the ova will spread them out with minimal damage. ### Dead Ova * Despite taking all the necessary precautions, some of the ova will die. They can be easily identified by their white or opaque colour. * Dead eggs must be removed from the hatching trays immediately. * Leaving them in the trays can lead to fungus growth that can damage your entire stock. ### Water Shrimps * A natural way to clear out dead ova is to introduce fresh-water shrimps to your hatching trays. * They will only feast on the dead ova and will not damage live ones. * These mini aquaculture housekeepers will clear out animal and plant debris in the water too. ### Keeping a Lid on the Reaing Boxes * Keeping a lid over the rearing boxes will also help to protect ova from fungus growth. * Fungus loves light and a lid will cut off the light and keep growth to a minimum. * A lid is also an excellent way to protect ova and young fish from predators. ### Hatched Fish * In a short time, the first fish will begin to hatch. These young fish, also known as an alevin, will have a large bag on their underside. This is the yolk sac. * The fish will require no food to start with. * They will feed off of their sac for the next month and a half or so. * Eventually, the do it yourself fish farmer will see that some of his alevins have begun to move away from the pack at the bottom of the hatching trays. * They'll start to swim up towards the current. * Now is the time to start feeding them finely processed meals. * Their yolk sacs are almost gone now and they are moving on to the next stage of their lives. ## Raising Fish for Survival Food * Due to the overwhelming evidence of chemicals and impurities in foreign raised fish, raising fish at home is a safer alternative than buying fish from the commercial aquaculture and fish farm. ## Fish Farming in Back Yard Ponds * Farm ponds are an ideal place to raise fish for food * If you want to ramp up production, they can be fed a commercial diet that meets your feeding philosophy. * For example, there are some fine organic fish feeds available or choose a less managed approach and just let your fish eat what your pond produces. * A laissez faire strategy will require a lighter stocking density and a slower grow out but will produce virtually free food. ## Raising Fish in Tanks * Blue Tilapia a good breed for backyard * **Home fish farming in tanks** ## Feasibility Study * A Feasibility Study is a formal project document that shows results of the analysis, research and evaluation of a proposed project and determines if this project is technically feasible, cost-effective and profitable. * The primary goal of feasibility study is to assess and prove the economic and technical viability of the business idea. * A project feasibility study allows exploring and analyzing business opportunities and making a strategic decision on the necessity to initiate the project. * For each project passing through the Initiation Phase, a feasibility study should be developed in order for investors to ensure that their project is technically feasible, cost-effective and profitable. *A thorough feasibility study can give you the right answer before you spend money, time and resources on an idea that is not viable. * It must therefore be conducted with an objective, unbiased approach to provide information upon which decisions can be based. ### Feasibility Study Methods * Whether a feasibility study last for six months or six days, it should follow a four-step listed below: ### Steps Involved in Feasibility study: * Feasibility studies can take on different forms, depending on their contexts. * In large enterprises, paschools, and government agencies, a feasibility study could take months or even years of work in conjunction with outside consultants. * On the other hand, a small business with the right connections and resources can perform a feasibility study over the course for few days. * Regardless of the timeframe involved, the project manager in charge of the feasibility study must remain impartial as he or she handles four critical tasks: ### 1. Examine the Market * The first step to an effective feasibility study method involves a critical analysis of the competitive landscape for a product or service. * Many first-time entrepreneurs make the mistake of assuming that their product has no competition. * In reality, any other way in which a customer allocates money, time, or attention can be viewed as competition. * The feasibility study should paint a realistic picture of the likelihood that enough customers will be satisfied to result in a sustainable offering. ### 2. Review Technical Requirements * Understanding the needs of the marketplace does not always guarantee the ability to meet customers' expectations. * Including this analysis in the feasibility study method puts the overall requirements for a successful project into the proper context. * In many cases, a study can help determine whether the project sponsor with require more resources internally or whether an outside vendor or partnership can handle the tasis more effectively. ### 3. Explore the Business Model * Having assessed the current market need and a team's ability to execute, a feasibility study can look at the long-term viability of the overall business model. * This feasibility study method relies heavily on tools like scenario planning to ensure long term success. * Project managers can discover whether the business model actually offers enough profit potential to make the initiative worthwhile. * Likewise, study administrators can examine whether the new product or service under consideration requires such a significant change as to make it untenable within a business. ### 4. Look for an Escape Route * Investors like to know that they will make a profit, and they want to have a strong idea about when they can cash the check. ### 5. Common Feasibility Study Considerations * **May be required:** When there is little or no brood being raised in the colony, the drones may be destroyed. There about 300 to 500 drones in a colony. * **The female bees are two kinds:** In each colony there is usually only one queen. The queen is the only fully developed female. She lays all the fertile eggs and she's called the "mother" of the bees. If she lays between 1,500 to 3,000 eggs a day, she is a good queen. The other female bees in the colony are workers. They exist in large number up to several thousands. They may be between 60,000 and 80,000 workers in a colony's population. These workers are females whose ovaries do not develop but their bodies have been adapted to perform different works in maintaining the colony. The eggs laid by worker is not fertile and hatch into drones. Thus, the worker bee is an imperfect female. ### Requirements of Bees: 1. Flower/food (nectar, fruits juice and pollen) 2. Water 3. Home ### Food of Honey Bee: * Honey bees eat nectar, fruit juices and pollen from flowers. Nectar and juice provides carbohydrates needs of bees while pollen provides the protein parts of the diet. The queen of the bees is usually fed with pollen and nectar against the scarcity (dearth period). * Nectar is stored as honey. It is therefore important for the bee keeper to know how to only harvest the 'surplus' honey above the bees requirement. If the beekeeper harvest all the honey from the colony leaving none for the bees to feed on, the bees will die of starvation or migrate from the colony. Bees also need water for drinking and cooling the hives. ### Time to Feed Bees Sugar Syrup * When inviting wild swarm to colonize your hive, you need to fee them with sugar syrup in one to three days. ### Types of Bees * There are many different types of bees, but we are only concerned with bees that makes honey which are called honey bees. * There are also different species