Michael E. Rithmire
There are countless numbers of new small business start ups each year and large number of those never survive for many reasons. Most small business owners clearly see the advantage of starting out on the right track from the very beginning (before the open their doors for business). Developing a business plan, measuring sales, and managing cash flow rank as the three highest priorities among small business owners. In order to develop a solid business plan and ultimately end up with a successful business, owners should first ascertain whether or not their business idea is even feasible. This article offers some suggestions for conducting an effective small business feasibility study.
What is a feasibility study?
There are four basic questions which must be answered by a small business feasibility study:
Upon answering these four basic questions, any business owner should be able to develop a success oriented business plan.
A feasibility analysis can and should attempt to answer several additional questions to support the four critical questions stated above. A feasibility analysis could also explore issues such as :
The main thing to keep in mind when conducting a feasibility analysis is to try and be as objective about your business as possible. It is better to find out early that there just isn’t a sustainable market for your great idea than it is to be forced to terminate your business after making a substantial investment only to learn that better up front planning would have prevented this loss.
Internet Resources to help guide you through a feasibility analysis
Coastal Enterprises, Inc. http://www.ceimaine.org/business/plan/feasible.htm
CEI was formed in Maine in 1977 as a nonprofit community development corporation in response to a need to mobilize capital and invest in job-generating small businesses. CEI provides financing and technical assistance to natural resource-based industries, innovative, job-generating manufacturers, and small enterprises, including women in business, and family and center-based child care providers, and develops affordable housing. This organization provides small business assistance and some good down-to-earth advice to entrepreneurs planning to start a small business.
Claritas offers specialized services to businesses needing demographic information for virtually any zip code in the United States. As stated earlier, understanding the market is a key element of a business feasibility study and Claritas is an excellent starting point to gather this type of information.
Netpreneur Exchange
http://www.netpreneur.org/core.htmlThe Netpreneur Exchange is a non-profit organization serving the needs of new and established small businesses. In addition to serving as an information conduit on a variety of topics, Netpreneur serves a starting point to link entrepreneurs to a well spring of small business related resources.
The Small Business Administration (SBA)
http://www.sbaonline.sba.gov/The U.S. Small Business Administration (SBA) was created by Congress in 1953 to help America's entrepreneurs form successful small enterprises. Today, SBA's program offices in every state offer financing, training and advocacy for small firms. These programs are delivered by SBA offices in every state, the District of Columbia, the Virgin Islands and Puerto Rico. In addition, the SBA works with thousands of lending, educational and training institutions nationwide. The SBA is an excellent site for small business resources in general.