BUSINESS MODEL & FINANCIAL FEASIBLITY ANALYSIS
Part 1: Business Model
From prior feasibility studies (attached below), please form an illustration and description narrative of your business model. In practice, formats used for business models across industries and organization tend to be diverse. In the context of this the assignment the Barringer – Ireland Business Model is recommended.
Areas of Concern to Develop/ Test the Business Model
Some considerations in testing your business model may include, but are not limited to, the following, depending on the nature of your business:
What Customer Segments do we serve
What is your Value Proposition
What types of Customer Relationships
Which and how many Channels
What Key Activities do we Perform
What Key Resources (owned, leased, or barrowed)
Who are your Key Partners
How many and types of Revenue Streams
What is your Cost Structure
Product Pivot (if needed)
Customer Pivot (if needed)
Revenue Model Pivot (if needed)
Part 2: Financial Feasibility Analysis
Core question financial presentation should answer and illustrate:
WILL THIS BUSINESS MAKE A PROFIT?
In congruence with the proposed business model, please conduct a financial feasibility analysis to demonstrate the expected profitability of your proposed business. The purpose of this assignment is to test the money aspect of the business. This will determine if this is a viable a business that will lead to worthwhile, sustainable profits. This assignment will illustrate fixed and variable costs as well as expected gross and net revenues from projected sales of product/services. This should feature detail on the start-up cost (textbook 98-103 should help form perspective) and estimate ongoing financials in a consolidate balance sheet perspective ( text Chapter 8 will be helpful in this regard). Most any business would likely include, but not limited to, the following:
- Capital Requirements – How much cash and securities do we need to get started? Usually no less 20% cash would be required in most loan situations.
- Estimated Earnings – How will these earnings compare to similar businesses in the industry and geographic market? How much losses will be expected in the early phases while developing the company? What expenses are required? Are your expenses higher or lower than industry averages?
- Return on Investment (ROI) – How does your expect ROI compare to the Industry average? What is the normal return on an investment like this? How soon do you expect to make a return on investment?
In additional to financial sheet sheet appropriate for your business, the assignment should include a well-written, brief narrative on how the numbers were derived.