CITY OF PLEASANTON JOBS

Here’s to your success! Last week we talked about a few of the ways to test the feasibility of a business idea to help determine if the idea really had merit or just looked good on the surface. To recap, I said don’t bet the farm on the opinions of friends and family, consult with knowledgeable business experts, and conduct a SWOT (Strengths, Weaknesses, Opportunities, and Threats) Analysis. This week let’s take it a step further and talk about the creation of a formal Feasibility Plan which will help you determine the true feasibility of your big business idea.

A feasibility plan is just that: a written plan that is created for the sole purpose of validating the feasibility of a business idea. Some call it a “Go/No Go” plan, because the results of a well-constructed feasibility plan will tell you whether or not the idea has a chance for success (that’s a Go) or if this idea would be best left on the drawing board (that’s a No Go).

1. Many entrepreneurs would rather have their front teeth pulled without anesthetic than go to the time and trouble of creating a feasibility plan; often because they are afraid of what it will reveal.
2. The last thing an entrepreneur (particularly one without prior business experience) wants to hear is that their business idea won’t fly, so they put on blinders and resist testing the idea using real world information. In an entrepreneur’s head every idea is a good one, every hit is a home run, and every story ends with the hero sitting on a beach drinking Mai Tai’s and lighting cigars with hundred dollar bills. No one wants to imagine the story ending any other way and many would rather bury their heads in the sand and hope for the best than to test out their ideas before execution. Trust me. I’ve been there, done that, got the T-shirt and paid the bill. Not a smart thing to do.

Writing a detailed feasibility plan will force you to take off the rose colored glasses and look at the idea honestly and entirely. It will help you define your market, identify your customers, potential partners and competitors, recognize opportunities and warn of potential threats. Starting a business without testing its feasibility is like teaching your kids to swim by chucking them in the lake. It might be fun to try with your sister’s kids, but not your own… just not a good idea.

Writing a feasibility plan is much like writing a mini-business plan. The end result should be a formal document that includes an executive summary, a product or service plan, a marketing plan, a price and profitability plan, and a plan for further action. Let’s take a look at each section.

Executive Summary.

The Executive Summary is the first section of the plan and sums up the high points detailed throughout the remainder of the plan. The Executive Summary should include a brief, but thorough description of the idea, an overview of the products or services to be offered, the target market and target customer, startup costs, and pricing and profitability. Keep the Executive Summary to one page. I have seen Executive Summaries that rambled on for pages and pages. Keep each topic to one or two tight paragraphs and go into further detail in the individual sections of the plan.