"First Screen" for Preparing Effective Business Plans

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First Screen
From “Preparing Effective Business Plans” by Bruce R. Barringer Part 1: Strength of Business Idea For each item, circle the most appropriate answer and make note of the (-1), (0), or (+1) score. Low Potential (-1) 1. Extent to which the idea: x Takes advantage of an environmental trend x Solves a problem x Addresses an unfilled gap in the marketplace Weak Moderate Potential (0) Moderate High Potential (+1) Strong

2. 3.

Timeliness of entry to Not timely market Extent to which the idea “adds value” for its buyer or end user Extent to which the customer is satisfied by competing products that are already available Degree to which the idea requires customers to change their basic practices or behaviors Low

Moderately timely Medium

Very timely High

4.

Very satisfied

Moderately satisfied

Not very satisfied or ambivalent

5.

Substantial changes required

Moderate changes required

Small to no changes required

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall

Part 2: Industry-Related Issues Low Potential (-1) 1. 2. 3. 4. Number of competitors Stage of industry life cycle Growth rate of industry Importance of industry’s products and/or services to customers Industry operating margins Many Maturity phase or decline phase Little or no growth “Ambivalent”

Moderate Potential (0) Few Growth phase Moderate growth “Would like to have”

High Potential (+1) None Emergence phase Strong growth “Must have”

5.

Low

Moderate

High

Part 3: Target Market and Customer-Related Issues Low Potential (-1) Moderate Potential (0) 1. Identification of Difficult to identify target market for the proposed new venture Ability to create “barriers to entry” for potential competitors Purchasing power of customers Ease of making customers aware of the new product or service Growth potential of target market Unable to create May be able to identify

High Potential (+1) Identified

2.

May or may not be able Can create to create Moderate Moderate High High

3. 4.

Low Low

5.

Low

Moderate

High

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall

Part 4: Founder- (or Founders-) Related Issues Low Potential (-1) Moderate Potential (0) 1. Founder or founders experience in the industry No experience Moderate experience

High Potential (+1) Experienced

2.

3.

4.

Founder or founders No skills skills as they relate to the proposed new venture’s product or service Extent of the founder None or founders professional and social networks in the relevant industry Extent to which the Weak proposed new venture meets the founder or founders personal goals and aspirations Likelihood that a team can be put together to launch and grow the new venture Unlikely

Moderate skills

Skilled

Moderate

Extensive

Moderate

Strong

5.

Moderately likely

Very likely

Part 5: Financial Issues Low Potential (-1) 1. 2. Initial capital investment Number of revenue drivers (ways in which the company makes money) Time to break even Financial performance of similar businesses Ability to fund initial product (or service) development and/or initial startup expenses from personal funds or via bootstrapping High One Moderate Potential (0) Moderate Two to three High Potential (+1) Low More than three

3. 4.

More than two years Weak

One to two years Modest

Less than one year Strong

5.

Low

Moderate

High

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall

Overall Potential Each part has five items. Scores will range from -5 to +5 for each part. The score is a guide—there is no established rule-of-thumb for the numerical score that equates to high potential, moderate potential, or low potential for each part. The ranking is a judgment call. Score (-5 to +1) Overall Potential of the Business Idea Based on Each Part High potential Moderate potential Low potential High potential Moderate potential...
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