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Sumanas Chamneandamrongkarn (Punpun) 5761141

Full Feasibility Analysis


From Preparing Effective Business Plans by Bruce R. Barringer
Note: All fields can be expanded to provide additional space to respond to the questions. A
copy of this template, along with each of the assessment tools, is also available in
PDF format at the authors Web site at www.prenhall.com/entrepreneurship.

Introduction
A.
Name of the proposed business
Green tea flavored mineral water
B.

Name of the founder (or founders)


Purin-company, Sumanas Chamneandamrongkarn and members

C.

One paragraph summary of the business


Our product is green tea flavored mineral water. It is a simple and fresh highquality water. We use the best green tea from Japan which called Uji green tea.
This green tea grows in Uji, Kyoto. It has been proved as the high-qualified, rich
aroma and being accepted by all the green tea expert. We will sell it at convenient
store such as seven-eleven, family mart, and Lawson. These places allow people
from anyplace to consume. They can easily buy it in the reasonable price and
enjoy relaxing in any time.

Part 1: Product/Service Feasibility


Issues Addressed in This Part
A.
Product/service desirability
B.
Product/service demand
Assessment Tools
Concept Statement Test

Write a concept statement for your product/service idea. Show the concept statement
to 5 to 10 people. Select people who will give you informed and candid feedback.
Attached a blank sheet to the concept statement, and ask the people who read the
statement to (1) tell you three things they like about your product/service idea, (2)
provide three suggestions for making it better, (3) tell you whether they think the
product or service idea is feasible (or will be successful), and (4) share any additional
comments or suggestions.
Summarize the information you obtain from the concept statement into the following
three categories:

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Sumanas Chamneandamrongkarn (Punpun) 5761141


*

Strengths of the product or service ideathings people who evaluated your


product or service concept said they liked about the idea

Suggestions for strengthening the ideasuggestions made by people for


strengthening or improving the idea

Overall feasibility of the product or service conceptreport the number of


people who thing the idea is feasible, the number of people who think it isnt
feasible, and any additional comments that were made
Other comments and suggestions

Buying Intentions Survey


Distribute the concept statement to 15 to 30 prospective customers (do not include
any of the people who completed the concept statement test) with the following
buying intentions survey attached. Ask each participant to read the concept statement
and complete the buying intentions survey. Record the number of people who
participated in the survey and the results of the survey here.
Along with the raw data recorded here, report the percentage of the total number of
people you surveyed that said they would probably buy or definitely would buy your
product or service if offered. This percentage is the most important figure in gauging
potential customer interest.

One caveat is that people who say that they intend to purchase a product do
not always follow through, so the numbers resulting from this activity are almost
always optimistic. Still, the numbers provide you with a preliminary indication of
how your most likely customers will respond to your potential product or service
offering.

How likely would you be to buy the product or service described above?
___3___ Definitely would buy
___3___ Probably would buy
___3___ Might or might not buy
___3___ Probably would not buy
___0___ Definitely would not buy
Additional questions may be added to the buying intentions survey.
Conclusion (expand fields and report findings, in discussion form, for each area)
A.
Product/service desirability
This product is reasonable by using a gap in the marketplace. Since people in the
present have a stress from work or daily life. We especially target office worker in
the city. For this reason we make a product that can reduce stress and sell it in the
convenient store which is extremely easy to access. Moreover, this product makes

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Sumanas Chamneandamrongkarn (Punpun) 5761141

B.
C.
D.

sense to the environmental trend. We sell it in Southern Asia countries such as


Thailand. These countries are in the Mediterranean weather zone, or it can be
considered as quite hot weather. Recently, cold drink becomes popular throughout
these areas. This including our product, that we guaranteed it to be profitable.
Product/service demand
This product receives quite well response from the focus group. They questioned
about its ingredients and showed interest.
Product/service feasibility (circle the correct response)
Not Feasible
Unsure
Feasible
Suggestions for improving product/service feasibility.
-Adding more feature to the product
-Is it better to produce a normal green tea instead because it also makes people feel
relax?
-Is caffeine necessary?

Part 2: Industry/Market Feasibility


Issues Addressed in This Part
A.
Industry attractiveness
B.
Target market attractiveness
C.
Timeliness of entry into the target market
Assessment Tools
Industry Attractiveness
To the extent possible, assess the industry at the five-digit NAICS code level your
potential business will be entering. Use a broader industry category (less NCICS
digits) if appropriate (http://www.census.gov/epcd/www/naicstab.htm).
Assess the attractiveness of the industry the potential business plans to enter on each
of the following dimensions.
Industry Attractiveness Assessment Tool
(used to assess the broad industry, rather than the specific target market, you plan
to enter)
Low Potential Moderate Potential High Potential
1. Number of competitors
Many
Few
None
2. Age of industry
Old
Middle aged
Young
3. Growth rate of industry
Little or no
Moderate growth
Strong growth
growth
4. Average net income for
Low
Medium
High
firms in the industry
5. Degree of industry
Concentrated Neither
Fragmented
concentration
concentrated nor
fragmented
6.

Stage of industry life

Maturity

Growth phase

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Emergence

Sumanas Chamneandamrongkarn (Punpun) 5761141


cycle
7.

Importance of industrys
products and/or services
to customers
8. Extent to which business
and environmental
trends are moving in
favor of the industry
9. Number of exciting new
product and services
emerging from the
industry
10. Long-term prospects

phase or
decline phase
Ambivalent

phase
Would like to
have

Must have

Low

Medium

High

Low

Medium

High

Weak

Neutral

Strong

Target Market Attractiveness


Identify the portion or specific market within your broader industry that you plan to
target.
Assess the attractiveness of the target market on each of the following dimensions.
Target Market Attractiveness Assessment Tool
(used to assess the specific target market, rather than the broader industry, you plan
to enter)
Low Potential Moderate Potential High Potential
1. Number of competitors
Many
Few
None
in target market
2. Growth rate of firms in
Little to no
Slow growth
Rapid growth
the target market
growth
3. Average net income for
Low
Medium
High
firms in the target
market

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Sumanas Chamneandamrongkarn (Punpun) 5761141

4.
5.
6.

7.

8.

Methods for generating


revenue in the industry
Ability to create barriers
to entry for potential
competitors
Degree to which
customers feel satisfied by
the current offerings in the
target market
Potential to employ low
cost guerrilla and/or buzz
marketing techniques to
promote the firms product
or services
Excitement surrounding
new product/service
offerings in the target
market

Low Potential
Unclear

Moderate Potential
Somewhat clear

High Potential
Clear

Unable to
create

May or may not be


able to create

Can create

Satisfied

Neither satisfied or
dissatisfied

Unsatisfied

Low

Moderate

High

Low

Medium

High

Market Timeliness
Determine the extent to which the window of opportunity for the proposed business
is open or closed based on the following criteria.
Determine the timeliness of entering a specific target market based on other criteria.
Market Timeliness Assessment Tool
Low Potential
1. Buying mood of
Customers are
customers
not in a buying
mood
2. Momentum of the market Stable to losing
momentum
3. Need for a new firm in the Low
market with your offerings
or geographic location
4. Extent to which business
Low
and environmental trends
are moving in favor of the
target market
5. Recent or planned
Large firms
entrance of large firms
entering the
into the market
market

Moderate Potential
Customers are in a
moderate buying
mood
Slowly gaining
momentum
Moderate

High Potential
Customers are
in an aggressive
buying mood
Rapidly gaining
momentum
High

Medium

High

Rumors that large


firms may be
entering the market

No larger firms
entered the
market or are
rumored to be
entering the
market

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Sumanas Chamneandamrongkarn (Punpun) 5761141


Conclusion (expand fields and report findings, in discussion form, for each area)
A.
Industry attractiveness
This industry has only a few competitors. According to Sukviwatsirikul, U. (2015),
there are about 8 times more convenient store branches than other retail store.
Since this is a middle aged industry, there is still a little growth rate, only at least
3-5% growth rate expectation was in 2011. This industry is in the growth phase, it
has opportunities to expand more in the future. This industrys product is flexible,
it can be shifted between must have and want to have. It is able to adapt to all
environmental trends and new product can be created throughout the time. To
conclude, considering all these factors, the long-term prospect is neutral.
B.
Target market attractiveness
For the target market, there are lots of competitors in this target group. Since our
target market is a working people, or an employees, average net income for firms
in the target market is high. According to Worldsalaries (2005), Thai employees
average income was around 10,000 bath per person. Methods for generating
revenue in the industry and ability to create barriers for competitors are clear.
Moreover, this group of customer is easy to be satisfied, they are also pay much
attention to the kind of product we make.
C.
Market timeliness
For the customers mood, they are willing to buy this kind of product, even the
momentum of market is slowly gaining. Our product fit for our geographical
location and can be adapted to the environmental trend. For this reason, we have a
plan to enter our large firm to the market.
D.
Industry/market feasibility (circle the correct response)
Not Feasible
Unsure
Feasible
E.
Suggestions for improving industry/market feasibility.
To improve our market feasibility, we may need to lower the products price in
order to increase customers satisfaction. This will support and attract their
attention more.
Part 3: Organizational Feasibility
Issues Addressed in This Part
A.
Management prowess
B.
Resource sufficiency
Assessment Tools
Management Prowess
Use the following table to candidly and objectively rate the prowess of the founder
or group of founders who will be starting the proposed venture.
Management Prowess Assessment Tool
Low Potential
1. Passion for the business Low
idea
2. Relevant industry
None
experience

Moderate Potential
Moderate

High Potential
High

Moderate

Extensive

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Sumanas Chamneandamrongkarn (Punpun) 5761141


3.
4.
5.
6.
7.

Prior entrepreneurial
experience
Depth of professional
and social networks
Creativity among
management team
members
Experience and expertise
in cash flow
management
College graduate

None

Moderate

Extensive

Weak

Moderate

Strong

Low

Moderate

High

None

Moderate

High

No college
education

Some college
education but not
currently in college

Graduated or
are currently
in college

Resource Sufficiency
The focus in this section is on nonfinancial resources. Use the following table to rate
your resource sufficiency in each category.
The list of resources is not meant to be exhaustive. A list of the 6 to 12 most critical
nonfinancial resources for your proposed business is sufficient.
An explanation of the rating system used in the first portion of the table is as follows:
1 Available
2 Likely to be available: will probably be available and will be within my budget
3 Unlikely to be available: will probably be hard to find or gain access to, and
may exceed my budget
4 Unavailable
5 NA: not applicable for my business
Resource Sufficiency Assessment Tool
Ratings
Resource Sufficiency
1 2 3 4 5
Office space
1 2 3 4 5
Lab space, manufacturing space, or space to launch a
service business
1 2 3 4 5
Contract manufacturers or outsource providers
1 2 3 4 5
Key management employees (now and in the future)
1 2 3 4 5
Key support personnel (now and in the future)
1 2 3 4 5
Key equipment needed to operate the business
(computers, machinery, delivery vehicles)

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Sumanas Chamneandamrongkarn (Punpun) 5761141


1

1 2 3 4 5
Ratings: Strong, Neutral,
or Weak
Strong
Strong
Strong
Neutral

Ability to obtain intellectual property protection on key


aspects of the business
Support of local and state government if applicable for
business launch
Ability to form favorable business partnerships
Proximity to similar firms (for the purpose of knowledge
sharing)
Proximity to suppliers
Proximity to customers
Proximity to a major research university (if applicable)

Conclusion (expand fields and report findings, in discussion form, for each area)
A.
Management prowess
Our team has high passion for the business, as well as having moderate industry
and entrepreneurial experience. We are strongly professional with high creativity.
However we dont have university education or real experience in cash flow
management.
B.
Resource sufficiency
Most of our resources are available. This includes lab space, key resources, and
contract to outsource provider. Office space, employees, and support personnel are
likely to be available. For this reason, our ability to obtain intellectual property and
business partnership are only likely to be available. Since this kind of business has
lots of competitors, government support is unlikely to be available.
C.
Organizational feasibility (circle the correct response)
Not Feasible
Unsure
Feasible
D.
Suggestions for improving organizational feasibility
Our business need to improve the idea to be more specific and useful in
environment term, this includes a benefit to others. This can make our business gaining
support by becoming significant and attract others organization.
Part 4: Financial Feasibility
Issues Addressed in This Part
A.
Total startup cash needed
B.
Financial performance of similar businesses
C.
Overall financial attractiveness of the proposed venture

Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

Sumanas Chamneandamrongkarn (Punpun) 5761141

Assessment Tools
Total Start-Up Cash Needed
The startup costs (which include capital investments and operating expenses) should
include all the costs necessary for the business to make its first sale. New firms
typically need money for a host of purposes, including the hiring of personnel, office
or manufacturing space, equipment, training, research and development, marketing,
and the initial product rollout.

At the feasibility analysis stage, it is not necessary for the number to be exact.
However, the number should be fairly accurate to give an entrepreneur an idea of the
dollar amount that will be needed to launch the firm. After the approximate dollar
amount is known, the entrepreneur should determine specifically where the money
will come from to cover the startup costs.

The total startup cash needed can be estimate using the following table.

Total Startup Cash Needed (to Make First Sale)


Capital Investments

Amount

Property

80 million baht

Furniture and fixtures

30 million baht

Computer equipment

50 million baht

Other equipment

5 million baht

Vehicles

20 million baht

Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

Sumanas Chamneandamrongkarn (Punpun) 5761141

Operating Expenses

Amount

Legal, accounting, and professional services

30 million baht

Advertising and promotions

50 million baht

Deposits for utilities

30 million baht

Licenses and permits

30 million baht

Prepaid insurance

5 million baht

Lease payments

5 million baht

Salary and wages

70 million baht

Payroll taxes

5 million baht

Travel

5 million baht

Signs

5 million baht

Tools and supplies

10 million baht

Starting inventory

20 million baht

Cash (working capital)

20 million baht

Other expense 1

5 million baht

Other expense 2

5 million baht

Total Startup Cash Needed =

480 million baht

Comparison of the Financial Performance of Proposed Venture to Similar Firms


Use the following tables to compare the proposed new venture to similar firms in
regard to annual sales (Year 1 and Year 2) and profitability (Year 1 and Year 2).
Comparison of the Financial Performance of Proposed Venture to Similar Firms
Assessment Tool

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Sumanas Chamneandamrongkarn (Punpun) 5761141


Annual Sales
Estimate of Proposed Ventures

Explanation of How the Estimate

Annual SalesYear 1

Was Computed

Estimate of Year 1 Sales __ 438 million baht

We will sell our product for 30 baht


per piece. Since we will sell our
product to almost every convenient
store in the country, at least 2,000
branches. If we can sell at least 20
pieces per day, we can sell 1.2 million
baht per day. At the result, 438
million baht per year.

Summary: How proposed annual sales, on


average, compares to similar firms (circle one)
Below Average

Average

Above Average

Estimate of Year 2 Sales ___657 million baht


Summary: How proposed annual sales, on
average, compares to similar firms (circle one)
Below Average

Average

Above Average

On the following year, we think that


we should receive at least 20% more
attention and profit that the previous
year. We will sell more than 30 pieces
per day with the same price and
remaining at the same amount of
branches. We will not increase the
price immediately in this year to
make the customer feels comfortable
with the product. At the result, we
will receive 1.8 million per day and
total, 657 million baht.

Net Income
Estimate of Proposed Ventures

Explanation of How the Estimate

Net IncomeYear 1

was Computed

Estimate of Year 1 Net Income 292 million baht

As we pay for the start-up cost for


480 million baht, total, our products
amount is high, so we can send our
product to many store. We can gain
profits from the whole country.

Summary: How proposed net income, on


average, compares to similar firms (circle one)
Below Average

Average

Above Average
Our profit per piece of the product: a
bottle of mineral water, is 20 baht.

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Sumanas Chamneandamrongkarn (Punpun) 5761141


This is because we sell product for 30
baht each with original cost for 10
baht. Since we will sell at least
40,000 pieces per day or 14.6 million
pieces per year, our net profit is 292
million baht per year.
Estimate of Year 2 Net Income 438 million baht
Summary: How proposed net income, on
average, compares to similar firms (circle one)
Below Average

Average

Above Average

In the second year, we increase our


target of sell per day to be 30 pieces
per day. At the result we will sell at
least 60,000 pieces per day or 21.9
million pieces per year, our net profit
is 438 million baht per year.

Overall Financial Attractiveness of the Proposed Venture

The following factors are important in regard to the overall financial attractiveness of
the proposed business.

Assess the strength of each factor in the following table.

Overall Financial Attractiveness of Proposed Venture Assessment Tool


Low Potential Moderate Potential
1. Steady and rapid growth in Unlikely
Moderately likely
sales during the first one to
three years in a clearly
defined target market
2. High percentage of
Low
Moderate
recurring income
meaning that once you win
a client, the client will
provide recurring sources
of revenue
3. Ability to forecast income
Weak
Moderate
and expenses with a
reasonable degree of
certainty
4. Likelihood that internally
Unlikely
Moderately likely
generated funds will be
available within two years
to finance growth
5. Availability of exit
Unlikely to be May be available
opportunity for investor if
unavailable
applicable

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High Potential
Highly likely

Strong

Strong

Highly likely

Likely to be
available

Sumanas Chamneandamrongkarn (Punpun) 5761141


Conclusion (report finding for each area)
A.
Total startup cash needed
Our total start-up cost needed is 480 million baht. We spend most of the money on
the asset, computer equipment, advertising, and salaries. This is because we need
high quality, well developed product. Moreover, advertising is extremely
significant to promote the product in the social since our target group is well
associate with social and media.
B.
Financial performance of similar businesses
We estimate that our sells and net income will increase steady throughout the
years. Since we think that the product will become more popular from our
advertisement, we can sell more product.
C.
Financial feasibility (circle the correct response)
Not Feasible
Unsure
Feasible
D.
Suggestions for improving financial feasibility
We should increase our price when the product become well known enough. At the
same time, we should increase the quality, too.
Overall Feasibility: Summary and Conclusion
Overall Feasibility of the
Business Idea Based on
Each Part
Product/Market Feasibility
Not feasible
Unsure
Feasible

Suggestions for Improving


the Feasibility
-Adding more feature to
the product
-Is it better to produce a
normal green tea instead
because it also makes
people feel relax?
-Is caffeine necessary?

Industry/Market Feasibility

Not feasible
Unsure
Feasible

To improve our market


feasibility, we may need to
lower the products price in
order to increase
customers satisfaction.
This will support and
attract their attention more.

Organizational Feasibility

Not feasible
Unsure
Feasible

Our business need to


improve the idea to be
more specific and useful in
environment term, this
includes a benefit to others.
This can make our business
gaining support by
becoming significant and
attract others organization.

Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

Sumanas Chamneandamrongkarn (Punpun) 5761141

Financial Feasibility

Not feasible
Unsure
Feasible

We should increase our


price when the product
become well known
enough. At the same time,
we should increase the
quality, too.

Overall Assessment

Not feasible
Unsure
Feasible

We should set the products


price to be flexible,
however the quality should
be steady increasing.

Conclusionbriefly summarize your justification for your overall assessment.


Our product is green tea flavored mineral water. We will sell it at convenient store
such as seven-eleven, family mart, and Lawson. These places allow people from anyplace
to consume. This product is reasonable by using a gap in the marketplace. Since people in
the present have a stress from work or daily life. We especially target office worker in the
city. The product makes sense to the environmental trend. We sell it in Southern Asia
countries such as Thailand. These countries are in the Mediterranean weather zone, or it
can be considered as quite hot weather. Recently, cold drink becomes popular throughout
these areas. This product receives quite well response from the focus group. They
questioned about its ingredients and showed interest.
This industry has only a few competitors. Since this is a middle aged industry,
there is still a little growth rate, but it is in the growth phase, it has opportunities to
expand more in the future. This industrys product is flexible. The long-term prospect is
neutral. For the target market, there are lots of competitors in this target group. Since our
target market is a working people, or an employees, average net income for firms in the
target market is high, however easy to be satisfied.
Our team has high passion for the business, as well as having moderate industry
and entrepreneurial experience. Most of our resources are available. This includes lab
space, key resources, and contract to outsource provider. However, government support is
unlikely to be available.
Our total start-up cost needed is 480 million baht. We spend most of the money on
the asset, computer equipment, advertising, and salaries. We estimate that our sells and
net income will increase steady throughout the years. Since we think that the product will
become more popular from our advertisement, we can sell more product.

Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall