TECHNO - Quiz Chap3

Question 1

the process of determining whether
a business idea is viable.

Answer 1

Feasibility Analysis

Question 2

The proper time to conduct a feasibility analysis is _______________ through the prospects for a new business.

Answer 2

early in thinking

Question 3

Spending the time and resources necessary to move forward with the business idea depends on:

PIOF

Answer 3

Product/Service Feasibility
Industry/Target Market Feasibility
Organizational Feasibility
Financial Feasibility

Question 4

If the business is feasible in all PIOF areas, ____________

Answer 4

Proceed with business plan

Question 5

If the business is NOT feasible in all PIOF areas, ____________

Answer 5

Drop or rethink business idea

Question 6

Is an assessment of the overall appeal of the product or service being proposed

Answer 6

Product/Service
Feasibility Analysis

Question 7

Components of product/service
feasibility analysis

Answer 7

Product/Service Desirability

Product/Service Demand

Question 8

a one-page description of a business
that is distributed to people who are asked to provide feedback on the potential of the business idea.

Answer 8

concept statement

Question 9

The feedback from the Concept Test will hopefully provide the entrepreneur:

Answer 9

• A sense of the viability of the product or service idea.
• Suggestions for how the idea can be strengthened or “tweaked” before proceeding further.

Question 10

There are two steps to assessing product/service demand.

Answer 10

Step 1: Talking Face-to-Face with Potential Customers.

Step 2: Using Online Tools, Such as Google AdWords and Landing Pages, To Assess Demand.

Question 11

T or F

In some cases, talking with potential customers will cause an entrepreneur to abandon an idea

Answer 11

T (true)

Question 12

Is an assessment of the overall
appeal of the industry and the
target market for the proposed
business.

Answer 12

Industry/Target Market
Feasibility Analysis

Question 13

a group of firms producing a similar product or service.

Answer 13

industry

Question 14

A firm’s target market is __________

Answer 14

the limited portion of the industry it
plans to go after.

Question 15

Components of industry/target market
feasibility analysis

Answer 15

Industry Attractiveness
Target Market Attractiveness

Question 16

Characteristics of Attractive Industries

YEFGSNHN

Answer 16

Young
Early in Life cycle
Fragmented
Growing
Selling “must have” products or services
Not Crowded
High operating margins
Not highly dependent on the historically low price of key raw materials.

Question 17

The challenge in identifying an attractive target market

Answer 17

find a market that’s large enough for the proposed business but is yet small enough to avoid attracting larger competitors.

Question 18

T or F

Assessing the attractiveness of a target market is easier than assessing the attractiveness of an entire industry.

Answer 18

F; is tougher

Question 19

must be employed to find information to assess the attractiveness of a specific target market.

Answer 19

ingenuity

Question 20

Is conducted to determine whether a proposed business has sufficient management expertise, organizational competence, and resources to successfully launch a business.

Answer 20

Organizational Feasibility
Analysis

Question 21

This analysis focuses on NON-FINANCIAL resources

Answer 21

Organizational Feasibility
Analysis

Question 22

Components of organizational
feasibility analysis

Answer 22

Management Prowess
Resource Sufficiency

Question 23

A proposed business should candidly evaluate the prowess, or ability, of its management team to satisfy itself that
management has the requisite passion and expertise to
launch the venture.

Answer 23

Management Prowess

Question 24

Two of the most important factors in Management Prowess

Answer 24

Passion for the business idea
Extent of understanding of the market the firm will participate

Question 25

This topic pertains to an assessment of whether an entrepreneur has sufficient resources to launch the proposed venture.

Answer 25

Resource Sufficiency

Question 26

To test resource sufficiency, a firm should

Answer 26

list the 6 to 12 most critical nonfinancial resources that will be needed to move the business idea forward successfully.

Question 27

T or F If critical resources are not available in certain areas, you can still proceed with the business idea.

Answer 27

F; impractical to proceed

Question 28

Examples of nonfinancial resources

Answer 28

* Affordable office space. * Lab space, manufacturing space, or space to launch a service business. * Availability of contract manufacturers or service providers. * Key management employees (now and in the future). * Key support personnel (now and in the future). * Ability to obtain intellectual property protection. * Ability to form favorable business partnerships.

Question 29

Is the final component of a comprehensive feasibility analysis.

Answer 29

Financial Feasibility Analysis

Question 30

Components of financial feasibility analysis

Answer 30

Total Start-Up Cash Needed Financial Performance of Similar Businesses Overall Financial Attractiveness of the Proposed Venture

Question 31

Estimate the proposed start-up’s financial performance by

Answer 31

comparing it to similar, already established businesses.

Question 32

Ways of comparing the start-up's financial performance with existing businesses:

Answer 32

- checking reports of individual firms - simple observational research

Question 33

T or F In the feasibility analysis stage, the extent to which a business opportunity is positive relative to each factor is based on an estimate rather than actual performance.

Answer 33

T

Question 34

Financial Factors Associated With Promising Business Opportunities SHAIA

Answer 34

* Steady and rapid growth in sales during the first 5 to 7 years in a clearly defined market niche. * High percentage of recurring revenue—meaning that once a firm wins a client, the client will provide recurring sources of revenue. * Ability to forecast income and expenses with a reasonable degree of certainty. * Internally generated funds to finance and sustain growth. * Availability of an exit opportunity for investors to convert equity to cash.

Question 35

it’s a tool that can be used in the initial pass at determining the feasibility of a business idea

Answer 35

First Screen

Question 36

If a business idea cuts muster at First Screen, the next step is ______________

Answer 36

to complete a business plan.

Question 37

refers to the total cash needed to prepare the business to make its first sale.

Answer 37

first issue