Chapter 3 Terminology ENTR 200

Feasibility Analysis

The process of determining whether a business idea is viable.

Product/Service Feasibility

An assessment of the overall appeal of the product or service being proposed.

Concept Statement

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.

Usability Testing

The method by which users of a product are asked to perform certain tasks to measure the product’s ease-of-use and the user’s perception of the experience.

Industry/Target Market Feasibility

An assessment of the overall appeal of the industry and the target market for the product or service being proposed.

Industry Attractiveness

The degree to which the industry is large and growing, important to the customer, and not overly crowded.

Target Market

A limited portion of the industry that the firm goes after or to which it wants to appeal.

Organizational Feasibility

An assessment of whether a proposed business has sufficient management expertise, organizational competence, and resources to successfully launch its business.

Management Prowess

The ability of the initial management team to successfully launch and grow the business.

Resource Sufficiency

An assessment of whether an entrepreneur has sufficient resources to launch the proposed venture.

Financial Feasibility

An assessment of the financial aspects of a new venture.

Total Start-Up Cash Needed

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

Overall Financial Attractiveness

The evaluation of a proposed venture’s financial performance based on factors such as projected sales, cash flow, and return on investment.