Chapter 3 Review Questions ENTR 200

What is a feasibility analysis, and why is it important?

Feasibility analysis is the process of determining whether a business idea is viable. It is important because it helps entrepreneurs assess the potential of a business idea before investing significant resources.

When should a feasibility analysis be conducted?

A feasibility analysis should be conducted early in the thinking process when developing a business idea to screen ideas before a lot of resources are spent on them.

What are the four areas of a properly conducted feasibility analysis?

Product/service feasibility, industry/target market feasibility, organizational feasibility, and financial feasibility.

What are the two primary issues to consider in product/service feasibility analysis?

Desirability of the product/service and demand for the product/service.

What is the purpose of a concept statement?

To provide a one-page description of a business idea to solicit feedback from stakeholders.

What is usability testing, and why is it important?

Usability testing involves observing users as they interact with a product to identify usability issues. It is important to ensure the product meets user needs and expectations.

What are the three primary issues to consider in industry/target market feasibility analysis?

Industry attractiveness, market timeliness, and identification of a niche market.

What are the two primary issues to consider in organizational feasibility analysis?

Management prowess and resource sufficiency.

What are the most critical issues to consider in financial feasibility analysis?

Total start-up cash needed, financial performance of similar businesses, and overall financial attractiveness of the proposed venture.