FirstScreen.pdf

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) Moderate Potential (0) High Potential (+1)

1. Extent to which the idea:

 Takes advantage of an environmental trend

 Solves a problem

 Addresses an unfilled gap in the marketplace

Weak Moderate Strong

2. Timeliness of entry to market

Not timely Moderately timely Very timely

3. Extent to which the idea “adds value” for its buyer or end user

Low Medium High

4. Extent to which the customer is satisfied by competing products that are already available

Very satisfied Moderately satisfied Not very satisfied or ambivalent

5. Degree to which the idea requires customers to change their basic practices or behaviors

Substantial changes required

Moderate changes required

Small to no changes required

Part 2: Industry-Related Issues Low Potential (-1) Moderate Potential (0) High Potential (+1)

1. Number of competitors

Many Few None

2. Stage of industry life cycle

Maturity phase or decline phase

Growth phase Emergence phase

3. Growth rate of industry

Little or no growth Moderate growth Strong growth

4. Importance of industry’s products and/or services to customers

“Ambivalent” “Would like to have” “Must have”

5. Industry operating margins

Low Moderate High

Part 3: Target Market and Customer-Related Issues Low Potential (-1) Moderate Potential (0) High Potential (+1)

1. Identification of target market for the proposed new venture

Difficult to identify May be able to identify Identified

2. Ability to create “barriers to entry” for potential competitors

Unable to create May or may not be able to create

Can create

3. Purchasing power of customers

Low

Moderate High

4. Ease of making customers aware of the new product or service

Low Moderate High

5. Growth potential of target market

Low Moderate High

Part 4: Founder- (or Founders-) Related Issues

Low Potential (-1) Moderate Potential (0) High Potential (+1)

1. Founder or founders experience in the industry

No experience Moderate experience Experienced

2. Founder or founders skills as they relate to the proposed new venture’s product or service

No skills Moderate skills Skilled

3. Extent of the founder or founders professional and social networks in the relevant industry

None Moderate Extensive

4. Extent to which the proposed new venture meets the founder or founders personal goals and aspirations

Weak Moderate Strong

5. Likelihood that a team can be put together to launch and grow the new venture

Unlikely Moderately likely Very likely

Part 5: Financial Issues

Low Potential (-1) Moderate Potential (0) High Potential (+1)

1. Initial capital investment

High

Moderate Low

2. Number of revenue drivers (ways in which the company makes money)

One Two to three More than three

3. Time to break even

More than two years

One to two years Less than one year

4. Financial performance of similar businesses

Weak Modest Strong

5. Ability to fund initial product (or service) development and/or initial startup expenses from personal funds or via bootstrapping

Low

Moderate High

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

Suggestions for Improving the Potential

Part 1: Strength of Business Idea