Understanding Feasibility Reports and Business Plans in Entrepreneurship

[Music] good morning class um wome to another episode of ENT 211 so I'm Mrs

aan I'll be taking you through basics of visibility reports and business

plan you see uh visibility reports which will be generated from feasibility study is also

an important uh an important um process or an important document to refer to as far

as Venture creation is concerned you know Venture creation actually started starts from um generating an idea to

create a business um Venture there doesn't stops at generating from that idea then to

converting idea into reality maybe talking about production of goods or um rendering or Services

rather it also has to take through some certain process before you can talk of you know transforming the idea into

reality so that's all the feasibility uh study or the visibility report feasibility study preced the

reports because it's from the study that you generate the report so that's visibility study comes into comes into

place and what does visibility study does what's the essence of conducting visibility study feasibility study the

essence of visibility study actually give a yes or no answer or response to that idea

that's fine you've conceived the idea the entrepreneur has conceive the idea can I proceed in transforming this idea

into reality so it's the feasibility reports that actually give that um answer maybe to

proceed maybe the idea is something that will be viable or visible or but that be profitable or the other way round so

it's the report the visibility report that will provide this answer maybe to continue to assembly resources to

transform the idea into Goods into production of goods or rendering of um or services so the visibility study is a

comprehensive analysis embarked upon before establishing a business or project so asserting as much accurately

as possible informations and indicators as to whether the business is viable

profitable and possible May in then talking about resources to

transform the idea into reality the visibility reports will give the availability of resources you know be it

Financial Resources Human Resources you know the location your target audience who are those audience that you're

targeting who are those that we accept the acceptance of this idea you know by the society availability of market for

the products or for the that you are bringing so these are what visibility reports

entails it's going to provide you accurate information about all this um accurate information about all these

key Point as far as far as transforming your ideas into reality is um is concern so like I said earlier that it is this

report it is the visibility study that least to the report you know the outcome of the study the study is more or less a

research so the outcome from the study produces the visibility reports so it's the visibility reports that the uh

intending entrepreneur now works on visibility reports can be carried out by uh the prospective

entrepreneur or even though existing organizations also carry out visibility reports you know talking about the

Innova ability of the of the organization creating new ideas and you know when you want to transform these

newly formed ideas into reality the invisibility report actually comes into place so there are

some contents of um the visibility report you know we are talking about a real or a genuine visibility report

there are certain content or features that it must it must process that is those things

that must be well detailed in the visibility reports you know the report is more or less a firstand information

that is from the report you get the answer is either yes or no for this idea should I proceed on this idea or should

I drop the should I drop the the idea so a brief description of the project or of the idea of the business uh Venture is

required in a reli feasibility report the project objective the project OB objective is

also um required specify the project objective detailed specification of the project

objective the economic and social justification of the project that is what the economic outcome of the

projects then the social justification that is the society in which the project will be executed that is how is that

idea um relevant to that on society the organization and management that is those resources you know talking about

lands and building raw materials the financial resources the

human resources the type of Labor required in transforming the The Goods the producing the goods or rendering the

services be it skilled or unskilled labor needed Technical and production consideration that is

availability of Technology another to that will be used in the in the production in the

production process or in the business operations how avail how available are this um

available at the technical um the technical capability how capable is the is the business in forms of his

technical ability and managerial ability the demand and Supply output that is availability of customers the

market your target audience then how do you intend to meet up with the demand the customers demand and how you

make the goods available to them to the customers the financial projections and profitability the financial commitment

to the to the business and the return of course we are committing financial resources of course you must be

expecting something tangible in in return then the cost of the project the cost of the project cost of

the entire project like I said earlier you have to acquire the resources even though Financial Resources you acquire

Financial Resources as well then risks the risk analysis course the risk and reward

analysis of the project must also be captured by the visibility study so these are some of the contents of

our of feasibility feasibility study now let's look at the importance some of

the importance of visibility some of the importance of visibility

study why do prospective entrepreneur or an existing business and back on that visibility study you know

given you have to make some commitments the the cost is attached to carrying out visibility studies so does it worth

investing the cost or or not so among the importance is it helps to assertain whether or not a project is worth

undertaking so like I said earlier the the primary objective of conducting visibility study is to what to

determine the or no response to an idea that is does this idea does this project work

undertaking or not so the visibility report asserting the viability the profitability and the technical pract

practicability of the project so like I said it's not only an ex not

only a new business but an existing business also needs visibility feasibility study it

influences business decision in the area of investment and finances so that

is this have as a guide to you know investors probably a new business that have actually contacted some investors

to come and invest in the business as a result of resource on constraint so the feasibility presenting the visibility

reports to the investors you know we we we we influence their decisions maybe to go for the maybe they could invest in

the business for war or not support another importance of visibility study is support investors in quest for credit

facilities from financial institutions this is the visibility reports we always

um Aid or we always assist the prospective entrepreneur

to get financial assistance from financial institution it provides a report which largely give firsthand

idea for pre information concerning the viability and profitability

of a project so it's a firstand information you report from the study is a firstand information even though

either to investors or non investor and is equally serves as a guide to the prospective entry entrepreneur know to

gain them confidence as far as the idea is concerned if the idea is not viable you know it may be the reason may be

maybe time as a function of time maybe in the in present time it may not be viable that doesn't mean the idea may

not be viable in future in future time however all this will be discovered in the

visibility visibility study so other among the importance is also that it determines the set up and gestation

periods indicating the possible time duration for a business to break a and start making profit you know conducting

the visibility studies however not the the um the the the prospective entrepreneur

cannot conduct the visibility study on his own he has to employ professionals uh the service of professionals you know

in different area in the marketing in in the marketing area production expertise Financial expertise and among

others among others so all these various expertise we provide information based on their area

of expertise so I'm providing that information we allow

the we give a firstand information for the business on the gestation period this also assist

in identifying the gation period for the business to break even and start making profit so

consultants and financial analyst rely on the such report for support in assisting in assisting clients so these

are some of the reasons or importance for carrying out uh

visibility visibility study so like I said earlier that the content of the visibility study which

must include so I've listed the the contents before so those contents must be well

detailed in the feasibility visibility report of

the of that business so let's look at how to conduct visibility

study so some of the steps involv in conducting visibility stud among which we have

the uh conducting a preliminary analysis conducting a preliminary analysis so the pre the feasibility

study is um started sorry the um intending

entrepreneur or perspective entrepreneur begin the visibility study process by conducting an initial evaluation of the

project objective and scope so as these steps in finding defining these steps involves defining the

problem that the project intends to to address or solve you know like you said that among the features of an

entrepreneur is problem solving the problem solving characterises of an entrepreneur is a distinctive of the

entri so the problem that has been identified you the idea has been identified to solve a a

problem so this problem will be should be well defined the problem should be well

defined so by defining the problem then the preliminary analysis will be

very very easy to conduct so ensure that the products goals are clear and well defined so another steps in conducting

feasibility study is to analyze technical specifications you examine the technical

aspect of the project or of the idea there avability of required technology equipment and resources and verify that

the project technical requirements can be met effectively you know within the period that has been projected for the

idea to be transformed into reality we see that the technical requirement of the project is available within that

um within that uh period another step is conduct commercial

analysis you know what do you mean by commercial analysis so this has to do with the markets identifying the market

the target audience knowing your audience knowing your customers know this idea want to

address the the problem of a certain set of people or a certain set of audience so from there

so you need to get familiar with this audience that we are talking about and also the market

assessment that is there you have any products or services that is similar to this product

in the that is available in the market which can equally address the identifying um

problem and also the market demand for the product or Services the market size the

competition because you must also study your competitors you know some some operators have been operating in the

market before and you as a new operator or a you as a new operator that is bringing

something that is offering something new into the market must equally be mindful of

competitors the customers is and the market train so determin if there is a visible market for the

project there is a feasible market for the product of course initially by identifying the idea you

have targeted a set of customers set of people so you need to get familiar with that set of people with

the marketing which they operate you know of course they are operating in a particular Market before but they are

actually on patronizing a particular Market before so you need to get

familiar with that as well so that's where the market experties uh the service of the market

experties comes into place then prepare a projected income statement here it is expected to create a detailed projected

income statement for the project which include estimating the capital for the project

the revenue forecast the expense projections the cash flow analysis and calculate the return on

investment to determine the prod project Financial viability or the internal rate of

return of the and the net present value of future cash flow so all these centers around the

profitability of the the profitability of the business so among the steps is also to analyze different

alternatives for visibility which include explore various alternative and scenarios for the

project visibility assess different approaches Technologies or business models to

identify the most valuable option so and the the final steps there

is make a go or no go decision that is from the report because haven't do all this

haven't conduct the previous um steps hav

conduct and I have detailed information about those um those ones a for mentioned then the final

stage of the visibility study is to what is to make the decision that

is the decision to proceed with the idea or the decision to do what to drop the the idea so based on the findings and

Analysis conducted through our the visibility stud you make a well informed decision on whether to proceed with the

idea or the project or to drop the idea or the project so ensure that the decision

aligns with the Project's goals and aligns with the information presented in the

study so all these steps you know following this for mention they like the round um six

there are around six of them so I haven't followed this steps as an as

presented then the the

the haven't followed this um steps then the decision

to go ahead with the idea or decision to drop it

surely we surely a match and should definitely be a reliable reliable uh

decision so that's that about visibility study you know is that study or the visibility

report is that report that gives the intending entrepreneur they go ahead to to start

the venture or to do what to drop the idea of creating such a

venture now to business to the second leg of the topic which is business um business

plan uh both feasibility studing and business plan are important both visibility reports

and business plan they are important documents that guides Venture creation just that we have differences between

between the two but let me explain what um business plan is all about before you now go into the difference between

reability study and business plan so the business plan comes after feasibility study that is if the

feasibility reports gives a go ahead of the to proceed with the Venture creation or to proceed with the business

to translate the ideas into producing Goods or rendering Services then the need for business plan comes into comes

into play so what do you mean by um business plan is usually a written document

usually a document a formal document prepared by the entrepreneur that describes all the relevant external and

internal elements involv in starting a new Venture involv in starting a new

Venture it's also a summary document that outlines how and why a new business is

being is being created so new entrepreneurial Ventures must prepare

formal written documents so I outline their longterm objective and the means to be employed to reach the set

objective that is what business plan does is to you know you you have the information that you can go ahead with

the business so now you have an objective already you have a vision and you have a

mission for the for the business so by now clearly stating the objective the goals the vision the mission of

the of the business then how do you intend to achieve these objectives that's what the business

plan specifies how do you intend what are the strategy what are the means you need to put into

place to achieve the business the business um objective so it is often an integration of functional

plans you know such as the marketing the finance function the human resource um function the production function the

research and development um uh function of the business how do you intend to establish this function and

how do you intend to do what to make this um function how do you establish a

relationship between this function towards achieving the identified

objective so that what the business uh plan specified so it spells out

all these uh activities you know so as to guide the business in its present time and its and

future future time so like I said earlier that new entrepreneurial Ventures must prepare

formal written document to outline their long-term objectives and the means to be to be employed to reach the objective so

the business plan underlines the Strategic strategies that needs to be adopted in order to reach organization

goals identify potential problems and devise solutions for those problem so in

addition the potential investors also look at the business plan to evaluate the risk exposure of a particular

startup business or Venture and try to attract employees and investors to use the business plan to

solidify their claims regarding the potential profitability of a particular

business idea so why do we prepare the business business

plan among the reasons for preparing the business plan is one entrepreneur use the business

plan to understand the possibility of a particular idea that is you know where you are

writing the plan and you are stating the business functions the relationship that we exist

between the the business function to achieve the objective because it will definitely give you the

go ahead or definitely definitely makes you project into the future about the what about what the business is going to

be about in the in the future so it is important to contextualize the work of the proposed

project the current markets before committing resources such as the availability of time and on the

financial resources another reason for writing the business plan is the is that business

plan formulates a concrete plan of action that enables an organized manner of conducting

businesses that is the business plan usually serves as a guide know some some sometime you say is a

guide or is a road road map that guides the implementation of the of the business

such that the objective of the business will be achieved at the end of at the end of the day is after bringing

together all the factors of of production the business plan acts act as reference

tools for management and employees as they solidify the flow of communication Authority and tax

allocation so another reason is that the process of preparing a business plan often creates many

unintended yet desired results it functions on the principle of foresight as it helps one realize future use and

challenges that are AR explicit so I think I've explained

down earlier so another reason is the business plan is an effective way of communicating with potential investors

and the level of expertise and time used in preparing the business plan also gives professional credibility to

entrepreneurs it analyze and predict the chances of success for the investor and help to raise Capital you

know this um translate to the fact that you know writing a business plan must be the core uh function of the intending

entrepreneur or the um the owner of the business although the owner of the business may now need some professional

guidelines or expert opinion in the various business function but the owner of the business must

participate in what must par participate willingly in writing the business plan because he's the one in charge is one

that is going to Def devise all the means stated in the business plan so he must have the full knowledge of the

content the full knowledge and the translation and implementation of the content of you of the

business of the business plan so let's look at some of the content of the business plan which is

similar to that of feasibility study the exe one we have executive summary the executive summary function as a reading

guide as it highlight the key aspect of the plan and give structure to the documents so it must describe the only

ownership and formation of the of the business by describing the entire plan the mission statements and the vision of

the organization the characteristics of the of the business what's the what the business is into the core function of

the business as is by describing the goods or the services that the business

is providing for the for the public so another feature is business description business description here

this describe the mission and vision of the of the organization that is the business

operation of that organization or the business must be well spelled out in the business description it's provide the

concept of one place in the market it benefits to Future customers it must include ke Milestone

tasks and assumptions so fundamental questions under the business description include

who are you what is the product or services and why are why what are it differentiating characteristics that is

why it's so unique or why do you think customers we why is the product unique as compared

to what we are having the in the market existing products in the market where will you start implementing

your plans and expect Clash flow or profit why should customers choose your organization or why should investors

invest in your organization how do you plan to run the business in terms of structure and

Regulatory compliances to you see must describe the business in line with what with the

environmental factors so here you must just equally take the environmental factors

into into cons you must put them into consideration when defining the business of the

organization so another one is our Market strategies so this presents the target

consumer group and the strategies needed to tap into it it requires meticulous analysis of the aspect of the

of the market so another features or another content of

the business that that that must be well spelled out in the business plan is the competitive

analysis so the competitive analyses aim to understand the entry barriers one could face due to other competitors in

the market the strength and existing companies should be corrupted into one strategy and the weaknesses of the

product development Cycles should be exploited to gain a PO Advantage so we also have design and development this

actually outlines the technical details of the product and its development cycle within the realm of production we also

have the business plan must also include operations and management plans this describe the cycle of

business functions needed for survival and growth which includes management functions such as stxs division

hierarchy employee uh management process the operational

functions among um others the F we also have on financial uh

analysis as this will include the company's balance sheet and cash flow projection financial data which is

imperative for to provide cred credibility to any assertions or claims so this helps to provide an accurate

idea of the company's value and ability to bre operational cost and then and then profit so all these

um all this must be well spelled out in the in the business in the business plan you know you can see that we have they

are similar to that of um feasibility uh study but feasibility what feasibility study does is true you

know is is what we call projection compared to business that is

is what you want to do exactly what you want to do what you want to achieve know compared to visibility study where you

want to know if it is achievable or or not so let's stop there as far as our And

discussing business plan is concerned when you get hold of Entrepreneurship textbooks you can read

more on visibility study and the and business plan so let's quickly go through the difference

between visibility study and the business business business

plan so let's look at some of the differences between visibility studing and

then so the purpose one is the purpose differences between visibility study and business plan so among the concept of

the difference is the purpose they are different in purpose the purpose for carrying out writing visibility report

and writing a uh A business plan is different so visibility studies are conducted in early stages of the of of

the um idea or project development or business planning the primary purpose is to determine whether a

proposed project or business idea is viable and should be pursued so it's focus on assessing the

potential risk challenges and opportunities associated with the project so that's visibility study for

you but for business plan on the purpose of the business plan there the business plan is written after the

visibility uh study the visibility report so on once it has

been once it has been established that the project is viable and profitable then the purpose of the business plan is

to outline in details how the business will be structured operated and and grown so it says as a road map for the

future of the business and is often used in securing finances so all this has been

discussed in explaining the meaning of visibility study and business plan so we also have the difference in Contents of

the of both documents so for the visibility study the it includes an analysis of the

project overall concept market research technical requirements Financial projections

potential RIS and recommendation why for business plan its content include is a detailed document that outlines the

company's Mission Vision gos the organizational structure the market strategy the

marketing and sales plans that is the business um functions so it delves into the specifics of how the business will

be how the business will operate is how the business will be implemented so the timing of vote is also different we have

differences in timing for visibilities study the feasibility report is written at the

out is written at the outset of a project or business idea to assess his potential visibility the stakeholders

decide whether to move forward with the project or not why for business plan they are typically created after the

visibility study once it has been determined that the project is wor undertaking so they provide a guide

for the operations of the Venture so differences in audience that is the target audience or those that will

implement the reports of the do the two documents are different the primary audience for visibility study includes

projects stakeholders investors and decision makers who need to determine whether the project should proceed or or

not as for business plan the target audience the business plans are used to communicate the business

vision and strategy to a wider audience including potential investors lenders partners

and and then employees so those are some of the difference between visibility study and

The Business business plan so you have it in mind that after identification of idea or you know determining an idea for

problem solving you when you find out that this idea can solve a particular problem within your environment you just

don't jump into what into acquiring resources to do what to translate the idea into reality rather there are

processes or stages there are things to be done before that which include conducting a visibility study to

generate the feasibility report and equaling spelling out the after the uh go ahead decision from

the visibility reports then you need to spell out how you intend to achieve the aims and objective of the business you

intend to create of the of the product you know like I said it's not only an intending entrepreneur that

generate idea because of the Innovative ability of organ of existing businesses they also generate new ideas they

generate new ideas they create new ideas so how do they determine if their ideas is worth um undertaking or not so that

is through the visibility study then after the visibility study it is also important important for entrepreneurs to

have a document that spells out how you achieve the objective of the of the new business that tend to

create or of the new products that is that you want to introduce to the existing uh businesses the organizations

does so we come to the end of um the topic cability report and business plan thank you for listening

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