BUSINESS FEASIBILITY STUDY Name: Address: Phone: Email: Proposed business: Mobile: NEIS Program Small Business Centre CBD Campus: Building 37, Room 308 411 Swanston Street Melbourne 3000 Telephone: (03) 9925 2933 Facsimile: (03) 9925 2707 Bundoora West campus: Telephone: (03) 9925 7500 Facsimile: (03) 9466 8094 Planning is essential in the establishment of a new business. This guide will help you to start planning your business. If you are proposing to apply for NEIS the information recorded in this guide will form the basis of the assessment of your readiness to enter the NEIS program. For best results take sufficient time to find out the information needed to complete the guide. Do not just make it up or write what you think other people want to hear. Throughout this guide there are prompts on the type of background information required to support the development of your business idea. We encourage you to explore all possible avenues to gather information relevant to your business area. Attach any additional information you think may be useful. This document is a planning guide only, it is designed to assist you to start the process of developing your business idea. On completion this document is accorded Commercial In Confidence status. ELIGIBILITY CHECKLIST. To participate in NEIS you must: Your business must: Be 18 years or older. Be registered as unemployed with Centrelink Be receiving a qualifying income support payment Not be an undischarged bankrupt Not have received NEIS assistance in the previous 2 years. Have never operated commercially before Be independent, lawful and reputable Not duplicate an existing business unless an unsatisfied demand for your product or service can be shown Not involve the purchase or take-over of an existing business. RMIT 2003 1 V5 March 2005
YOUR BUSINESS IDEA The following questions are designed to assist you in the development of your business idea, your vision for the future of the business and to detail the expertise that you bring to your new business venture. What are your reasons for wanting to start your own small business? What are your objectives for your business over the next twelve months? What are your objectives for your business over the following two years? RMIT 2003 2 V5 March 2005
YOUR BUSINESS IDEA cont. List all the products and/ or services that you plan to provide at the commencement of the business. List all the products and/ or services that you plan to provide in the future. Who will operate the business? Who else will be employed by the business immediately? Who else will be employed by the business in the future? RMIT 2003 3 V5 March 2005
FINANCES CAPITAL REQUIREMENTS This section will help you to calculate the amount of money you need to get your business underway. It also looks at your ability to gain finances and whom you will approach if finance is necessary. List all the equipment that you will need for the business, eg: Plant and equipment, fittings, tools, office furniture, computer equipment. Already Own Approximate value Total Need to acquire $ Approximate value Total $ RMIT 2003 4 V5 March 2005
FINANCES cont. START UP EXPENSES What are your Start Up Expenses? Complete the following checklist of Business start up expenses. Business Name $ Registration Insurance $ Initial Stock $ Licences and Permits $ Advertising and Promotion $ Printing and Stationery $ Lease/Bond $ Telephone - Landline $ - Mobile $ TOTAL $ What finance do you need to raise now? How do you intend to raise the Finance? Personal Income Bank Loan Building Society Family Friends Other RMIT 2003 5 V5 March 2005
FINANCES cont. POTENTIAL INCOME/TURNOVER Pricing Explain how you calculated the cost of producing your product/service Turnover Expected turnover in the 1 st year How did you calculate this? RMIT 2003 6 V5 March 2005
FINANCES cont. WHAT EXPENSES WILL YOU INCUR OVER THE FIRST 12 MONTHS OF OPERATION Complete the following checklists of projected business expenses for the first 12 months of operation of your business.. Accounting $ Advertising $ Bank Charges $ Cleaning $ Fuel, Light & Power $ Insurance $ Interest $ Internet Service Provider $ Lease $ Legal $ Motor Vehicle - Fuel and Oil $ - Registration & Insurance $ - Repairs and Maintenance $ Postage $ Printing $ Protective Clothing $ Purchases - Equipment $ Stock $ - Raw materials $ Rent/Bond $ Stationery $ Superannuation $ Telephone - Landline $ - Mobile $ WorkCover $ TOTAL $ RMIT 2003 7 V5 March 2005
FINANCES cont. What are your current monthly financial commitments? Rent/Mortgage $ Personal loans $ Schooling $ Petrol $ Car running $ Food $ Clothing $ Recreation $ Medical $ TOTAL $ List any current mortgages, personal loans, hire purchase, leasing other commitments you hold. Financial Type of loan Repayment Period of loan Institution per month $ $ $ $ $ RMIT 2003 8 V5 March 2005
MARKET RESEARCH Market research involves collecting information about your market segment where they live, what their income is, what they spend their income on anything about them that will help you ensure your product is attractive to them. Market research will involve: Talking to people who are in similar fields jewellery Talking to your target market (i.e. people you believe will use/buy your product or service). Talking to people who have specialist knowledge of the industry you are entering. Sourcing written material specific to your area of interest. Gathering statistical data relevant to your area of interest. Prepare your questions before you approach people. To find out about your target market you must be prepared to ask hard questions or exploratory questions that will give you a sound understanding of your target market, how they think and what will appeal to them. To ensure that the information gathered is relevant, select people who have detailed knowledge and experience in the industry sector you propose to enter. Ask targeted questions, designed to provide realistic feedback on your business idea. Accordingly questions should be framed to draw information on the positives and negatives of the industry sector you propose entering. For a business to be successful there must be enough people who want to buy your product or service. You also need to ensure your product or service is accessible to the people who may want to buy it. It has to be available in the right places in the right quantities and presented in a way that will be attractive to your customer. The people you are aiming your product at are your target market or market segment. In the space below, write down the questions you will ask to identify your market segment eg 1. Why would you choose this product/service? 2. How would describe most people who buy this product/service? 3. Where would you look to find this product/service? 4. What would you expect to pay for this product/service? 5. How often would you buy this product? 6. If you would like more information about this product, contact RMIT 2003 9 V5 March 2005
MARKET RESEARCH cont. Number of questionnaire s Results Person consulted Date Summarize the information collected during this consultation. Profile your prospective customer or market segment (i.e.:- where do they live? how much do they earn? how old are they? are they men? women? etc.) RMIT 2003 10 V5 March 2005
SALES & DISTRIBUTION Why will your prospective clients use your product or service? How will you sell your product or service? (eg: from home, production point, door to door, wholesale, retail, mail order etc.). Will you sell your product to the wholesale or retail market? Who will the wholesaler sell to? Will you sell locally, regionally, statewide, nationally or internationally? How will you deliver your product to the point of sale? RMIT 2003 11 V5 March 2005
Competition Find out if other businesses are providing the same or a similar product or service. To do this, look at ads in the local paper, check the phone book and talk to people. If there are other businesses providing your product or service, then you need to establish very clearly that there is an unsatisfied demand in the marketplace which your business will target. It is important that you know your competition. Learn from what they do well, identify what you can do better. Competition does not just come from businesses that are the same or similar to yours, you are competing for the dollars that people spend in that market segment. Report your findings. Who is your competition? What do they do well? What can you do better/differently? How does your business address unsatisfied market need? RMIT 2003 12 V5 March 2005
GETTING STARTED Look in the phone book and/or local paper and talk to other people in the service or industry to find out who provides the best service delivery or has the best equipment and follow up service. Consider terms, discounts, delivery time, maintenance contracts, second hand goods etc. Where will you obtain the equipment for your business? Local suppliers Melbourne Interstate A nearby town Overseas Do you intend to buy, lease, hire purchase or rent the equipment for your business? STOCK When considering which supplier you will obtain your stock from, you need to first find out the reliability of that supplier, the credit terms they provide, the type and quality of the stock they distribute, the consistency of supply, what follow up support and technical advice they provide. What stock will you purchase on a regular basis? RMIT 2003 13 V5 March 2005
LICENCES & PERMITS Business Name registration (Provide details or evidence of research undertaken on requirements). ABN/GST Registration (Provide details or evidence of research undertaken on requirements). The Business Licensing Information Service & Small Business Victoria can provide information on many things for Small Business. You also need to check with your local council to make sure you comply with any regulations they may have. What essential licences/permits do you need to operate your business? (Provide details or evidence of research undertaken on requirements). Insurance requirements (Provide details of Quote obtained or evidence of investigation undertaken on Requirements). Please Note: 1. NEIS Business are expected to have insurance coverage appropriate to the Business and the industry. 2. Such insurance should be what a reasonable, informed, person would consider appropriate for the business. 3. Appropriate insurance for the business and industry should be determined during the NEIS training and incorporated in the prospective participant s final Business Plan. Proposed Premises Home based or Commercial Premises. Location. Ownership Structure Sole trader/ Partnership/Company RMIT 2003 14 V5 March 2005
YOUR BUSINESS IDEA What Small Business experience do you have? List the skills you need to operate this business. What skills do you have now that will allow you to produce your proposed product or provide your service? What skills do you need to gain to further develop your product or provide your service? Tick areas that you currently hold business management skills in Bookkeeping Record Keeping Marketing Personnel Management Time Management Motivation Communication skills Planning and Goal Setting Insurance Business Licensing and regulation Customer Service Other We recommend that you attach your current resume and relevant qualifications. RMIT 2003 15 V5 March 2005