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Launching a business without a formal business plan would be like taking a cross-country road trip without any directions. A company's business plan is its road map, and without a clear, understandable route, your business will be sure to hit a dead end.

An often neglected precursor to the in-depth business plan that should be performed is the feasibility plan, or sometimes called the feasibility analysis. If the business plan is the map, then the feasibility plan serves to make sure your tires have air and the gas tank is full.

So why should one take the time to write a feasibility plan? Simple, it can provide enough insight into the viability of a potential venture before dumping time, money, and other resources into the project. Everyone has heard the staggering statistics on the failure rate of new ventures, and the major cause of this can be attributed to the lack of research and planning dedicated to the idea before diving in. Do your homework and you'll likely succeed in your business endeavor.

So why not just jump right into the business plan? First, the feasibility plan generally consists of about six pages of informal text, while the business plan will often run over 30 pages of carefully crafted writing. Second, the information gathered for the feasibility plan will be used in the business plan anyway, thus potentially saving a lot of time and effort if the plausibility is deemed unlikely.

The feasibility analysis is typically developed in six stages after general research is conducted.

1. Industry Profile: skills needed in the industry, your experience in the industry, factors giving rise to new opportunities, etc.

2. Capturing the business idea and assessing feasibility: value proposition, need for product/service, uniqueness, proprietary nature, expansion potential, liability risk, etc.

3. Researching market and customers: customer profile, customer benefits, target markets, competitions' weaknesses, news value, etc.

4. Gathering competitive intelligence: number of competitors, threat levels, barriers to entry, etc.

5. Estimating price and profitability (for 3 years): funding ability, estimated start-up costs, pricing, projected profit and loss statement, revenue streams, inventory needs, distributor profile, gross margins, exit strategy, legal issues, etc.

6. Future action plan: schedules, timetables, hiring employees, etc.

This should provide a solid idea of whether the business is viable in the market it is trying to penetrate. Here is where you must

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