Emerging Market Feasibility Analysis - Assignment Example

? School: Topic: EMERGING MARKET FEASIBILITY ANALYSIS Lecturer: EMERGING MARKET FEASIBILITY ANALYSIS Aim and Objectives The aim of this project work is to broadly undertake an emerging market feasibility analysis that seeks to explore the feasibility for the start up of a small scale business in Brazil. Brazil is selected as an emerging market with some generalized economic and trade accolades as an upper middle income economy with high human development base (Amine, and Staub, 2005). Brazil is also identified as a member of the Organization for Brazil, Russia, India and China (BRIC), G-20, G8+5, and a founding member of the North American Free Trade Agreement (Fafchamps, 2003). These accolades are however identified to be very broad and generalized and cannot influence any rational decision making as to the liability of a new entrant business in Brazil. To make such decision making credible, rational and accurate, a more technical approach to viewing Brazil as an emerging market is needed. It is for this reason that the current emerging market feasibility analysis to come close up with Brazil as a destination for the small scale company. The purpose of the study is also to critically analyze the feasibility of the business in surviving in the intended market. There shall therefore be focus on the company with some level of emphasis on the company’s investors, customer issues, and financial requirements. In totality, the emerging market feasibility analysis shall be conducted from five objectives given as: 1. To analyse the strength of the business idea in relation to the chosen market. 2. To identify any country-related issues that might affect the start-up. 3. To explore relevant business and customer norms in the identified market. 4. To analyse potential financial issues that will arise from starting the business. 5. To propose a prototypical founder or group of founders suitable for the oil manufacturing firm that is being proposed? Research Approach Generally, this project is a case study that studies the specific case of the feasibility of a new vegetable oil manufacturing company in Brazil as a small scale business. As part of the case study approach, there shall be elements of both primary and secondary data collection to ensure that data collected for the study is high coordinated, validated and judged as reliable. Using a combined approach of primary and secondary data collection will improve the internal validity of the study because data that are collected from the field of study as primary data can easily be justified or authenticated using secondary data, which is more of data already existing in literature. One crucial approach that will make the project very elaborate, well organized and focused is the use of feasibility analysis matrix. This matrix has been presented in such a way that it contains five major session of data collection, which have been distributed among the five objectives listed above. This means that each of the five objectives is represented in one section or row of the matrix. Under each objective also, there shall be five feasibility indicators that will be critically analyzed using both primary and secondary data collection. The analysis of the indicators shall be done in a manner that scores the feasibility of each objective of the project. Completed feasibility analysis matrix shall be presented at the appendix section of the project. Within the project however, there shall be a detailed discussion of the findings that are made under each objective of the study. Theoretical Framework This section of the project named theoretical analysis is essentially useful in offering a theoretical background to the problem of small scale business entry into emerging markets. This will be done through clearly defined knowledge of literature presented in one specific paradigm of theory. Specifically, focus is given to the theory of emerging market development. This theory started much like a support service given to new businesses that wanted to start up offices and branches in various emerging markets; specifically the N-11 emerging markets (Krueger and Brazeal, 1994). Through the scope of services rendered by the outfit that was offering the emerging markets development, a theory was coiled to be known by the same name to conceptually outline areas of academic and practical applications that needed to be considered in any scenario of new entrant viability into emerging markets. Generally, the theory argues that new entrant competition into emerging markets is a business development idea that must be approached as such (Mangaliso, 2001). What this means is that when entrepreneurs are thinking of opening new offices and branches in emerging markets, whether they may be having existing companies or not, what they are actually doing is that they are engaging in business development (Krueger and Brazeal, 1994). This is where the focus of the new business opening becomes centered on a number of stakeholders and decision making premises including the entrepreneur, country of business establishment, and the nature of business being established. Even though there are different schools of thought that try to attest to which of the three factors is most influential in business development, it can be appreciated with any doubt that all three premises or factors are important (Baumol, 1990). In this project therefore, same level of emphasis is place on all three premises. Writing on the topic of business development, which is the central idea in the emerging market development theory, Mangaliso (2001) stressed that business development is a multi-variant approach to business establishment, that is made up of several tasks and processes. Some researchers have also identified business development as a cycle of business practices that keeps revolving on a constant basis to ensure that the establishment of one’s business sees the light of day and becomes competitive in the market where it is opened (Amine, and Staub, 2005). Generally, there are key aspects of business development that ran through most literature and works of research. Initial market research is one of these aspects of business development that require entrepreneurs and other stakeholders in the establishment of the new business to critically understudy the market where they are intending to invest. This is because there are several market conditions and factors that easily serve as determinants of new entrant successes and failures (Bigsten, et al, 2002). It is therefore important for the business owners to be aware of how favorable the market is to them through initial market research. Another aspect of market development is economic and financial appraisal of the venture. Here, the idea of entering the market or starting the small scale business is advised to be seen as a project that that must be appraised for its economic and financial viability (Enz, Dollinger and Daily, 1990). A refusal to undertake critical economic and financial appraisal has been said to be the cause of white elephant projects and business. That is, it leads to a situation where businesses are started and never completed because of poor funding. Cost-benefit analysis is also a crucial component of market development and for that matter emerging market development. Normally, most investors have been criticized for overlooking the need to continue the process of business development after they have been convinced through the economic and financial appraisal that they are in a better position to launch and sustain their markets (Baumol, 1990). However, doing this without cost-benefit analysis could be highly detrimental to the fate of new businesses. The reason is that cost-benefit analysis actually gives the investor an idea of how profitable the whole business venture that he is targeting is. The reason for this is very simple as a cost-benefit analysis educates the business owner on the possibility of benefiting from the cost that he puts in the business opening. This way, businesses should not be opened merely because entrepreneurs have monies to spare but because entrepreneurs have found ventures that will yield the best of financial benefits for them (Fafchamps, 2003). Finally, environment assessment has been rated as a crucial component of business development. By environmental assessment reference is being made to a wide array of market analysis that is similar to the initial market research. The difference here however is that environmental assessment may look into several aspects of the market than the initial market research will bring. With the environmental assessment, one of the commonest approaches that can be used is the PESTEL analysis of the market, which looks into the political, economic, social, technological, environmental and legal factors that influence operations in a particular country. Dimensions of Market Analysis Strength of Business Idea As part of the strength of a business idea, it is expected that the business plan that is prepared takes advantage of prevailing environment trend within the market. Rightly so, the business plan that was prepared identified an environmental trend in the fact that there exist food and soap manufacturing companies within the Mexican commercial industry that have great need of vegetable oil as raw material (Enz, Dollinger and Daily, 1990). However, most of these companies import from abroad, making the raw material expensive for them. The plan is therefore in place to fill that gap in market place and also solve the problem of the said industries by starting a vegetable oil business. Even though the gaps have been rightly identified, timelines of entry into the market is very important in ensuring that the entry meets the best of commercial business activity season to make initial entry a booming one (Dumas, 2001). There are shortfalls in this area as far as the business plan is concerned because there is not much room made for timelines of entry to market. This is because even though there is an all round food and soap production activity in Brazil, there are peak seasons and the current time of entry is not the peak season. The cultural norms in a country has been identified to be a very important determining factor in the successful launch of any market product such as the vegetable oil that is presently targeted. This is because the cultural norm determines the attitude of consumers towards the product. Currently, a cultural phenomenon for the use of vegetable oil in the making of soaps and general food products such as rice is in place and promoted by the Food and Drugs Standard and Regulatory Board of Brazil. This is because it has been found that vegetable oil present nutritional and health advantages as compared to other types of oil such as animal oil (Bigsten, et al, 2002). As far as the Mexican market is presently, there will be virtually no stiff competition for the new company, even though it will not enjoy monopoly in the vegetable oil manufacturing industry. This is because there are foreign companies in the same trade and there are also foreign imports. However, industries have been identified to prefer dealing with country factories as compared to foreign imports as the former is cost effective (Amine, and Staub, 2005). Among the existing foreign companies in the country also, they are not able to meet their demands from food and soap industries and so the new company will not have much of competition with them. There are two major forms of users that can be identified in this context. The first of these are industries, and the second is ordinary day to day consumers. As far as industries are concerned, there will be the highest score for needs of users. It is with ordinary country users that there will be some level of reduced scoring because of the nature of pricing that has been targeted. Generally, because of the high demand, prices have been targeted to go up, and even though industries can easily afford this, ordinary consumers may have problems with high prices. Country-related Issues As far as political, economic and business environmental stability are concerned, several researchers and reviewers have scored B+ to B for Brazil as an emerging market destination. This is because the country has been politically stable for a number of years now. What is more, the country associates itself with several multinational trade and economic associations that makes international trading highly favorable in that country. G-8+5, BRIC, G-20, Amazon Trade and APEC are examples of such associations. In terms of business environment, Brazil is regarded as a newly industrializing country with so much potential for both new and existing business (Scherer et al, 1989). As an emerging country, the government of Brazil has much premium for foreign direct investment. This is because the government is of the school of thought that this is a very important way of expanding the business and commercial base of the country (Dumas, 2001). With idea in mind, there is virtually zero to minimal government restrictions on the starting of businesses. This is especially so when the business being started is in the area of agriculture. This is because the government sees agriculture as the backbone of the country’s economy and thus a major contributor to the country’s gross domestic product. Even though the government places virtually no restrictions on business establishments and openings, it is open secret that government does not involve itself directly in the funding or financing of foreign companies. This is because the major focus of growth is on, and with local industries. To this end, foreign companies are often left to be their own financiers (Scott, 2001). There is however some level of hope to an extent where there is no limitation on the business functioning of international banks in the country, most of whom prefer to give loans and other forms of financial support to foreign companies. On the part of the local people as consumers and stakeholders for the growth and survival of foreign or outsider companies, it will be said that there cannot be guaranteed 100% acceptance and tolerance. This is because there is a generalized perception among local people that foreign products are expensive and focused only on industries rather than on ordinary purchasers. That is, most foreign manufacturing companies are in the wholesale business, making retailing of their products expensive. There is however a different school of thought that holds the idea that, products from foreign companies are of higher quality and so accepts outsiders greatly. The legal system of Brazil has been praised on the international level as conforming to international standards of legal justice and fairness. This is especially so when it comes to issues of international trade systems (Scherer et al, 1989). There are for example, specialized commercial courts that hear only business cases to ensure that such cases are fast tracked and free of delays. What is more, there are reliable financial and accounting firms and services that offer services to both local and foreign companies. It is therefore possible and easier to rely on external quality assurance services for all auditing services. Business- and customer-related issues There are indeed vegetable oil manufacturing companies on the Mexican market. The only issue with these clusters of businesses and other similar businesses such as those that manufacture palm oil and animal oil is that their number is not as large as the industries that make use of their products as raw material. There has therefore always been the need for food and soap industries to import extra raw material. There is therefore the presence of businesses similar to the one being analyzed but this is not a major threat to the business being analyzed as there can be personalized competitive advantages to overcome competition. It will be noted that in general terms, the business being analyzed is a foreign vegetable oil manufacturing small scale business. Within this category, there is massive challenge with the availability of loans and other forms of investment capital. This is because even though government does not inhibit the entry of foreign companies, most of government assisted support goes to local industries and the services sectors. Meanwhile, most banks and financial institutions in the country are government owed or government funded. Most foreign companies have therefore had to come into the country with their own investment capital secured (Dumas, 2001). There are two types of local customers who are industries and individual buyers. As far as industries are concerned, it can be said that there is high purchasing power because these customer buy for manufacturing purposes, making them earn incomes on the expenses they make on their budget. There is however an imbalance with individual buyers, most of whom do not have high purchasing power. The reason for this situation is that there continues to be a trend of commercialization where money has been said to be unevenly distributed. In effect, there is a huge gap between the rich and the poor. As an emerging market, Brazil has developed most of its ports for the sake of exportation. Indeed, the presence of well equipped port infrastructure and facilities make the country a preferred destination for most international industries to purchase raw material for. Therefore even though there is not the likelihood that in the easiest stages, the new company will go into exportation, when the time for exportation of products comes, the company will not be at a disadvantage at all. More specifically for the vegetable oil industry, there is a global notion that the best of vegetable oils come from Brazil because of the nature of natural agriculture practices used by farmers. Such as with the disparity with the rich and poor in Brazil, there is similar disparity in national development. This is to say that infrastructural development and modernity has been focused in the Rio, which is the national capital and other regional capitals. This makes room for several parts of the county to be plagued with poor transportation, lack of dependable utilities and lack of qualified labor force. Meanwhile, within the supply chain, the need for national distribution will require that all these places with poor infrastructure and utilities are covered. This situation puts the new business in a challenging corner in terms of infrastructure limitations. Founder Related Issues The founder may not hold the highest educational qualification but he has a very good understanding of business both as an academic area of study and a professional area of practice. There is an educational study in business and commerce and this is hoped to influence the understanding of the entrepreneur greatly in the market competition. In comparison to some of the existing CEOs and founders of other competitive companies however, it would be noted that most of them have better credentials than the founder of the new business in question. In terms of successful entrepreneurs in the same business area in Brazil who may be used as local role models, it would be said that this is very lacking as there are not as many known entrepreneurs in the business of vegetable oil manufacturing as there are entrepreneurs in other aspects of the economy. It has been noted through primary research that even though there are as many business openings in the selected area as possible, most of these are owed by the same old entrepreneurs. This notwithstanding, there few entrepreneurs could give inspiration to the new entrepreneur. Regardless of the absence of role models, there remains massive intrinsic and extrinsic motivation for the founder of the new business. Intrinsically, the founder is motivated with self believe and support from people around such as family and friends. Statistics on the penetration success rate is also a major form of intrinsic motivation that keeps the founder going. In terms of extrinsic motivation, the forecasted commercial turnover for the investment that is being done is sufficient motivation that the investment is a profitable one. This gives the founder a very high score on the premise of motivation to carry out his ambition successfully. There is relatively moderate to high skill in the area of product that the founder is seeking to invest in. This judgment is given on the basis of the fact that the founder has had a personal opportunity to work in an oil manufacturing company. However, the founder was not a front runner in the company in which he worked. Though there is some level of skill therefore, this skill is predominantly unskilled labor. This could however be used in transmitting some levels of motivation to other workers to work in the premise of the company. There are some levels of country biases in the commercial structure of Brazil. However, this form of bias has generally been regarded as informal and not having very great influence on the founder in becoming an entrepreneur. Commonly, the bias that exists takes place on a basis where when offered with the chance of selecting two of male and female children to invest in terms of education, parents will choose their male wards (Bigsten, et al, 2002). This however does not mean that the country does not embrace and celebrate female achievers. Happily, there are no known biases on the basis of religious and ethnic discrimination in Brazil even though Catholicism dominates in the country. Financial issues Even though projections for the viability of the business suggests that there is massive potential for the business in surviving in its new market, initial funds available can only help in starting a small scale business in the vegetable oil manufacturing sector. Because the funds available cannot really meet the standard of medium scale business, which is currently needed for this type of industry, it would be said that initial capital investment is medial scoring. This is because in terms of small scale, capital available will be very sufficient for a start up. The external funding and capitalization of businesses is predominantly focused on local businesses. This is part of a government economic policy that is focused more on microeconomic development as against macroeconomic development. Unfortunately, most financial institutions that could be of support to the business are also government owned. There are very few, in the numbers of two or three nongovernmental organizations and financial institutions that can be relied on to provide external financial assistance to the business, especially in its type of business operation. These include foreign capital funding firms and foreign banks. Accuracy in forecasting of income, expenses and taxes is one of the major advantages or strengths of the new market. This is generally due to the presence of highly credible accounting and auditing firms to undertake these on a professional basis. With the depth of experience of these accounting and auditing firms, most of whom have worked and with several multinational companies in Brazil have credibility of providing high degree of accuracy (Scott, 2001). On an informal and arbitrary level, the fact that demand for local vegetable oil for the food and soap industries have not been met yet means that income is likely to be higher. By the principle of demand and supply, whenever demand is higher than supply, profit goes up. Meanwhile, business profitability is one of the most important indicators of business financial performance of businesses (Bigsten, et al, 2002). With higher profitability, companies get the urge to become financially viable and competitive. Because local businesses engaged in vegetable oil production have always received much demand than they can supply, they have always exceeded their forecasted income levels and have therefore become very profitable. The financial performance of similar businesses therefore presents a competition to the new business but with the projection that the new business would have its share of this profitability this competition is not expected to pose any commercial threat. Because the company is going to operate as a small scale manufacturing company, there is the confidence that it can fund its initial product development. The capital injection is expected to come from internal sources such as the savings of the founder and other close stakeholders, rather than external sources. This dimension of the financial issues aspect of the feasibility analysis is however rated moderate instead of high because in terms of existing companies, the new company will be one of the smallest to operate in the country. If funding had been higher than it currently stands, the rating could have gone higher. Recommendations As long as timing to entry is concerned, it is recommended that the business be made to hang in the pipeline until the peak season for the industry is on before making market entry. Once this is done, it is expected that the company will be met with massive patronage and initial profitability. This alone can be an extrinsic motivation to ensure that the company continues to strive in competition. On the needs and market segmentation of the business however, it is strongly recommended that in other to make higher scores, the company should include individual buyers instead of industries alone. This will require that prices should be lower than estimated. This will also help the company in gaining favor in the eyes of the local people. In the nearest future when the need for public offer arises, several people will be willing to patronize the company because the company will be seen as a people-centered company. Generally, government but no restrictions and inhibitions to entry but government is not willing to fund new foreign companies. In order to maximize capitalization therefore, it is strongly recommended that the founder identifies a local bank or financial institution within his own country to use as an external financier. This is because even though some of the foreign banks in Brazil will be willing to support, this support is expected to come at very dates. On the part of culture of the people towards outsider companies, it is recommended that the new company present a new business focus that has ordinary people and communities at heart. This can be achieved through various forms of corporate social responsibility. Fixing of prices to meet the purchasing power of the people will also be another prudent option. The business-and customer-related issues was the lowest scoring of all the sections or categories available. This notwithstanding, there are interventions that can be put in place to ensure that the situation does not negatively affect the fortunes of the company in surviving in the new market. For example as a way of meeting the purchasing power of customers, it has been said that pricing should be pegged with the individual buyer in mind, instead of industries. This is because industries will always be in a position to buy at higher prices because they use their purchases as raw materials to also determine the cost of their finished products. With reference to poor infrastructure, it will be recommended that the setting of the company be strategic enough to be pegged at a location where infrastructure and utilities will not come with much cost to the company. It has been established that there are not as many founders within the premises of Brazil to be used as role models as possible. This is because the area of business that the new company is going to operate within is controlled by only few owners. This must however not be a major hindrance because other founders in similar emerging markets as Brazil can be used. With this said, name like Thailand, Venezuela and Brazil readily comes to mind. These are countries with as many founders vegetable manufacturing companies as possible. On an individual basis, it is recommended for the founder to seek further professional skill and education in the area business he is beginning. There could be several options for this, including the possibility of learning on the job. With the available initial capital in hand, the establishment of a small scale company is rightly placed for the new business. But in order to ensure that the capital is well utilized, it is important to avoid the setting up of many branches for now. Instead, there should be a centralized operational system that focuses production from only one or two outlets where the quantum of capital injection can ensure that emphasis is placed on quality instead of quantity. In terms of external funding also, the best alternative available to the company is to use financial institutions within his parent country rather than targeting local financial institutions as the possibility of receiving any support from these companies is highly minimal (Scott, 2001). Conclusion The conclusion section of this project is one of the most important areas of the project. This is because the conclusion is basically an aspect of the project that equips the researcher with a critical thinking task, requiring him to construct a theory out of the entire emerging market feasibility analysis that has been constructed. As part of the use of critical thinking, the conclusion shall be undertaken through three major steps of critical thinking approach. The first of these is the determination of facts around the new situation that has been developed through the study without any prejudice. As far as this is concerned, it has been gathered as a matter of fact that the business plan that was being studied for the opening of vegetable oil manufacturing small scale business in Brazil has a lot of potential in succeeding in the intended market. Facts around all five parameters of feasibility measurement show scores from medium to high, with virtually no low marks recorded. With such scores, it can be said that the three main areas of business development identified earlier as the entrepreneur, the product or service and the market have all been rightly satisfied. The second step of critical thinking approach is the placement of facts and information in a prototype or model that makes it easier to be understood by the researcher and all others who use this project. In line with this, it will be stated that even though the general outlook of the business plan has been judged as viable and applicable for the intended market, there are generally high points, low points and neutral points with the business plan. These points are given in relation to the five aspects of feasibility measurement. The low point in the business plan will be identified to be the business-and customer-related issues. This is because there were several indicators under this aspect that not many high mark were scored. The neutral point will be given for founder related issues and financial issues. To be given neutral point means that these areas are very stable, though can be improved to ensure more robust market viability. Finally, high points will be given to strength of business idea and country-related issues. Apart from the fact that these were the highest scoring as exhibited in the matrix in the appendix, it implies that these two aspects are very robust. The final step of the critical thinking approach that is being used to conclude the project is the acceptance or rejection of sources of values that have been made in the entire project. The sources of value for this project have so far been both primary and secondary data. Primary data were collected as first hand field information that came directly from the sources of the research problem namely the business and the market. Secondary data on the other hand came from existing works of literature that were related and relevant to the area of study. Generally, because of how complementary the two sources or forms of data have been to each other, nothing much can be doubted of the authenticity of the findings that have been presented in the project. Based on the internal reliability that can be established from the data collection process, it can be concluded that the source values and hence judgments made on the feasibility of starting a small scale vegetable oil business in Brazil is indeed possible. References Amine, L.S., and K.M. Staub. 2005. Women entrepreneurs using the P2P business model in transitional economies of Eastern Europe. Working Paper, Department of Marketing, John Cook School of Business, St. Louis University, St. Louis MO 63108, USA. Baumol, W.J. 1990. Entrepreneurship: productive, unproductive, and destructive. Journal of Political Economy 98: 893–921. Bigsten, A., P. Collier, S. Dercon, M. Fafchamps, B. Gauthier, and J.W. Gunning. 2002. Credit constraints in manufacturing enterprises in Africa. Journal of African Economies 12: 104–25. Dumas, C. 2001. Evaluating the outcomes of micro-enterprise training for low income women: A case study. Journal of Developmental Entrepreneurship 6: 97–128. Enz, C.A., M.J. Dollinger, and C.M. Daily. 1990. The value orientations of minority and non-minority small business owners. Entrepreneurship: Theory and Practice 15: 23–35. Fafchamps, M. 2003. Ethnicity and networks in African trade. Contributions to Economic Analysis & Policy 2: 1–51. Krueger Jr, N.F., and D.V. Brazeal. 1994. Entrepreneurial potential and potential entrepreneurs. Entrepreneurship Theory and Practice 18: 91–104. Mangaliso, M.P. 2001. Building competitive advantage from ubuntu: Management lessons from South Africa. Academy of Management Executive 15: 23–33. Scherer, R.F., J.S. Adams, S.S. Carley, and F.A. Wiebe. 1989. Role model performance effects on development of entrepreneurial career preference. Entrepreneurship Theory and Practice 13: 53–73. Scott, W.R. 2001. Institutions and organizations. Thousand Oaks, CA: Sage. Appendix Feasibility Analysis Matrix and Scoring used Part 1: Strength of business idea For each item, circle, highlight, or otherwise indicate 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. Degree to which the resulting product or service is compatible with the cultural norms in the country where it will be launched Low Medium High 4. Degree to which the resulting product or service will have to compete with foreign imports High Moderate Low 5. Degree to which the idea is conceived for the needs of users in the country where the resulting product or service will be launched, opposed to adapting an idea from a developed country and applying it in an emerging economy context. Low Medium High Part 2: Country-related issues     Low Potential (-1) Moderate Potential (0) High Potential (+1) 1. Political, economic, and business environment stability Low Moderate High 2. Ability to start a firm in any market or product category—absent government restrictions or excessive red tape Low Medium High 3. Degree to which prevailing cultural values and governmental policies support rather than inhibit entrepreneurial activity Low Moderate High 4. Country’s acceptance and tolerance of “outsiders” and its level of inclusiveness Low Medium High 5. Presence of fair and effective courts and reliable financial and accounting infrastructures. Low Medium High Part 3: Business- and customer-related issues     Low Potential (-1) Moderate Potential (0) High Potential (+1) 1. Presence of “clusters” of businesses similar to the one being analyzed None One More than one 2. Availability of loans and/or investment capital for the type of business being analyzed Low Medium High 3. Purchasing power of local customers or clientele Low Moderate High 4. Presence of export markets for the type of product or service being analyzed Low Moderate High 5. Infrastructure limitations for the business being analyzed, such as poor transportation, lack of dependable utilities, and lack of qualified labor pool. High Moderate Low Part 4: Founder- (or founders-) related issues     Low Potential (-1) Moderate Potential (0) High Potential (+1) 1. Education level of founder or founders Low Moderate High 2. Number of local role models that are successful entrepreneurs Very few Some Many 3. Founder or founders are motivated by both intrinsic (family tradition, need for achievement) and extrinsic (earning more money, status in community) rewards Low Medium High 4. Founder or founders’ skills as they relate to the proposed new venture’s product or service. No skills Moderate skills Skilled 5. Presence of country-specific biases that would prevent founder or founders from becoming entrepreneurs (such as biases against female entrepreneurs) Many Few None Part 5: Financial issues     Low Potential (-1) Moderate Potential (0) High Potential (+1) 1. Initial capital investment High Moderate Low 2. Presence of NGOs and similar organization that provide financial assistance, loans, or investment capital to the type of business being analyzed One Two or three More than three 3. Ability to forecast income, expenses, and taxes with a reasonable degree of accuracy Low Moderate High 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, family funds, or via bootstrapping Low Moderate High Overall potential Each of the five sections of the template above has five individual rows which explore particular aspects of a venture’s feasibility. Tally the scores you assigned for each row in a given section and fill in the score below in the ‘Score’ column. Based on this score, evaluate the overall potential of your business idea in terms of each section of this template. A score of -5 would indicate ‘low potential’, while a score of +5 indicates ‘high potential’. If you feel that the potential is ‘low’ or ‘moderate,’ offer suggestions which might improve the idea and achieve ‘high potential’. N.B.: While scores on either extreme end of the spectrum (-5 or +5) can obviously be assigned to the ‘low’ or ‘high’ categories, scores in the middle of the spectrum can be assigned the ‘low’, ‘moderate’, or ‘high’ categories according to your judgement.   Score (-5 to +5) Overall Potential of the Business Idea for Each Section Suggestions for Improving the Potential Section 1: Strength of Business Idea  3 High potential ? Moderate potential ? Low potential ?   Section 2: Country-Related Issues  3 High potential ? Moderate potential ? Low potential ?   Section 3: Business and Customer-Related Issues  -1 High potential ? Moderate potential ? Low potential ?   Section 4: Founder- (or Founders-) Related Issues  0 High potential ? Moderate potential ? Low potential ?   Section 5: Financial Issues  2 High potential ? Moderate potential ? Low potential ?   Overall Assessment  1.7 High potential ? Moderate potential ? Low potential ?   Summary—briefly summarise your justification for your overall assessment: There is moderate potential because there was averagely a medial score for more of the categories. Even though two sections scored high and two sections scored moderate, one of the high scores is nullified with the low score in one sector, leaving 2 moderate scores and one high score. The modal score is therefore a moderate score. Read More