| As part of the assessment process,
the feasibility study often is the first time the consumer thinks concretely
about the proposed business and puts his or her ideas on paper. Similarly,
it is the VR counselor's first opportunity to evaluate the business
idea and the consumer's ability to articulate it. The study looks at
the business's potential and how realistic the consumer is about it.
Often it is the first time the consumer thinks about certain aspects
of the business such as the reasons why customers would use his or her
product or services over those of another business, or about the monthly
sales needed to make a living and a profit. Although the feasibility
study is important it is only an initial estimate of the business's
likelihood of success.
There is no one acceptable format for a feasibility study. Some feasibility
studies are very time consuming and complicated requiring a complete
market analysis, complex calculations or projections such as monthly
operating expenses, cost of goods sold, gross profit margin, and monthly
sales required. Sometimes feasibility studies are conducted by an independent
business consultant. Others consist of a series of questions about the
business.
We recommend conducting a feasibility study using the Beginning to Develop
Your Business Plan questionnaire (Figure 3) and the Monthly Personal
and Living Expenses Worksheet (Figure 4). If your state is a licensed
user of the Goodman, Herzog & Associates Business Assessment Scale
(discussed later in this chapter), we recommend including this in the
feasibility study too.
Completing the Monthly Personal and Living Expenses Worksheet complements
the Beginning to Develop Your Business Plan questionnaire because it
is an opportunity for both the consumer and counselor to evaluate the
consumer's monthly expenditures in relation to the business. Additionally,
this provides an opportunity for the counselor and consumer to discuss
the need for a business to pay taxes and provide benefits for the owner
and employees.
Many potential business owners have a difficult time answering the following
Beginning to Develop Your Business Plan questions, however. So the consumers
you work with may require your help. Their answers might be unclear
and they might overestimate things like anticipated income or the expected
number of customers. Because feasibility study is one of the main tools
you will use to decide whether or not to proceed, you may ask the consumer
to rethink his or her answers and conduct more research until you are
satisfied. Many people do not move beyond this stage and decide not
to pursue self-employment. You will need to decide the reasons for not
completing this step. Is it due to the individual's disability? Could
he or she complete the feasibility study with more guidance from you
or another? Or is some sort of assistive technology needed?
Because the feasibility study may be new to many people, you may want
to encourage the consumer to take advantage of agencies and organizations
that conduct educational programs on developing a feasibility study:
Small Business Development Centers, Entrepreneurial Education Foundation's
Premiere FastTrac program, the Disabled Businesspersons Association
and educational programs offered by many business schools and colleges.
Others such as consultants, CPAs, and accountants who focus on small
businesses also may be able to assist consumers with conducting a feasibility
analysis.
Figure 3: Beginning to Develop you Business Plan
Answer the following questions in writing for review by your
vocational rehabilitation counselor. For some questions, you may
need to talk to business owners or do some research at the library.
Your answers will help both you and your counselor clarify your
business idea. Your answers are the beginning of your Business
Plan and may help your counselor determine whether you and Vocational
Rehabilitation should work together toward the goal of self-employment.
- What business would you like to start?
- Who will use your service and/or buy your product(s)?
- Where are your customers located?
- How many customers do you think you will have during the
first year? During the second year?
- How much money do you think you will make during the first
year? During the second year?
- How will you tell potential customers about your business?
- Is there another business like the one you want to open operating
in the area you want to serve? Is it successful? Why or why
not?
- Why do you want to start this type of business?
- What qualifications do you already have for running this
business?
- What will you need to learn to be able to operate this business?
- Will you hire employees? What skills should they have? How
much will you pay them?
- If you were a potential customer, why would you use this
business?
- If you were a customer, what features would keep you coming
back?
- Who will do the ordering, customer contact, and bookkeeping
for your business?
- What hours and days will you operate?
- Where will your business be located?
- What equipment will you need? Do you need it right away?
If not, when will you need it? Do you need to own it or can
you rent it?
- Will your disability pose any barriers to your operating
this business? If yes, what are they? What are your ideas for
overcoming these barriers?
- How much money will you need to start the business? How much
money can you contribute? Who can loan you money? What do you
think are likely sources of money for starting your business?
|
Figure 4: Monthly Personal and Living Expenses
Enter actual expenses for the past 4 months from your records and keep
track of expenses for this and the next month. Label the months in the
spaces provided at the top of the table.
Monthly Personal and Living Expenses
| Month |
Amount |
Amount |
Amount |
Amount |
Amount |
Amount |
Total |
| Dwelling: |
|
|
|
|
|
|
|
| Rent Payment |
|
|
|
|
|
|
|
| House Payment |
|
|
|
|
|
|
|
| Property Tax |
|
|
|
|
|
|
|
| House Repair |
|
|
|
|
|
|
|
| Miscellaneous Expenses (lawn mowing, cleaning, snow shoveling) |
|
|
|
|
|
|
|
| Homeowner’s Association Dues |
|
|
|
|
|
|
|
| Insurance |
|
|
|
|
|
|
|
| Furniture/Appliance Payments |
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
| Transportation |
|
|
|
|
|
|
|
| Car Payment(s) |
|
|
|
|
|
|
|
| Other Vehicle Payment(s) |
|
|
|
|
|
|
|
| Vehicle Upkeep/Repair |
|
|
|
|
|
|
|
| Fuel |
|
|
|
|
|
|
|
| Insurance |
|
|
|
|
|
|
|
| License(s) |
|
|
|
|
|
|
|
| Public Transportation |
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
| Utilities |
|
|
|
|
|
|
|
| Telephone |
|
|
|
|
|
|
|
| Gas |
|
|
|
|
|
|
|
| Electricity |
|
|
|
|
|
|
|
| Water |
|
|
|
|
|
|
|
| Trash |
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
| Personal |
|
|
|
|
|
|
|
| Groceries |
|
|
|
|
|
|
|
| Dining Out |
|
|
|
|
|
|
|
| Entertainment |
|
|
|
|
|
|
|
| Tobacco Products |
|
|
|
|
|
|
|
| Medical/Dental/Vision Insurance |
|
|
|
|
|
|
|
| Clothing |
|
|
|
|
|
|
|
| Laundry/Dry Cleaning |
|
|
|
|
|
|
|
| Medical/Dental/Vision/Hospital Exp |
|
|
|
|
|
|
|
| Prescriptions |
|
|
|
|
|
|
|
| Education |
|
|
|
|
|
|
|
| Credit Card Payments |
|
|
|
|
|
|
|
| Loan Payments |
|
|
|
|
|
|
|
| Pets |
|
|
|
|
|
|
|
| Dues & Subscriptions |
|
|
|
|
|
|
|
| Gifts |
|
|
|
|
|
|
|
| Donations |
|
|
|
|
|
|
|
| Travel |
|
|
|
|
|
|
|
| Cable TV |
|
|
|
|
|
|
|
| Personal |
|
|
|
|
|
|
|
| Hobbies/Crafts |
|
|
|
|
|
|
|
| Music |
|
|
|
|
|
|
|
| Personal Assistant |
|
|
|
|
|
|
|
| Assistive technology purchase, payments & maintenance |
|
|
|
|
|
|
|
| Internet Access |
|
|
|
|
|
|
|
| Other: |
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
| Total |
|
|
|
|
|
|
|
Average Expenses per Month (Total ÷ 6 months) $_________
Sources of Income:
Source
Amount per Month
________
_______________
________ _______________
________
_______________
Chapter 4 Self-Employment Assessment Study Guide:
Feasibility Study
- The feasibility study gauges the business's __________ and how _______
the consumer is about it.
- The __________ estimates the likelihood of the business's success.
- __________ may provide loans on a feasibility study alone.
Study Guide Answers: Chapter 4 - The Feasibility Study
© July 1998, 1st Revision June 1999, 2nd Revision February 2001 |
PREVIOUS PAGE NEXT PAGE 
TOP OF PAGE