Homework: Business Case
The paper should be written as if this concept was actually going to be developed rather than offering ideas of what might or should be done. The business case will include the following three topic areas:
Feasibility Assessment: In your paper provide a review of six feasibility considerations that relate to the ability to produce this solution:
1) Economic considerations (How much will it cost to build this innovation and what resources are required to make it?)
Mobile app development will cost $100,000 US
Testing will cost $10,000 US
2) Technical considerations (Do components exist or must they be developed to complete the product? Is a prototype necessary? What is the life span or rate of obsolescence?)
3) Operational considerations (What people, plants or partnerships are required to delivery the product?)
4) Risks considerations (Identify risks associated with the innovation - environmental, transactional, financial, personnel, etc.)
5) Legal considerations (Are contracts, copyrights, patents, certification or other legal conditions required?)
6) Strategic considerations (Do we have the right talent, resources, knowledge and passion to develop this innovation?)
The Plan: This section will briefly describe how the solution will be built and delivered to the market. Since this is only the first estimate of revenue and costs the numbers can be general as long as they align with the customer profile and the description of the innovation. This section will include a review of:
1) 4C's of Customer Feasibility
2) Company structure (Is this a startup, part of an existing company, partnership with existing organization?)
3) Timing (How long will develop and market launch take and what are the key stages?)
4) Financial (How many customers exist, how many will buy from us, what will the average sale be, what is the average cost of that sale, and what is the expected return?)
Getting to Market -
Context
In order to determine whether there is sufficient funding to launch an innovation, forecasts and a pro forma budget must be developed. If additional funding is needed, income statements, balance sheets, business ratios, and decisions regarding the type and source of those funds must be made. This homework will compile that financial information for the new venture.
Task
Using your innovation concept and business plan, develop the following items:
1) Pro Forma Budget for first three years
a) Forecast for Revenue
b) Forecast for Cost of Goods Sold
c) Forecast for Sales Expense
d) Forecast for Administrative Expense
2) Summarize the budget information in an Income Statement
3) Estimate the initial equity investments, assets and liabilities and develop a Balance Sheet that reflects the venture at the end of its first year of operation.
4) Using information from these statements, determine what capital resources are needed to launch the venture. In 3-5 paragraphs identify your capital funding needs, explain the best source of obtaining the capital, and state what you expect to pay to access that capital.
5) In one paragraph summarize the financial feasibility of launching the innovation.
Format your homework according to the following formatting requirements:
(1) The answer should be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides.
(2) The response also includes a cover page containing the title of the homework, the student's name, the course title, and the date. The cover page is not included in the required page length.
(3) Also include a reference page. The Citations and references should follow APA format. The reference page is not included in the required page length.