Estimating a business opportunity's economic vitality
Evaluating a new business opportunity can be an overwhelming task. There are many things to consider but the most important is to determine whether the business can generate a level of sale sufficient to generate a profit. If the business is not able to generate a sales revenue that are equal to or exceed expenses, it is most like not an economically viable business proposition. Before spending time and resources on developing a feasibility study and/or business plan, there prepare a break-even analysis which will provide an estimate of the sales required to cover total costs. If the break-even analysis reveals that estimated sales revenue significantly exceed the estimated cost of doing business, it is worthwhile investing more time and resources to conduct comprehensive feasibility study. This check-list will introduce you to break-even analysis and provide an example presenting the basic tools required to perform a coursery business opportunity evaluation. However, it is important to remember the more detailed the information that is collected regarding the business proposition, the better the analysis and resulting conclusions regarding the proposition's economic viability.