Even before you begin writing a business plan for your new venture, there are two things you should do: conduct a feasibility study and undergo a Strengths, Weaknesses, Opportunities and Threats (SWOT) analysis. These processes will help you determine if your business will be viable and if it is worth the time, effort and money it will take to launch and build it.
What is a feasibility study?
A feasibility study has several parts, starting with a description of your business. This is the easy part—you simply need to provide as much detail as you can about what your business will do, such as the products and services you will offer. You should also provide detailed descriptions of how the business will be organized and who will run it.
The second part is a market description. Who is your target audience for your business? How big is this market, and is there growth potential in this market moving forward? Will you be able to improve your product or service or add new products or services to increase your target market size? What competition will you have? These are all examples of questions you need to be able to answer as part of your feasibility study.
Third, you will need to outline the technical details of your products or services, including the equipment or technology required for delivering them. Other things to consider are the kinds of materials you will need, transportation necessary for product delivery, the availability of resources and utilities and the size of the facilities you might need.
Finally, you must consider the financial factors at play in developing your business. How much money will it take to get the business started, and then to keep it going? For example, you might have to either purchase or lease expensive equipment, furniture or office space. How will you get the capital you need at various stages of your company’s growth?
A SWOT analysis likely involves many of the same elements as a feasibility study. The goal is the same—to determine the viability of your potential business.
When looking at your strengths, you should primarily consider what makes your business special. This could include any unique characteristics of your company that set you apart from the competition, access to the materials you need, the distinctiveness of a product or service, the experience of your staff and/or access to solid investments and financing.
What aspects of your business could potentially hold you back? Immediate concerns could be a lack of financing or experienced staff, but other issues could be high costs of production or products that are not exactly innovative or unique.
Factors outside your business could put you in a better position to succeed. Examples could include a lack of competition in your general area or target market, a growing demand for your product or service or new advances in technology that will make it easier to sell or improve your offering.
Threats are the inverse of opportunities. To that end, examples could include stiff competition, a bad business location, regulations that make it more costly or difficult to do business or changes in your target consumers that could inhibit your ability to succeed.
For the guidance you need when starting a business in the U.S. Virgin Islands, work with an experienced business and corporate planning attorney.
Tom Bolt is Managing Attorney at BoltNagi, a respected and well-established corporate law firm, proudly serving entrepreneurs and business owners throughout the U.S. Virgin Islands.