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Veggie Bread

In: Business and Management

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2.3. Conducting a feasibility study

2.3.1. Introduction
2.3.2. Market analysis
2.3.3. Technical feasibility
2.3.4. Financial feasibility

2.3.1. Introduction

Aspiring entrepreneurs may have an idea about the type of fruit or vegetable product that they would like to make. This can come from seeing others successfully producing a food and wanting to copy them or from talking to friends and family members about products that they think they could make. However, an idea for a business is not a sufficient reason to begin production straight away, without having thought clearly about the different aspects involved in actually running the business. Too often, people invest money in a business only to find out later that there is insufficient demand for the product or that it is not the type that customers want to buy. To reduce this risk of failure and losing money, potential producers should go through the different aspects of running their business in discussions with friends and advisers before they commit funds or try to obtain a loan. This process is known as doing a feasibility study and when the results are written down, the document is known as a business plan.

Conducting a feasibility study need not be difficult or expensive, but the most important aspects should all be taken into account to ensure that potential problems are addressed. These are summarised in the Feasibility Study Checklist in Appendix III and are described in more detail in other Sections of this book. In this Section, the following questions that can be answered by a feasibility study are addressed:

· is there a demand for the produce?

(Find out the characteristics required of the product and the size and value of the market)

· who else is producing similar products?

(Determine the number and type of competitors)

· what...

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