risks+of+failure 

Judging the viability of a business plan

Any reader of a business plan should be able to see clear indicators of the potential of a business project.

Questions that should be answered by an investigation of a business plan would include:

• Are the financial resources available –even if loans are included, is there enough working capital? This is one of the major reasons why new businesses fail

• Are the skills needed available – do the owners, employees, have the abilities to fulfil the plans?

• Are the objectives realistic – can the sales levels be achieved, are the output targets feasible?

• Will the competition react in a way that could undermine the business – what if a financially stronger competitor reduces prices in reaction to the new competition?

• Are the economic conditions right – will a change in exchange rates impact upon the business?

The answers to these questions will provide a total sum of the risk involved in starting a new business