Posted: April 20th, 2022

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall
First Screen

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall
First Screen
From “Preparing Effective Business Plans” by Bruce R. Barringer
Part 1: Strength of Business Idea
For each item, circle the most appropriate answer and make note of the (-1), (0), or (+1)
score.
Low Potential (-1) Moderate Potential (0) High Potential (+1)
1. Extent to which the
idea:
 Takes advantage
of an
environmental
trend
 Solves a problem
 Addresses an
unfilled gap in the
marketplace
Weak Moderate Strong
2. Timeliness of entry to
market
Not timely Moderately timely Very timely
3. Extent to which the
idea “adds value” for
its buyer or end user
Low Medium High
4. Extent to which the
customer is satisfied
by competing
products that are
already available
Very satisfied Moderately satisfied Not very satisfied
or ambivalent
5. Degree to which the
idea requires
customers to change
their basic practices
or behaviors
Substantial
changes required
Moderate changes
required
Small to no
changes required
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall
Part 2: Industry-Related Issues
Low Potential (-1) Moderate Potential (0) High Potential (+1)
1. Number of
competitors
Many Few None
2. Stage of industry life
cycle
Maturity phase or
decline phase
Growth phase Emergence phase
3. Growth rate of
industry
Little or no growth Moderate growth Strong growth
4. Importance of
industry’s products
and/or services to
customers
“Ambivalent” “Would like to have” “Must have”
5. Industry operating
margins
Low Moderate High
Part 3: Target Market and Customer-Related Issues
Low Potential (-1) Moderate Potential (0) High Potential (+1)
1. Identification of target
market for the
proposed new
venture
Difficult to identify May be able to identify Identified
2. Ability to create
“barriers to entry” for
potential competitors
Unable to create May or may not be able
to create
Can create
3. Purchasing power of
customers
Low Moderate High
4. Ease of making
customers aware of
the new product or
service
Low Moderate High
5. Growth potential of
target market
Low Moderate High

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall
Part 4: Founder- (or Founders-) Related Issues
Low Potential (-1) Moderate Potential (0) High Potential (+1)
1. Founder or founders
experience in the
industry
No experience Moderate experience Experienced
2. Founder or founders
skills as they relate to
the proposed new
venture’s product or
service
No skills Moderate skills Skilled
3. Extent of the founder
or founders
professional and
social networks in the
relevant industry
None Moderate Extensive
4. Extent to which the
proposed new
venture meets the
founder or founders
personal goals and
aspirations
Weak Moderate Strong
5. Likelihood that a
team can be put
together to launch
and grow the new
venture
Unlikely Moderately likely Very likely
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall
Part 5: Financial Issues
Low Potential (-1) Moderate Potential (0) High Potential (+1)
1. Initial capital
investment
High Moderate Low
2. Number of revenue
drivers (ways in
which the company
makes money)
One Two to three More than three
3. Time to break even More than two
years
One to two years Less than one year
4. Financial
performance of
similar businesses
Weak Modest Strong
5. Ability to fund initial
product (or service)
development and/or
initial startup
expenses from
personal funds or via
bootstrapping
Low Moderate High
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall
Overall Potential
Each part has five items. Scores will range from -5 to +5 for each part. The score is a
guide—there is no established rule-of-thumb for the numerical score that equates to high
potential, moderate potential, or low potential for each part. The ranking is a judgment
call.
Score
(-5 to +1)
Overall Potential of the
Business Idea Based on
Each Part
Suggestions for
Improving the
Potential
Part 1:
Strength of Business
Idea
High potential 
Moderate potential 
Low potential 
Part 2:
Industry-Related
Issues
High potential 
Moderate potential 
Low potential 
Part 3:
Target Market and
Customer-Related
Issues
High potential 
Moderate potential 
Low potential 
Part 4:
Founder- (or
Founders-) Related
Issues
High potential 
Moderate potential 
Low potential 
Part 5:
Financial Issues
High potential 
Moderate potential 
Low potential 
Overall Assessment High potential 
Moderate potential 
Low potential 
Homework help – Summary—briefly summarize your justification for your overall assessment:

———

Pearson Education, Inc. is the sole owner of the intellectual property. Prentice Hall is the publisher.
First excerpt from Bruce R. Barringer’s “Preparing Effective Business Plans.”
Part 1: The Business Idea’s Strength
For each item, circle the best answer and record the (-1), (0), or (+1) score.
Potentially Harmful (-1) Potentially Moderate (0) (+1) High Potential
1. The extent to which the idea: capitalizes on an environmental trend; solves a problem; or fills an unfilled market gap.
Weak Moderate Strong
2. Market entry timeliness
Inadequate timing Relatively timely This is extremely timely.
3. The extent to which the concept “adds value” for the buyer or end user
Low, Medium, and High
4. The extent to which the customer is satisfied by currently available competing products
Very pleased Moderately

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