94  Business Plan and Feasibility Analysis

94.1 Concept

Business Plan = a formal written document describing the business idea, market, operations, team, and financials, used for internal direction and external financing. Bygrave & Zacharakis — “a business plan is the chronological story of a future business”. William Sahlman (HBR 1997) — emphasised People · Opportunity · Context · Risk-Reward Deal as the four key questions.

94.2 Why Write a Business Plan?

TipPurposes of a business plan
  • Clarify the business idea internally.
  • Attract investors / lenders.
  • Apply for licences and approvals.
  • Test feasibility rigorously.
  • Recruit co-founders / employees.
  • Manage operations and milestones.
  • Benchmark against actuals.
  • Communicate to stakeholders.

94.3 Structure of a Business Plan

TipTypical business plan sections
  1. Executive Summary — the most important section.
  2. Company Description — vision, mission, structure.
  3. Industry & Market Analysis — TAM-SAM-SOM, Porter’s 5 Forces.
  4. Competitive Analysis — direct, indirect.
  5. Product / Service Description.
  6. Marketing Plan — STP, 4 Ps, customer acquisition.
  7. Operations Plan — location, processes, suppliers.
  8. Management Team — backgrounds, advisors.
  9. Financial Projections — 3-5 years; P&L, BS, Cash Flow.
  10. Funding Request — amount, use, exit.
  11. Risk Analysis — sensitivity, contingency.
  12. Appendices — letters, resumes, patents.

94.4 Feasibility Analysis

TipFive feasibility dimensions
  • Market feasibility — TAM, target customers, competitors.
  • Technical feasibility — technology, raw materials, location.
  • Financial feasibility — cost, revenue, break-even, NPV/IRR.
  • Organisational feasibility — team, management.
  • Legal-Regulatory feasibility — permits, IP, environment.
  • Sometimes added: Social / Environmental / Ethical.

94.5 Tools and Frameworks

TipTools
  • TAM-SAM-SOM — Total/Serviceable/Serviceable Obtainable Market.
  • Porter’s 5 Forces.
  • SWOT.
  • PESTEL.
  • Business Model Canvas — Osterwalder (2010).
  • Lean Canvas — Ash Maurya.
  • Value Proposition Canvas.
  • Unit economics — CAC, LTV, contribution margin.
  • Break-even analysis.
  • NPV, IRR, Payback.
  • Sensitivity / Scenario analysis.
  • MVP — Minimum Viable Product (Ries).

94.6 Business Model Canvas (BMC)

TipBMC — 9 building blocks (Osterwalder)
  1. Customer Segments.
  2. Value Propositions.
  3. Channels.
  4. Customer Relationships.
  5. Revenue Streams.
  6. Key Resources.
  7. Key Activities.
  8. Key Partnerships.
  9. Cost Structure.

94.7 Lean Canvas

Ash Maurya adapted BMC — replaces Key Partners/Activities/Resources/Customer Relations with: Problem, Solution, Key Metrics, Unfair Advantage.

94.8 Financial Plan Essentials

TipFinancial-plan components
  • Revenue projections — units × price.
  • Cost projections — fixed + variable.
  • Break-even point: \(BEP = \frac{FC}{P - V}\).
  • Profit & Loss (5 years).
  • Cash flow — operating, investing, financing.
  • Balance sheet — assets, liabilities, equity.
  • Capital expenditure plan.
  • Working-capital requirement.
  • Sources of funds.
  • Sensitivity analysis — best/worst case.
  • Valuation — DCF, Multiples, Pre/Post-money.

94.9 Pre-Investment Studies

TipProject evaluation studies
  • Pre-feasibility study — initial.
  • Detailed Project Report (DPR).
  • Techno-Economic Feasibility Report (TEFR).
  • Environmental Impact Assessment (EIA).
  • Social Impact Assessment.
  • UNIDO Manual for project appraisal.
  • Little-Mirrlees Method.

94.10 Investor-Ready vs Operational Business Plans

TipPlan variations
  • Investor pitch deck — 10-12 slides (Guy Kawasaki 10/20/30 rule).
  • Executive summary — 1-3 pages.
  • One-pager.
  • Full plan — 25-50 pages.
  • Lean plan.
  • Operational plan — internal.
  • Strategic plan — long term.

94.11 Indian Context

TipIndia context
  • DPIIT Startup recognition — requires business overview.
  • Niti Aayog AIM — Atal Incubators expect business plans.
  • Term Loans from SIDBI, NABARD — need DPRs.
  • EPCG, Stand-Up India loans — business plan.
  • Business Plan competitions: Wharton India · Tata Social Enterprise Challenge · BITS · IIT · IIM events.
  • PSU lending — public-bank loans require detailed project reports.

94.13 Practice Questions

Q 01Most importantMedium

The most important section of a business plan is the:

  • AExecutive Summary
  • BAppendices
  • CCover page
  • DIndex
View solution
Correct Option: A
First-read, decision-maker hook.
Q 02BMCMedium

Business Model Canvas has how many blocks?

  • A9
  • B5
  • C7
  • D11
View solution
Correct Option: A
Osterwalder 9 building blocks.
Q 03SahlmanHard

Sahlman (HBR 1997) gave 4 questions on:

  • APeople, Opportunity, Context, Risk-Reward Deal
  • BProduct, Place, Price, Promotion
  • CStrength, Weakness, Opp, Threat
  • DFive Forces
View solution
Correct Option: A
"How to write a great business plan".
Q 04TAM-SAM-SOMMedium

TAM stands for:

  • ATotal Addressable Market
  • BTargeted Audience Market
  • CTop Available Market
  • DTertiary Aggregate Market
View solution
Correct Option: A
TAM = total demand. SAM/SOM narrow it down.
Q 05Break-evenMedium

Break-even (units) = ?

  • AFC / (P − V)
  • BFC × P
  • CVC / P
  • DP − V
View solution
Correct Option: A
Fixed cost / contribution per unit.
Q 0610/20/30Hard

Guy Kawasaki's 10/20/30 rule means:

  • A10 slides, 20 min, 30-pt font
  • B10 pages, 20 charts, 30 yrs
  • C10 % equity, 20 % team, 30 % VC
  • D10 risks, 20 KPIs, 30 days
View solution
Correct Option: A
Pitch-deck guideline.
Q 07Lean CanvasMedium

Lean Canvas is by:

  • AAsh Maurya
  • BOsterwalder
  • CRies
  • DBlank
View solution
Correct Option: A
Ash Maurya adapted BMC.
Q 08MVPMedium

MVP stands for:

  • AMinimum Viable Product
  • BMaximum Value Product
  • CMulti-Variant Plan
  • DMarketing Validation Phase
View solution
Correct Option: A
Eric Ries Lean Startup.
Q 095 dimensionsMedium

"Feasibility" does NOT include:

  • AAstrological
  • BMarket
  • CTechnical
  • DFinancial
View solution
Correct Option: A
Market, Technical, Financial, Organisational, Legal.
Q 10DPRMedium

DPR is required by:

  • ATerm lenders / PSU banks
  • BCustomers
  • CEmployees
  • DAuditors only
View solution
Correct Option: A
Detailed Project Report — for project finance.
Q 11UNIDOHard

UNIDO Manual is for:

  • AProject appraisal
  • BTax planning
  • CTrade
  • DAudit
View solution
Correct Option: A
UN Industrial Development Organization manual.
Q 12Little-MirrleesHard

Little-Mirrlees method is for:

  • ASocial cost-benefit / project appraisal
  • BStatistical sampling
  • CCurrency hedging
  • DTax
View solution
Correct Option: A
Ian Little & James Mirrlees — shadow prices.
Q 13CAC LTVHard

In unit economics, LTV/CAC ratio above what is healthy?

  • A3:1
  • B1:3
  • C10:1
  • D0.5:1
View solution
Correct Option: A
LTV at least 3× CAC.
Q 14PivotMedium

"Pivot" in startups means:

  • AStructured course correction
  • BIPO
  • CAcquisition
  • DHiring CEO
View solution
Correct Option: A
Lean Startup concept.
Q 15Match canvasHard

Match:

(i) BMC (a) Maurya
(ii) Lean Canvas (b) Ries
(iii) MVP (c) Osterwalder
(iv) 10/20/30 rule (d) Kawasaki
  • A(i)-(c), (ii)-(a), (iii)-(b), (iv)-(d)
  • B(i)-(a), (ii)-(b), (iii)-(c), (iv)-(d)
  • C(i)-(b), (ii)-(c), (iii)-(d), (iv)-(a)
  • D(i)-(d), (ii)-(a), (iii)-(c), (iv)-(b)
View solution
Correct Option: A
BMC—Osterwalder; Lean—Maurya; MVP—Ries; 10/20/30—Kawasaki.

94.13.1 Advanced Format Questions

AR 1Assertion-ReasonHard

A: Executive Summary is the most read part of a business plan.
R: Sahlman (HBR 1997) gave 4 questions investors ask.

  • ABoth true; R explains A
  • BBoth true; R does not explain A
  • CA true, R false
  • DA false, R true
View solution
Correct Option: B
S 1Statement-basedMedium

BMC blocks: (i) Customer Segments. (ii) Value Propositions. (iii) Channels. (iv) Cost Structure.

  • AAll four (subset of 9)
  • B(i) and (ii) only
  • C(iii) and (iv) only
  • D(i) only
View solution
Correct Option: A
N 1NumericalMedium

FC ₹2 L; SP ₹100; VC ₹60. BEP units:

  • A5,000
  • B2,000
  • C3,333
  • D10,000
View solution
Correct Option: A
2,00,000/(100−60) = 5,000.

94.14 Quick Recall

ImportantQuick recall
  • Business plan — Bygrave-Zacharakis; Sahlman (HBR 1997) 4 questions (People · Opportunity · Context · Deal).
  • Purpose: clarify · finance · approvals · feasibility · team · ops · communicate.
  • Structure (12 sections): Executive Summary · Company · Market (TAM-SAM-SOM, 5 Forces) · Competitive · Product · Marketing (STP/4Ps) · Operations · Management · Financials · Funding · Risk · Appendices.
  • Feasibility: Market · Technical · Financial · Organisational · Legal-Regulatory · (+Social/Environmental/Ethical).
  • Tools: TAM-SAM-SOM · 5 Forces · SWOT · PESTEL · BMC (Osterwalder 2010) 9 blocks · Lean Canvas (Ash Maurya) · Value Proposition Canvas · Unit economics (CAC, LTV — LTV/CAC ≥ 3:1) · Break-even (FC/(P−V)) · NPV/IRR/Payback · Sensitivity · MVP (Ries).
  • Financial: revenue · cost · break-even · P&L/BS/CF · capex · working capital · funding sources · sensitivity · valuation (DCF, multiples).
  • Pre-investment studies: Pre-feasibility · DPR · TEFR · EIA · Social IA; UNIDO Manual · Little-Mirrlees social cost-benefit.
  • Plan variants: Pitch deck (Kawasaki 10/20/30) · Exec summary · 1-pager · Full plan · Lean plan · Operational · Strategic.
  • India: DPIIT recognition · AIM Atal Incubators · SIDBI/NABARD DPR · Stand-Up India · biz-plan competitions (IIT/IIM/Tata SEC).
  • Modern: Lean · MVP · pivot-friendly · ESG · AI-drafts · data-driven · OKRs · Gen-AI pitch decks · no-code FP&A · continuous planning · DEI · climate.