A Feasibility Analysis

A Feasibility Analysis: A Startup Business – A Counseling Center

The business idea of a counseling center that has been improved following the Covid-19 pandemic portrays excellent potential. This business idea is excellent because in addition to addressing uncertainties in the business environment, the idea will ensure that the most productive work environment and a talented pool that will promote performances and productivity. In a research by Berry, the primary goal of enterprises and startup businesses is to ensure that personal and organizational goals are achieved[1]. The achievement of organizational and personal goals is necessary because it drives the company towards the achievement of financial goals and have enough savings. Careful analysis and planning are critical because they help in the identification of flaws, which ensures that managerial and organizational competence are achieved.

One of the important features of the counseling sector is that it has portrayed consistent growth in the last five years. This rapid growth can be linked to the high level of demand despite the varying economic conditions. The increased demand in the industry has acted as an insulation over the years, prompting consumers to seek these services from both private and public counseling centers. The increased demand can also be linked to the broad adoption of technologies, which can be used to promote he provision of these services to a broad range of consumers. In an article by Beidas et al., a feasibility analysis in the counseling sector is critical because it helps in the determination of effective success strategies, which can help in the achievement of financial and social rewards[2].

Considering that the current market in the health sector is highly competitive, it is essential to ensure that the most talented pool of employees is selected and financial wastages minimized. The current business idea focuses on hiring only highly experienced employees with high educational attainment. Hiring experienced employees with high educational attainment will ensure that money used for wages is reduced. Reducing the capital used in paying wages for les educated and experienced employees will help the company save money, which can be used for the acquisition of scarce resources. Minimizing the number of employees will also play an important role in minimizing the operating costs. The operating costs for the business will be $340,636, $351,641, and $362,519 for 2021, 2022, and 2023 respectively. Although the expenses are increasing annually, the increase is relative to the increasing revenues and profits, and the increasing demand for services. The net sales of the business are also increasing throughout the years, from $308,000 in 2021 to $400,050 in 2023. This increase is an indication of increased demand for services and an increasing market base. Because of the high quality of services, consumer acquisition and loyalty have increased significantly.

The gross operating cash flow for the business indicates that there will be interest payable, disposable financial assets, changes in the inventory, and dividends. The cashflow of the business is increasing from the starting date to 2023. The cash balance in 2021 was $63,640, $127,178 in 2021, and $191,062 in 2023. An increasing cash balance indicates that there is an increase in the liquid assets. Increased liquid assets indicate that the firm is better positioned to pay its expenses, address future financial uncertainties, reinvest in the business, and cover other financial obligations[3]. Cashflow is important because it helps a firm on how to allocate cash movements throughout the different financial periods. The expected sources of cash and expenses are accounted for, ensuring that the business has adequate cash to address future financial needs of the firm (Manitoba.ca)[4]. The increasing cashflow in the company will ensure that there is enough cash to take care of financial uncertainties in the highly dynamic business environment.

Although the business idea is feasible, there are specific areas which should be adjusted. One of the areas is minimizing the payroll burden. The payroll burden can be addressed by ensuring that there is proper employee classification. Employee classification is the ability of a company to legally classify employees to show the relationship between employers and employees. Employees can be classified as independent contractors or employees. The firm can benefit from this practice by hiring more freelancers, which indicates that there will be a reduction of financial expenses. Another change that can be made to minimize employee payroll is by relying on technologies. The use of computers can help in the automation of tasks, which in turn will lower the financial expenses of the firm.

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[1] Berry, Gregory R. Feasibility Analysis for the New Venture Nonprofit Enterprise. New England Journal of Entrepreneurship. 2017, 20 (2), pp. 53-69.

[2] Beidas Rinad S., Becker-Haimes Emily M., and Marcus Steven C. Feasibility and acceptability of two incentive-based implementation strategies for mental health therapists implementing cognitive-behavioral therapy: a pilot study to inform a randomized control trial. 12 (148). 2017. https://doi.org/10.1186/s113012-017-0684-7

[3] Beidas Rinad S., Becker-Haimes Emily M., and Marcus Steven C. Feasibility and acceptability of two incentive-based implementation strategies for mental health therapists implementing cognitive-behavioral therapy: a pilot study to inform a randomized control trial. 12(148). 2017. https://doi.org/10.1186/s113012-017-0684-7

[4] Manitoba.ca. Agriculture, Food, and Rural Development. Why Cash Flow is Key. (n.d). https://www.gov.mb.ca/agriculture/business-and-economics/financial-management/print.why-cash-flow-is-key.html