MT207 Unit 5 Feasibility Study Example

A Conditional Yes Before the Van Is Bought: A Unit 5 Feasibility Study for a Dryer Vent Cleaning Service

[Student Name]

Purdue University Global

MT207: Starting a Business

Unit 5 Feasibility Study

[Instructor Name]

[Date]

Clearline Vent Care, its founder and every figure are composite and illustrative; bracketed figures stand where quotes and records would supply the numbers; the sources cited are real.

Purpose and Method

Barringer and Ireland (2019) describe feasibility analysis as the step between an idea and a business plan, in which a founder tests whether the product, the industry, the organization and the finances can support a venture. This study follows that order, using the Unit 3 market count, the Unit 4 competitor calls, quotes from two equipment suppliers and an insurance broker, and the founder's own budget. Each test asks a question that could be answered no.

Market Feasibility

The question is whether enough buyers exist within reach. The Unit 3 summary estimated about [15,300] cleanings a year within a forty-minute drive, worth roughly [$915,000], with a long lead time from the dominant competitor and no rival offering airflow readings or reports. Fourteen of twenty-two property managers said their vents had gone more than two years without cleaning, and eleven said they would look at a proposal.

The weakness is concentration. Most of the value sits in apartment contracts, and property owners set vendor budgets in November. A venture that misses the November window waits a year for most of its contract revenue. The test passes, with a timing condition: proposals must reach managers by the end of October.

Operational Feasibility

The question is whether the work can be done safely, legally and at the expected pace. The work requires a van, a rotary brush system and a high-powered vacuum, an inspection camera, an airflow meter, ladders and fall protection for roof terminations, and a stock of rigid metal duct and replacement vent hoods. All are available from two suppliers within a week.

Pace is the main operational assumption. The founder timed herself cleaning vents in her current building: about [12] minutes per unit on short runs, [25] minutes on long runs with a roof termination. At an average of [18] minutes, a technician can clean about twenty apartment units in a working day, allowing for setup, resident access and travel between buildings. Homes take about forty-five minutes each, plus travel, so four to six a day is realistic.

One open item remains. If a technician replaces crushed foil duct inside a wall, the work may require contractor registration with the state's labor department. The founder will confirm before offering duct replacement; cleaning alone does not appear to require it. The test passes with that item open.

Disposal is simpler than in many trades. Lint and debris go into sealed bags with ordinary commercial trash, and no wash water is produced, so no sewer or environmental permit applies to the cleaning itself. Old foil duct removed during repairs goes to a metal recycler, which takes it free.

Founder Feasibility

The question is whether this founder can run this business. She has eleven years of apartment maintenance, including five as a supervisor, and knows how property managers buy, what they fear and how residents react to a technician at the door. She has managed vendor schedules for a 300-unit community. She has never run a business, kept books or sold a service.

Two gaps follow. The first is technical: she has cleaned vents in her own buildings but holds no industry certification. A dryer exhaust technician certification course costs about [$450] and takes two days, and several managers said their insurers would ask for it. The second is commercial: she has bought services but never sold them. She plans to take the local small business development center's free course on sales and bookkeeping before launch. The test passes, conditionally on both steps.

Financial Feasibility

The question is whether the venture can cover its costs and pay its owner. Monthly fixed costs come to about [$4,250]: an owner's draw of [$2,600], the microloan payment of [$410], the van payment of [$341], insurance of [$310], phone and booking software of [$140], marketing of [$350] and accounting of [$100]. The owner's draw is modest, about [$31,200] a year, which is less than half her current salary.

Each home cleaning at [$119] carries variable costs of about [$14] for fuel, supplies and card fees, a contribution of [$105]. Each apartment unit at [$42] carries about [$5] in variable costs, a contribution of [$37]. Homes alone would require about forty-one cleanings a month to break even. Apartments alone would require about [115] units a month, which is roughly six days of apartment work.

That second figure is what makes the venture feasible. A single 200-unit community on an annual contract, cleaned building by building, contributes about [$7,400] a year, enough to cover nearly two months of fixed costs. Three communities with 600 units would cover almost half the year's fixed costs before any homeowner calls.

Cassar (2010), studying nascent entrepreneurs' forecasts, found that their sales expectations were generally optimistic compared with what they later achieved. That finding argues for setting the condition on signed letters rather than on the founder's projections, and for assuming that homeowner volume will come in below plan. Kahneman and Lovallo (1993) described the same pattern as an inside view, in which planners focus on their own case and neglect how similar ventures usually turn out. The study answers it by requiring evidence from buyers before money is spent.

A spreadsheet of hoped-for homeowners cannot carry this business; three signed apartment letters can.

Summary of Verdicts

Market feasibility passes, on condition that proposals reach managers before the November budget decisions. Operational feasibility passes, with the contractor registration question to be confirmed before duct replacement is offered. Founder feasibility passes, on condition that she completes the certification and the small business course. Financial feasibility passes only if apartment contracts sign, since homeowner volume alone would take too long to cover fixed costs.

Recommendation

The venture is feasible on one controlling condition: letters of intent from at least three apartment communities totaling 600 units, collected by mid-November, before the founder buys a van or resigns. If the letters come in, she should proceed to the business plan and funding request. If fewer than two communities sign, she should keep her job, offer weekend homeowner cleanings with rented equipment for one season, and test demand again next fall. A study that can only say yes is not a test, and this one names the result that would mean no.

References

Barringer, B. R., & Ireland, R. D. (2019). Entrepreneurship: Successfully launching new ventures (6th ed.). Pearson.

Cassar, G. (2010). Are individuals entering self-employment overly optimistic? An empirical test of plans and projections on nascent entrepreneur expectations. Strategic Management Journal, 31(8), 822-840. https://doi.org/10.1002/smj.833

Kahneman, D., & Lovallo, D. (1993). Timid choices and bold forecasts: A cognitive perspective on risk taking. Management Science, 39(1), 17-31. https://doi.org/10.1287/mnsc.39.1.17