why entrepreneurs need a feasibility study before a business plan

Feasibility study and business plan: Feasibility Study vs: Business Plan: Understanding the Difference

1. what are feasibility studies and business plans and why are they important, 2. what is it, what are its components, and how to conduct one, 3. what is it, what are its components, and how to write one, 4. what are the similarities and differences between them, 5. what are the scenarios and situations where you need one or both of them, 6. how to apply them to different types of businesses and projects, 7. how to make your feasibility study and business plan effective and successful, 8. what are the key takeaways and recommendations from your blog.

Before launching a new venture or expanding an existing one, entrepreneurs need to assess the viability and profitability of their ideas. This is where feasibility studies and business plans come in handy. These are two different but complementary tools that can help entrepreneurs make informed decisions and secure funding for their projects. However, many people confuse the two or use them interchangeably, which can lead to misunderstandings and missed opportunities. In this article, we will explore the differences and similarities between feasibility studies and business plans, and how to use them effectively.

- A feasibility study is a preliminary analysis that evaluates the potential and practicality of a business idea. It answers the question: Is this idea worth pursuing ?

- A business plan is a detailed document that describes the goals, strategies, and operations of a business. It answers the question: How will this idea be executed and succeed?

Some of the main differences between feasibility studies and business plans are:

1. Purpose : A feasibility study is used to test the viability of an idea before investing too much time and money into it. It can help entrepreneurs identify the strengths, weaknesses, opportunities, and threats of their idea, as well as the market demand, customer preferences, competition, costs, risks, and legal issues. A feasibility study can also provide a go/no-go decision or a recommendation for further research. A business plan, on the other hand, is used to communicate the vision and direction of a business to potential investors, partners, employees, and customers. It can help entrepreneurs secure funding , attract talent, establish partnerships, and monitor progress. A business plan can also serve as a roadmap for implementing and managing the business.

2. Format : A feasibility study is usually a concise and focused report that summarizes the findings and conclusions of the analysis. It can range from a few pages to a few dozen pages, depending on the complexity and scope of the idea. A business plan is typically a comprehensive and structured document that covers various aspects of the business, such as the executive summary, the company description, the market analysis , the product or service description, the marketing and sales plan, the financial plan, and the appendix. It can range from 10 to 100 pages, depending on the size and stage of the business.

3. Timing : A feasibility study is usually conducted before a business plan , as it can help entrepreneurs determine whether their idea is worth pursuing or not. A feasibility study can save entrepreneurs from wasting time and money on an unfeasible or unprofitable idea. A business plan is usually developed after a feasibility study, as it can help entrepreneurs refine and elaborate on their idea. A business plan can also be updated and revised as the business grows and changes.

An example of a feasibility study is a market research that evaluates the demand and preferences of potential customers for a new product or service . An example of a business plan is a pitch deck that showcases the value proposition, the competitive advantage, and the financial projections of a new venture .

What are feasibility studies and business plans and why are they important - Feasibility study and business plan: Feasibility Study vs: Business Plan: Understanding the Difference

A feasibility study is a crucial step in the process of launching a new venture or project. It is an analysis that evaluates the viability of an idea, product, service, or solution before investing time, money, and resources into it. A feasibility study helps to answer questions such as:

- Is there a market demand for the proposed offering?

- What are the technical, operational, legal, and financial requirements and risks involved?

- How much will it cost to develop, produce, and deliver the offering?

- How much revenue and profit can be expected from the offering?

- What are the strengths, weaknesses, opportunities, and threats (SWOT) of the offering and the business environment?

- What are the alternatives and competitors in the market?

A feasibility study typically consists of the following components:

1. Executive summary : This is a brief overview of the main findings and recommendations of the feasibility study. It should highlight the objectives, scope, methodology, results, and conclusions of the analysis.

2. Market analysis : This is a detailed examination of the current and potential market for the proposed offering. It should include information such as market size, segmentation, trends, growth, demand, customer preferences, buying behavior, and competitive landscape.

3. Technical analysis : This is a thorough assessment of the technical aspects of the proposed offering. It should cover topics such as product or service design , specifications, features, functionality, quality, performance, reliability, safety, and compliance.

4. Operational analysis : This is a comprehensive evaluation of the operational requirements and capabilities of the proposed offering. It should address issues such as production or service delivery processes , equipment, materials, labor, facilities, logistics, distribution, inventory, maintenance, and quality control.

5. Financial analysis : This is a rigorous estimation of the financial implications and outcomes of the proposed offering. It should include elements such as cost-benefit analysis , break-even analysis, cash flow analysis , income statement, balance sheet, return on investment, and sensitivity analysis.

6. Risk analysis : This is a systematic identification and mitigation of the potential risks and uncertainties associated with the proposed offering. It should consider factors such as technical, operational, market, financial, legal, regulatory, environmental, social, and ethical risks.

7. Recommendation and conclusion : This is a clear and concise statement of the overall feasibility and desirability of the proposed offering. It should summarize the main findings and arguments of the feasibility study and provide a recommendation on whether to proceed, modify, or abandon the idea.

To conduct a feasibility study , one should follow these steps:

- Define the objectives and scope of the study

- Gather relevant data and information from primary and secondary sources

- analyze the data and information using appropriate methods and tools

- Evaluate the results and compare them with the predefined criteria and benchmarks

- draw conclusions and make recommendations based on the evidence and logic

For example, suppose a company wants to launch a new online platform that connects freelance writers with clients who need content creation services. A feasibility study would help the company to determine the following:

- The size and characteristics of the target market and the potential demand for the platform

- The technical features and functionality of the platform and the development costs and time involved

- The operational processes and resources required to run and maintain the platform and the service quality and customer satisfaction levels expected

- The financial projections and outcomes of the platform and the revenue streams and cost structures involved

- The risks and challenges that the platform might face and the strategies and contingency plans to overcome them

- The recommendation and conclusion on whether the platform is feasible and profitable and the next steps to take

What is it, what are its components, and how to conduct one - Feasibility study and business plan: Feasibility Study vs: Business Plan: Understanding the Difference

A feasibility study and a business plan are two different but related documents that entrepreneurs and business owners need to prepare before launching a new venture. While a feasibility study evaluates the viability of a business idea, a business plan outlines the strategy and goals of the business . In this article, we will compare and contrast these two documents and explain how to create them.

## How to create a business plan

A business plan is a comprehensive document that describes the vision, mission, objectives, strategies, and financial projections of a business . It serves as a roadmap for the business and a communication tool for potential investors, partners, and stakeholders. A business plan should answer the following questions :

- What is the purpose and value proposition of the business?

- Who are the target customers and what are their needs and preferences?

- What are the products or services that the business will offer and how will they differ from the competitors?

- How will the business reach and attract the customers and what are the marketing and sales strategies ?

- What are the resources and capabilities that the business will need and how will they be acquired and managed?

- What are the risks and challenges that the business will face and how will they be mitigated and overcome?

- What are the financial assumptions and projections that the business will make and how will they be measured and evaluated?

A business plan typically consists of the following components:

1. Executive summary : A brief overview of the business plan that summarizes the main points and highlights the key aspects of the business . It should capture the attention and interest of the readers and entice them to read the rest of the document.

2. Company description : A detailed description of the business that covers its history, vision, mission, values, goals, and structure. It should also include information about the founders, team members, and advisors of the business.

3. Market analysis : A thorough analysis of the industry, market, and competition that the business will operate in. It should identify the size, growth, trends, opportunities, and threats of the market and the strengths, weaknesses, opportunities, and threats of the business. It should also define the target market segment and the customer profile and behavior.

4. Product or service description : A clear and concise description of the products or services that the business will offer and how they will meet the needs and solve the problems of the customers . It should also explain the unique selling proposition and competitive advantage of the products or services and how they will be developed, delivered, and supported.

5. Marketing and sales plan : A strategic plan that outlines the marketing and sales objectives, strategies, and tactics of the business. It should specify the marketing mix elements such as product , price, place, and promotion and how they will be implemented and coordinated. It should also describe the sales process and cycle and how the business will generate leads , convert prospects, and retain customers.

6. Operational plan : A practical plan that describes the operational aspects of the business such as the location, facilities, equipment, technology, inventory, supply chain, quality control, legal and regulatory compliance , and human resources. It should also detail the roles and responsibilities of the staff and the organizational chart and culture of the business.

7. Financial plan : A realistic plan that projects the financial performance and position of the business for the next three to five years. It should include the income statement, balance sheet, cash flow statement , break-even analysis, and financial ratios. It should also state the sources and uses of funds and the assumptions and scenarios that underlie the projections.

8. Appendix : An optional section that contains any additional or supporting information that may be relevant or useful for the readers of the business plan. It may include resumes, testimonials, references, patents, licenses, contracts, charts, graphs, tables, or other documents.

To write a business plan , one should follow these steps:

- Conduct a thorough research on the industry, market, and competition and gather relevant and reliable data and information.

- Define the purpose and scope of the business plan and identify the target audience and their expectations and needs.

- Outline the structure and content of the business plan and organize the information into logical and coherent sections and subsections.

- Write the first draft of the business plan using clear , concise, and persuasive language and tone. Use bullet points, headings, subheadings, and numbers to make the document easy to read and understand. Use examples, anecdotes, and stories to illustrate the concepts and ideas.

- Review and revise the draft of the business plan and check for accuracy , consistency, completeness, and clarity. Eliminate any errors, gaps, or redundancies and improve the flow and transitions of the document. Seek feedback from others and incorporate their suggestions and comments.

- Format and design the final version of the business plan and make it visually appealing and professional. Use fonts, colors, images, and graphics to enhance the presentation and impact of the document. Add a cover page, table of contents, and page numbers to make the document easy to navigate and reference.

A business plan is a dynamic and flexible document that should be updated and revised regularly as the business evolves and grows . It should reflect the current situation and goals of the business and incorporate the feedback and learning from the market and customers. A business plan is a valuable tool for the success and sustainability of any business.

What is it, what are its components, and how to write one - Feasibility study and business plan: Feasibility Study vs: Business Plan: Understanding the Difference

Before launching a new venture or expanding an existing one, entrepreneurs need to assess the viability and profitability of their ideas. Two common tools that can help them with this task are feasibility studies and business plans. Although they are often used interchangeably, they have different purposes, scopes, and contents. In this section, we will explore the similarities and differences between these two documents and how they can complement each other.

- Similarities : Both feasibility studies and business plans are based on research and analysis of the market, the industry, the competitors, and the customers. They both aim to provide evidence and rationale for the proposed venture or project. They both use quantitative and qualitative data to support their claims and projections. They both require clear and concise writing and presentation skills to communicate the findings and recommendations to the stakeholders .

- Differences : The main difference between feasibility studies and business plans is the level of detail and the intended audience . A feasibility study is a preliminary document that evaluates the technical , economic , legal , and social aspects of a potential venture or project. It answers the question: Is this idea feasible? A feasibility study is usually conducted for internal use, such as for the management team or the board of directors . A business plan is a comprehensive document that describes the vision , mission , goals , strategies , and action plans of a venture or project. It answers the question: How will this idea succeed? A business plan is usually prepared for external use, such as for investors, lenders, or partners.

- Examples : To illustrate the differences between feasibility studies and business plans, let us consider two hypothetical scenarios. Suppose you want to open a new coffee shop in your neighborhood. A feasibility study would help you determine the demand , the supply , the costs , and the risks of this idea. You would need to research the market size , the customer preferences , the competitor analysis , the location analysis , the legal requirements , and the financial projections . A business plan would help you define the value proposition , the target market , the marketing mix , the operational plan , the organizational structure , and the financial plan of your coffee shop. You would need to outline the vision statement , the mission statement , the objectives , the strategies , the tactics , and the milestones of your business. Suppose you want to develop a new mobile app that connects users with local service providers. A feasibility study would help you assess the technical , the market , the legal , and the social feasibility of this idea. You would need to research the user needs , the existing solutions , the technology requirements , the data protection , and the social impact of your app. A business plan would help you present the business model , the competitive advantage , the revenue streams , the distribution channels , the customer segments , and the cost structure of your app. You would need to describe the problem , the solution , the unique value proposition , the customer relationships , the key resources , and the key activities of your business.

Both feasibility study and business plan are important tools for entrepreneurs and investors who want to evaluate the potential of a new venture or project. However, they serve different purposes and should be used in different situations. Depending on the nature, scope, and stage of your idea, you may need one or both of them to make informed decisions and secure funding. Here are some scenarios and situations where you need a feasibility study, a business plan, or both:

- You need a feasibility study when you have a new idea or opportunity that you want to explore further. A feasibility study is a preliminary analysis that helps you assess the viability and profitability of your idea before investing too much time and money into it. It helps you identify the market demand, the technical requirements, the operational challenges, the legal and regulatory issues , the financial projections, and the risks and opportunities involved in pursuing your idea. A feasibility study can help you answer questions such as: Is there a need or gap in the market that your idea can fill? Can you deliver your product or service in a cost-effective and efficient way? What are the potential revenues and expenses of your idea? What are the strengths and weaknesses of your idea compared to the existing alternatives? What are the external factors that can affect your idea positively or negatively? A feasibility study can help you determine whether your idea is worth pursuing further or not. For example, if you want to start a new online platform that connects freelance writers and editors, you may conduct a feasibility study to see if there is enough demand for such a service, how you can differentiate yourself from the existing competitors, what are the technical and operational requirements to run the platform, how much it will cost to develop and maintain the platform, and what are the potential revenues and risks involved.

- You need a business plan when you have a feasible idea that you want to execute and communicate. A business plan is a detailed document that describes your business idea, your goals and objectives, your strategies and actions, your resources and capabilities, and your expected outcomes and results. It helps you plan and organize your business activities, track and measure your progress and performance, and communicate and persuade your stakeholders and potential investors. A business plan can help you answer questions such as: What is your mission and vision for your business? Who are your target customers and what are their needs and preferences? How will you reach and serve your customers and what value proposition will you offer them? Who are your competitors and how will you gain a competitive advantage over them? What are your short-term and long-term goals and how will you achieve them? What are the key activities, resources, and partners that you need to run your business? How will you generate revenues and control costs? How will you manage and mitigate the risks and uncertainties in your business environment? A business plan can help you turn your idea into a reality and convince others to support your business. For example, if you have a feasible idea for a new online platform that connects freelance writers and editors, you may create a business plan to outline your business model, your marketing and sales strategies, your financial projections, and your funding requirements.

- You need both a feasibility study and a business plan when you have a complex or large-scale idea that requires a thorough evaluation and a comprehensive plan. Sometimes, your idea may be too complex or large-scale to be assessed by a feasibility study alone or executed by a business plan alone. You may need both a feasibility study and a business plan to cover all the aspects and stages of your idea. A feasibility study can help you explore and validate your idea, while a business plan can help you implement and communicate your idea. You may use the feasibility study as a basis for your business plan, or you may conduct them simultaneously or iteratively. For example, if you want to start a new biotechnology company that develops and commercializes innovative drugs, you may need both a feasibility study and a business plan to evaluate the scientific and commercial potential of your drugs, to plan and manage the research and development process, to secure the intellectual property rights and regulatory approvals, to establish the manufacturing and distribution channels, to market and sell your drugs to the customers and payers, and to raise funds from the investors and partners.

Feasibility studies and business plans are both essential tools for entrepreneurs , investors, and managers who want to evaluate the potential and viability of a new venture or project. However, they are not interchangeable and serve different purposes. A feasibility study is a preliminary analysis that assesses whether a project is technically, financially, and legally feasible, as well as socially and environmentally desirable. A business plan is a comprehensive document that outlines the goals , strategies, and operational details of a venture, as well as its market analysis, financial projections, and risk assessment.

To illustrate how feasibility studies and business plans can be applied to different types of businesses and projects, let us consider the following examples:

1. A restaurant: A feasibility study for a restaurant would examine the demand and supply of the target market, the location and accessibility of the site, the availability and cost of raw materials and equipment, the legal and regulatory requirements , the competition and differentiation, and the social and environmental impact . A business plan for a restaurant would specify the vision and mission, the target customers and value proposition, the menu and pricing, the marketing and promotion, the staffing and management, the financial plan and budget, and the contingency plan and exit strategy .

2. A software product: A feasibility study for a software product would evaluate the technical feasibility of the product idea, the market opportunity and customer needs, the competitive landscape and unique selling proposition, the legal and ethical implications , and the social and environmental benefits . A business plan for a software product would describe the product features and benefits , the customer segments and personas , the go-to-market strategy and channels, the revenue model and pricing , the development and testing process, the team and organization, the financial plan and milestones, and the risk analysis and mitigation .

3. A solar farm: A feasibility study for a solar farm would assess the suitability and availability of the land, the solar radiation and climate conditions, the grid connection and power purchase agreement , the capital and operating costs, the legal and regulatory framework , and the social and environmental impact. A business plan for a solar farm would define the objectives and scope, the market and customer analysis, the technical and operational plan, the marketing and sales plan, the financial plan and cash flow , the organizational and governance structure, and the risk management and sustainability plan.

How to apply them to different types of businesses and projects - Feasibility study and business plan: Feasibility Study vs: Business Plan: Understanding the Difference

A feasibility study and a business plan are both essential tools for entrepreneurs who want to turn their ideas into reality . However, they serve different purposes and should not be confused with each other. A feasibility study is a preliminary analysis that evaluates the viability of a business idea, while a business plan is a comprehensive document that outlines the goals, strategies, and actions of a business. To make your feasibility study and business plan effective and successful, you should follow these tips and best practices :

- conduct a thorough market research . Before you start writing your feasibility study or business plan, you need to understand the market potential, customer needs, competitor strengths, and industry trends of your business idea. You can use various methods such as surveys, interviews, focus groups, online research, and observation to gather relevant data and insights. This will help you validate your assumptions, identify your target market , and assess the demand and profitability of your product or service.

- Define your value proposition and competitive advantage . A value proposition is a clear statement that explains how your product or service solves a customer problem, meets a need, or provides a benefit. A competitive advantage is a unique feature or benefit that sets your business apart from others in the market. You should articulate your value proposition and competitive advantage in your feasibility study and business plan, and demonstrate how they align with your market research and customer feedback . For example, if you are planning to open a vegan bakery, your value proposition could be "We offer delicious and healthy vegan baked goods that cater to the growing demand for plant-based food", and your competitive advantage could be "We use organic and locally sourced ingredients , and we have a loyal customer base from our online presence".

- set realistic and measurable goals and objectives. Your feasibility study and business plan should include specific, attainable, and quantifiable goals and objectives that reflect your vision and mission. goals are the long-term outcomes that you want to achieve, such as increasing sales, expanding market share , or improving customer satisfaction . Objectives are the short-term steps that you need to take to reach your goals, such as launching a new product, hiring more staff, or securing funding. You should also define the key performance indicators (KPIs) that will help you track and measure your progress and success . For example, if your goal is to increase sales, your objective could be "To sell 10,000 units of our new product in the first year", and your KPI could be "The number of units sold per month".

- Develop a realistic and detailed financial plan. A financial plan is a crucial component of your feasibility study and business plan, as it shows the expected costs and revenues of your business , and the projected cash flow and profitability . You should prepare a realistic and detailed financial plan that covers the following aspects: startup costs, operating costs, sales forecast, income statement, balance sheet, and break-even analysis. You should also include a sensitivity analysis that shows how your financial performance would change under different scenarios, such as changes in market conditions, customer demand, or pricing strategy. This will help you assess the financial feasibility and sustainability of your business, and identify the potential risks and opportunities.

- Seek feedback and revise accordingly. Before you finalize your feasibility study and business plan, you should seek feedback from various sources, such as potential customers, partners, investors, mentors, or experts. You should ask for honest and constructive feedback that can help you improve the quality and clarity of your documents, and address any gaps or weaknesses. You should also be open to revise your feasibility study and business plan based on the feedback, and update them regularly as your business evolves and grows. This will help you ensure that your feasibility study and business plan are accurate, relevant, and effective.

After comparing and contrasting the feasibility study and the business plan, we can draw some important conclusions and recommendations for entrepreneurs and investors. These are:

- A feasibility study is a preliminary analysis that evaluates the viability of a business idea or project before committing to a full-scale plan. It helps to identify the strengths, weaknesses, opportunities, and threats (SWOT) of the proposed venture, as well as the market demand, competition, costs, risks, and potential returns.

- A business plan is a comprehensive document that outlines the goals, strategies, and actions of a business, as well as the financial projections, marketing plan, and operational plan. It serves as a roadmap for the execution and management of the business, as well as a communication tool for attracting funding, partners, and customers.

- Both the feasibility study and the business plan are essential for the success of a business, but they serve different purposes and audiences. A feasibility study is more exploratory and tentative, while a business plan is more definitive and persuasive. A feasibility study is mainly for the benefit of the entrepreneur, while a business plan is mainly for the benefit of the investors and other stakeholders.

- Therefore, our recommendations are:

1. Conduct a feasibility study before writing a business plan, to ensure that your business idea or project is worth pursuing and has a reasonable chance of success.

2. Use the findings and recommendations of the feasibility study as the basis for developing your business plan , to ensure that your business plan is realistic, consistent, and aligned with your goals and vision.

3. Tailor your business plan to the specific needs and expectations of your target audience, to ensure that your business plan is clear, concise, and convincing.

For example, if you are planning to start a coffee shop, you should first conduct a feasibility study to assess the demand, competition, location, costs, and risks of your business idea. Based on the results, you can decide whether to proceed with the business plan or not. If you decide to proceed, you should use the feasibility study as a guide to develop your business plan , which should include your mission, vision, objectives, value proposition, market analysis, marketing strategy, operational plan, financial plan, and risk management plan . Depending on who you are presenting your business plan to, you should emphasize different aspects of your business, such as the market opportunity, the competitive advantage, the financial projections, or the social impact.

By following these steps, you can increase the chances of launching and running a successful business. We hope that this blog has helped you understand the difference between a feasibility study and a business plan, and how to use them effectively for your business venture. Thank you for reading and stay tuned for more insights and tips on entrepreneurship and business development .

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What Are Business Feasibility Studies and Why Are They Important?

why entrepreneurs need a feasibility study before a business plan

August 22, 2022
Business Strategy , Growth , Innovation

When your business is in the process of a transition, such as a leadership or ownership transition, you’ll likely be taking on risk. One of the best ways you can evaluate whether the potential benefits of a transition outweigh the risks is with a feasibility study. Before you begin a transition, make sure you know what a feasibility study is, why these studies are so important, and how you can perform one.

What Is a Feasibility Study?

A feasibility study is a detailed analysis that outlines the risk and return of pursuing a plan of action. In a transition, a feasibility study can allow you to determine how much risk a potential transition would entail. A transition feasibility study can also give you the information you need to better predict the likely success of a transition and the potential return on investment.

Why Do a Feasibility Study?

A business feasibility study is essential in evaluating whether or not a transition is likely to succeed. When you conduct a feasibility study for an ownership transition, leadership transition, generational transition, or any other business transition, you’ll need to ask yourself five main feasibility study questions. These questions include:

What are the viable options? Each plan has multiple courses of action. What is the best option for the company and its key stakeholders? The study will sort through all the options and may even help you identify a hybrid approach.
Intellectual Property
Responsible stakeholders – Identify who has accountability and for what part of the plan
Special considerations
What is the expected shareholder return for each viable option?
What is the viability of success?
What are the risks?

Once you’ve asked yourself the above feasibility study questions and completed the study, you’ll be prepared to decide on the path forward. The decisions will be aligned because the study will give your entire team the data, analysis, and forecasts to help see all your options clearly. The study also allows you to plan for alternatives.

How to Conduct a Feasibility Study

Conducting a feasibility study involves rigor and brutal honesty about where your business is today. To conduct a comprehensive study:

Gather information: Various types of information should be gathered based on the purpose of the planned transition. This information gathering should include the collection of financial, operational, and market data.
Stock value
Weaknesses – define and then develop a plan to overcome
Opportunities – define and develop a plan of action to take advantage of opportunities
Threats – define who, what, why, and when. Define how to turn threats into opportunities.
Are we (am I) willing to do what it takes to achieve the end goal?
Align with key stakeholders: Once you’ve gathered and analyzed the information, the key stakeholders should meet to align on the next steps and final decisions. In this meeting, make sure everyone understands expectations and the role they play. A team that is aligned will eliminate unwanted surprises down the road and experience a smoother ownership transition process.

Choose Thinc Strategy for Advisory Services

If you’re looking for help conducting a feasibility study, Thinc Strategy’s certified advisors can help. Our team will work with you to create, implement and evaluate a feasibility study that helps you determine whether a transition meets your company’s overall goals and capabilities. Alongside assisting with feasibility studies, our transitional services include external transitions, internal transitions, employee stock ownership plans, and valuations.

Find out more about our feasibility studies and ownership transition planning services today. If you have any questions or want to schedule a free consultation, please contact us .

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Our clearly defined process includes expertise in the areas of management, research, market search, analytics, and reporting

Evaluate the merits of any business idea

Thinc will review a variety of materials from the firm including, but not limited to, the past 3-5 years of financial statements, organization chart, key roles, and other relevant materials.

Thinc will meet with the owners to confirm the direction gleaned from our initial interviews and information analysis. We will use this meeting to refine the direction and inputs for the different models.

Thinc will build out the different options using the provided inputs showing the potential outcomes and implications for each model.

Thinc will present the feasibility study, documenting the various options and models. We will also schedule a follow-up conversation, allowing the owners time for reflection on the study, to answer questions and discuss next steps.

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The Importance of a Feasibility Study

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How to Develop & Implement an Entrepreneurial Vision

Uncertainty is a constant that businesses of every size face daily. Getting customers in the door, encouraging them to spend, and ultimately generating a profit are basic objectives that can at times seem difficult to achieve. Changing, adapting and incorporating new products and ideas into your business mix are ways to remove some of the uncertainties you face, but without proper forethought and planning, those steps themselves can be highly uncertain. Enter the feasibility study: a chance to ask and get answers to questions that help you to assess potential, and to predict the likelihood of success or failure.

Likely to Succeed

The term “feasible” describes an action or event that is likely, probably or possible to happen or achieve. A feasibility study is the total of the actions you take and the questions you ask to determine whether an idea, thought or plan is likely to succeed. An effective study can guide you on whether you should move forward with your idea, refine it, or scrap it altogether and go back to the drawing board.

Focused and Specific

Feasibility studies are focused and specific. They start with a single question – asking whether the idea, event or action is a viable solution – and force you to focus solely on that question to the exclusion of everything else, drilling down to explore possible outcomes. A feasibility study is not the same as a business plan. A feasibility study is an investigative tool that might cause you to discount an idea, whereas a business plan is call to action. You can, in fact, use a feasibility study as a predecessor to creating a business plan.

The Big Picture

Feasibility studies are important because they force you consider the big picture first and then think in a top-down fashion. In this way, one or two general starter questions lead to a host of additional, more detailed questions that become increasingly narrower in focus as you get closer to reaching an ultimate answer.

For example, asking whether anyone will buy your new-and-improved product and whether it will generate a profit creates additional questions that force you to consider customer need and possible competition, and to identify risks that you may face. You must also describe your product and its benefits, define your target market, and calculate cost along with break-even and profit points.

Alternative Opportunities and Solutions

Feasibility studies offer you the chance to “get it right” before committing time, money and business resources to an idea that may not work in the way you originally planned, causing you to invest even more to correct flaws, remove limitations, and then simply try again. Feasibility studies may also open your eyes to new possibilities, opportunities and solutions you might never have otherwise considered. There are no right or wrong answers to the questions you ask, but an answer you don’t necessarily want or expect can create new profit potential.

SurveyGizmo: What Is a Feasibility Study, and How Can Surveys Help?
Investing News: What are Prefeasibility and Feasibility Studies?

Based in Green Bay, Wisc., Jackie Lohrey has been writing professionally since 2009. In addition to writing web content and training manuals for small business clients and nonprofit organizations, including ERA Realtors and the Bay Area Humane Society, Lohrey also works as a finance data analyst for a global business outsourcing company.

Key factors that shape effective goal setting, continuous improvement process definition, how to write an organizational development intervention proposal, guide objectives for a focus group discussion, recruitment & selection questions, the two most important parts of swot analysis, examples of a risk management plan for outdoor events, how to find dispersion on excel, what is the key response action from a target market, most popular.

1 Key Factors That Shape Effective Goal Setting
2 Continuous Improvement Process Definition
3 How to Write an Organizational Development Intervention Proposal
4 Guide Objectives for a Focus Group Discussion

11.3 Conducting a Feasibility Analysis

Learning objectives.

By the end of this section, you will be able to:

Describe the purpose of a feasibility analysis
Describe and develop the parts of a feasibility analysis
Understand how to apply feasibility outcomes to a new venture

As the name suggests, a feasibility analysis is designed to assess whether your entrepreneurial endeavor is, in fact, feasible or possible. By evaluating your management team, assessing the market for your concept, estimating financial viability, and identifying potential pitfalls, you can make an informed choice about the achievability of your entrepreneurial endeavor. A feasibility analysis is largely numbers driven and can be far more in depth than a business plan (discussed in The Business Plan ). It ultimately tests the viability of an idea, a project, or a new business. A feasibility study may become the basis for the business plan, which outlines the action steps necessary to take a proposal from ideation to realization. A feasibility study allows a business to address where and how it will operate, its competition, possible hurdles, and the funding needed to begin. The business plan then provides a framework that sets out a map for following through and executing on the entrepreneurial vision.

Organizational Feasibility Analysis

Organizational feasibility aims to assess the prowess of management and sufficiency of resources to bring a product or idea to market Figure 11.12 . The company should evaluate the ability of its management team on areas of interest and execution. Typical measures of management prowess include assessing the founders’ passion for the business idea along with industry expertise, educational background, and professional experience. Founders should be honest in their self-assessment of ranking these areas.

Resource sufficiency pertains to nonfinancial resources that the venture will need to move forward successfully and aims to assess whether an entrepreneur has a sufficient amount of such resources. The organization should critically rank its abilities in six to twelve types of such critical nonfinancial resources, such as availability of office space, quality of the labor pool, possibility of obtaining intellectual property protections (if applicable), willingness of high-quality employees to join the company, and likelihood of forming favorable strategic partnerships. If the analysis reveals that critical resources are lacking, the venture may not be possible as currently planned. 46

Financial Feasibility Analysis

A financial analysis seeks to project revenue and expenses (forecasts come later in the full business plan); project a financial narrative; and estimate project costs, valuations, and cash flow projections Figure 11.13 .

The financial analysis may typically include these items:

A twelve-month profit and loss projection
A three- or four-year profit-and-loss projection
A cash-flow projection
A projected balance sheet
A breakeven calculation

The financial analysis should estimate the sales or revenue that you expect the business to generate. A number of different formulas and methods are available for calculating sales estimates. You can use industry or association data to estimate the sales of your potential new business. You can search for similar businesses in similar locations to gauge how your business might perform compared with similar performances by competitors. One commonly used equation for a sales model multiplies the number of target customers by the average revenue per customer to establish a sales projection:

Another critical part of planning for new business owners is to understand the breakeven point , which is the level of operations that results in exactly enough revenue to cover costs (see Entrepreneurial Finance and Accounting for an in-depth discussion on calculating breakeven points and the breakdown of cost types). It yields neither a profit nor a loss. To calculate the breakeven point, you must first understand the two types of costs: fixed and variable. Fixed costs are expenses that do not vary based on the amount of sales. Rent is one example, but most of a business’s other costs operate in this manner as well. While some costs vary from month to month, costs are described as variable only if they will increase if the company sells even one more item. Costs such as insurance, wages, and office supplies are typically considered fixed costs. Variable costs fluctuate with the level of sales revenue and include items such as raw materials, purchases to be sold, and direct labor. With this information, you can calculate your breakeven point—the sales level at which your business has neither a profit nor a loss. 47 Projections should be more than just numbers: include an explanation of the underlying assumptions used to estimate the venture’s income and expenses.

Projected cash flow outlines preliminary expenses, operating expenses, and reserves—in essence, how much you need before starting your company. You want to determine when you expect to receive cash and when you have to write a check for expenses. Your cash flow is designed to show if your working capital is adequate. A balance sheet shows assets and liabilities, necessary for reporting and financial management. When liabilities are subtracted from assets, the remainder is owners’ equity. The financial concepts and statements introduced here are discussed fully in Entrepreneurial Finance and Accounting .

Market Feasibility Analysis

A market analysis enables you to define competitors and quantify target customers and/or users in the market within your chosen industry by analyzing the overall interest in the product or service within the industry by its target market Figure 11.14 . You can define a market in terms of size, structure, growth prospects, trends, and sales potential. This information allows you to better position your company in competing for market share. After you’ve determined the overall size of the market, you can define your target market, which leads to a total available market (TAM) , that is, the number of potential users within your business’s sphere of influence. This market can be segmented by geography, customer attributes, or product-oriented segments. From the TAM, you can further distill the portion of that target market that will be attracted to your business. This market segment is known as a serviceable available market (SAM) .

Projecting market share can be a subjective estimate, based not only on an analysis of the market but also on pricing, promotional, and distribution strategies. As is the case for revenue, you will have a number of different forecasts and tools available at your disposal. Other items you may include in a market analysis are a complete competitive review, historical market performance, changes to supply and demand, and projected growth in demand over time.

Are You Ready?

You’ve been hired by a leading hotel chain to determine the market and financial potential for the development of a mixed-use property that will include a full-service hotel in downtown Orlando, located at 425 East Central Boulevard, in Orlando, Florida. The specific address is important so you can pinpoint existing competitors and overall suitability of the site. Using the information given, conduct a market analysis that can be part of a larger feasibility study.

Work It Out

Location feasibility.

You’re considering opening a boutique clothing store in downtown Atlanta. You’ve read news reports about how downtown Atlanta and the city itself are growing and undergoing changes from previous decades. With new development taking place there, you’re not sure whether such a venture is viable. Outline what steps you would need to take to conduct a feasibility study to determine whether downtown Atlanta is the right location for your planned clothing store.

Applying Feasibility Outcomes

After conducting a feasibility analysis, you must determine whether to proceed with the venture. One technique that is commonly used in project management is known as a go-or-no-go decision . This tool allows a team to decide if criteria have been met to move forward on a project. Criteria on which to base a decision are established and tracked over time. You can develop criteria for each section of the feasibility analysis to determine whether to proceed and evaluate those criteria as either “go” or “no go,” using that assessment to make a final determination of the overall concept feasibility. Determine whether you are comfortable proceeding with the present management team, whether you can “go” forward with existing nonfinancial resources, whether the projected financial outlook is worth proceeding, and make a determination on the market and industry. If satisfied that enough “go” criteria are met, you would likely then proceed to developing your strategy in the form of a business plan.

What Can You Do?

Love beyond walls.

When Terence Lester saw a homeless man living behind an abandoned, dilapidated building, he asked the man if he could take him to a shelter. The man scoffed, replying that Lester should sleep in a shelter. So he did—and he saw the problem through the homeless man’s perspective. The shelter was crowded and smelly. You couldn’t get much sleep, because others would try to steal your meager belongings. The dilapidated building provided isolation away from others, but quiet and security in its own way that the shelter could not. This experience led Lester to voluntarily live as a homeless person for a few weeks. His journey led him to create Love Beyond Walls (www.lovebeyondwalls.org), an organization that aids the homeless, among other causes. Lester didn’t conduct a formal feasibility study, but he did so informally by walking in his intended customers’ shoes—literally. A feasibility study of homelessness in a particular area could yield surprising findings that might lead to social entrepreneurial pursuits.

What is a social cause you think could benefit from a formal feasibility study around a potential entrepreneurial solution?
46 Ulrich Kaiser. “A primer in Entrepreneurship – Chapter 3 Feasibility analysis” University of Zurich Institute for Strategy and Business Economics . n.d. https://docplayer.net/7775267-A-primer-in-entrepreneurship-chapter-3-feasibility-analysis.html
47 In a preliminary financial model and business plan, startup costs should be allocated, as they are intended for one-time investments in development; pre-launch costs and other necessary expenses will not carry over once the product/solution has launched.

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Book title: Entrepreneurship
Publication date: Jan 16, 2020
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Section URL: https://openstax.org/books/entrepreneurship/pages/11-3-conducting-a-feasibility-analysis

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Why Feasibility Studies Matter (With Examples)

Published: November 11, 2022

As a business leader, you want your projects to generate a return on investment. So before you begin any new venture, it’s a good idea to complete a feasibility study.

business owner conducting a feasibility study

Feasibility studies help to determine the success (or failure) of your proposed project or plan. These types of studies help you make better, informed business decisions. As a result, you can save time and money by starting a plan or a project that you know has a high ROI.

Here, you’ll learn how to run feasibility studies. This post includes:

What is a feasibility study?

Feasibility study benefits, types of feasibility studies, how to write a feasibility study, feasibility study examples.

A feasibility study analyzes a potential project’s benefits, risks, costs, and potential outcomes. After completing a feasibility study, you and your team will have enough information to determine if the proposed project is a worthy investment.

Two types of sales forecasting data are appropriate for feasibility studies:

Quantitative forecasting uses historical business data to predict trends.
Qualitative sales forecasting data takes customers’ opinions, market research, and survey results into account.

The type of feasibility study you run determines which type of data you will need. Consider using qualitative forecasting data to determine how well your audience might receive your product. Quantitative data can help you predict revenue.

As a team leader, it’s your job to ensure your team hits yearly sales revenue goals. That may include deciding to take on a project based on projected sales forecasting data.

However, you do not want to take on a proposed plan or project without being sure the project will benefit your organization. Companies with accurate forecasts are 10% more likely to increase revenue yearly , according to Intangent.

That’s why feasibility studies matter. Combine sales forecasting data with the insight from a feasibility report, and you’ll be able to gauge the success rate of your proposed plan before you start.

Other feasibility benefits include:

Determining if the project is appropriate for your team.
Making sound decisions for your team.
Avoiding mistakes.
Narrowing the focus of the project.
Determining project and team needs.
Determining which departments need to be involved in the project.
Calculating the amount and source of appropriate funding.
Assessing the success or failure rate of your project.
Estimating ROI.

Not only do feasibility studies help determine if a proposed plan or project is viable, but they also help narrow the focus of the project. Overall, feasibility studies can help keep your project on track from the start.

Now that you understand the benefits of feasibility studies, it’s time to determine which kind of feasibility study is best for your team.

Technical Feasibility Study

A technical feasibility study looks at your project’s technical aspects. This type of study answers the question: do you have the specialized resources and capabilities to carry out this project?

You might have the appropriate funding for a project, but a technical feasibility study will help you determine if you have the right processes, systems, and staffing for the job.

Best for: Software development teams and project development teams

Financial or Economic Feasibility Study

Financial feasibility studies can help you determine if you have the funding for your project. Plus, you’ll learn the venture is an overall good investment for your team and your company. These kinds of feasibility studies ask: is the allotted funding amount appropriate for this project?

By completing a financial feasibility study, you’ll have already identified funding sources, expenses, your budget, any potential risks, and expected revenue.

Best for: Financial managers and project managers

Operational Feasibility Study

As the name suggests, an operational feasibility study analyzes whether or not your team is equipped to carry out the proposed plan or project. This feasibility study answers the questions:

Does your team have the means to complete the project?
Will the project add value for your team or your customers?

Consider conducting an operational feasibility study if you have developed a solution for a potential problem. This kind of study will help you determine if the solution solves the problem or creates more issues.

Best for: Project managers and stakeholders

Legal Feasibility Study

This feasibility study should be performed to determine if your proposed project is legal and ethical. Legal feasibility studies are designed to keep you and your team aligned with local, state, and federal laws.

If you are unsure if your project is unethical or unlawful, a legal feasibility study will help you make the appropriate decision before you begin.

Best for: Legal departments and project managers

Scheduling Feasibility Study

When starting a new project, you’ll often be asked, “When can we reasonably expect this project to be completed?”

If you and your team are working for clients and are on a deadline, a scheduling feasibility study looks at the project’s timeline. That can help your team determine a reasonable completion date.

After completing a scheduling feasibility study, you might find the plan requires more time than you thought. This is helpful to know before you begin a project.

Best for: Stakeholders, project managers, and their teams

If you are wondering how to write a feasibility study, look no further than our feasibility study template .

Before you jump into writing your own study with our feasibility study template, take a minute to familiarize yourself with each section of the template. Keep in mind, the feasibility study temple can be customized to fit the needs of you and your team.

1. Executive Summary

Your executive summary should be a one-page summary of the entire study. Make sure to include the following:

The project name.
A description of the project.
The goals of the project or plan.
The target market.

feasibility study template, executive summary section

Image Source

2. Business Explanation

This section of the feasibility study is your space to introduce the business concept of your project or plan. Consider discussing:

The purpose of the project or plan.
Products or services.
Competitive advantages.
Experience of its founders.

If your project is feasible, you’ll want to be as specific as possible in this section and discuss the project’s projected success.

feasibility study template: business explanation

3. Market Overview

This section of your feasibility study should discuss your target market and why your project or plan will (or will not) succeed. You’ll want to discuss your target market in-depth, its pain points, and how your proposed product or service will solve the problems.

You’ll want to include valid data in this section. Consider featuring:

The market size and demographics.
The market psychographics.
Competitors and substitutes.

feasibility study template, how to create a market overview for a feasibility study

4. Financial Projections

Every good business endeavor is meant to make a profit. Your feasibility study should determine if the project or plan is a financially wise investment. The financial projections section of the feasibility template outlines and discusses critical financial metrics.

Considering including and discussing:

Capital needs.
Projected revenue and expenses.
Projected revenue needed to break even.

What is a feasibility study? How to break down financial projections

5. Feasibility Assessment and Conclusion

In your conclusion, be as clear and specific about your proposed project or plan as possible. Use statements like, “Based on our assessment of (X), we have deemed this business project feasible.”

Feasibility studies can be helpful across your entire organization — from the sales team to the product development team. Here are a few examples of feasibility studies conducted in various industries.

Howard County Public School System

The Howard County Public School System’s feasibility study dives into projected student enrollment over a 10-year period.

What we love: The school system offers an excellent example of a brief, but thorough, executive summary. In this section, Howard County Public Schools also includes specific historical data used throughout the study.

Town of Walpole, Massachusetts

This feasibility study from the Walpole, Massachusetts’ explores the town’s recreation programming and facilities. Throughout, the document includes program recommendations with data that explains how the researchers came to this conclusion.

What we love: This document combines several different types of feasibility studies (financial, technical, and operational) into one comprehensive study. Remember, you can mold your feasibility study to fit your organization’s needs best.

U.S. Fish and Wildlife Service

feasibility study examples, U.S. Fish and Wildlife

In this example, the U.S. Fish and Wildlife Service explores the feasibility of reintroducing sea otters to areas of the Pacific coast. This study also provides a model for structuring the objectives section of this document. A good feasibility study is clear and to the point in each section.

What we love: Here, the U.S. Fish and Wildlife Service distinguishes what the study covers (potential options for reintroduction), and what it cannot accomplish (projected population growth from reintroduction).

While your feasibility study seeks to assess a project’s viability, your document will have a limited scope. If you’ll need to gather additional information moving forward, mention that in your feasibility study.

Holdrege Area Public Library

Your feasibility study doesn’t need to be all text. The Holdrege Area Public Library makes use of graphics and charts to convey information in its feasibility study.

What we love: Infographics are easy to read. You can absorb important information with a quick skim.

Running Your Feasibility Study

Accurately predicting the success of a project might seem like a daunting task. But it doesn’t have to be. There are many ways to conduct a feasibility study. Stary by leveraging the tools you already have, like HubSpot’s Forecasting Software and our feasibility study template.

Your job as a sales leader is to help your team increase your organization’s bottom line. With the use of sales forecasting data and feasibility studies, you’ll be able to pursue the projects that will yield the highest ROI.

Apply for a job, keep track of important information, and prepare for an interview with the help of this free job seekers kit.

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Dec 26, 2023

The Importance of a Feasibility Study in Business Planning

Updated: Dec 27, 2023

When starting a new business or embarking on a new project, it is crucial to conduct a feasibility study. A feasibility study is an evaluation of the viability of an idea, project, or business. It involves assessing various factors such as market demand, competition, financial resources, and technical feasibility. A well-executed feasibility study provides essential insights that help in making informed decisions and ensuring the success of the business plan.

One of the main reasons why a feasibility study is important in business planning is its ability to identify potential risks and challenges. By evaluating various factors, such as market trends, customer preferences, and competition, a feasibility study enables business owners to foresee potential hurdles they might face in the future and develop strategies to overcome them. This helps to minimize financial losses and maximize the returns on investment.

Furthermore, conducting a feasibility study helps in determining the financial viability of the business plan. It involves assessing the financial requirements of the project, estimating the potential revenue and expenses, and calculating the return on investment. This analysis provides valuable insights into whether the business idea or project is financially feasible. It helps entrepreneurs assess the profitability and sustainability of their venture, enabling them to make necessary adjustments to their business plan.

In addition to financial feasibility, a feasibility study also helps in assessing the technical and operational aspects of the proposed business. It helps to evaluate the availability of resources, such as raw materials, equipment, and skilled labor, necessary for the successful implementation of the business plan. By identifying any potential technical or operational limitations, entrepreneurs can plan and allocate resources more effectively, ensuring smooth business operations.

Moreover, conducting a feasibility study helps in understanding the target market and identifying potential customers. By analyzing market trends, consumer behavior, and preferences, business owners can identify their target audience and develop effective marketing and sales strategies. This allows them to tailor their products or services to better meet the needs and demands of their customers, increasing the chances of success.

Lastly, a feasibility study plays a crucial role in attracting potential investors or securing financial support from banks and financial institutions. Investors and financial institutions often require a thorough feasibility study before providing funding. A well-prepared study with a comprehensive business plan demonstrates the seriousness and viability of the project, instilling confidence in potential stakeholders.

In conclusion, a feasibility study is an indispensable tool in business planning. It provides valuable insights into the potential risks, financial viability, technical requirements, and market conditions of a proposed business or project. By conducting a feasibility study, entrepreneurs can minimize risks, maximize profits, and ensure smooth business operations. Therefore, it is essential to invest time and effort in conducting a thorough feasibility study before embarking on any business venture.

Publisher Details: SBA Feasibility Study Consultants – USDA Feasibility Study Consultants- Feasibility-Study.com https:// www.feasibility-study.com/

Unlock the potential of your business with Feasibility-Study.com – The ultimate destination for comprehensive feasibility studies, empowering you to make informed decisions, maximize profitability, and shape a prosperous future. Join us in revolutionizing your business strategy today!

For more information on feasibility study and business plan contact us anytime.

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11.3: Conducting a Feasibility Analysis

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Learning Objectives

By the end of this section, you will be able to:

Describe the purpose of a feasibility analysis
Describe and develop the parts of a feasibility analysis
Understand how to apply feasibility outcomes to a new venture

Organizational Feasibility Analysis

Financial Feasibility Analysis

The financial analysis may typically include these items:

A twelve-month profit and loss projection
A three- or four-year profit-and-loss projection
A cash-flow projection
A projected balance sheet
A breakeven calculation

T×A=ST×A=S

Target(ed) Customers/Users×Average Revenue per Customer=Sales ProjectionTarget(ed) Customers/Users×Average Revenue per Customer=Sales Projection

Another critical part of planning for new business owners is to understand the breakeven point , which is the level of operations that results in exactly enough revenue to cover costs (see Entrepreneurial Finance and Accounting for an in-depth discussion on calculating breakeven points and the breakdown of cost types). It yields neither a profit nor a loss. To calculate the breakeven point, you must first understand the two types of costs: fixed and variable. Fixed costs are expenses that do not vary based on the amount of sales. Rent is one example, but most of a business’s other costs operate in this manner as well. While some costs vary from month to month, costs are described as variable only if they will increase if the company sells even one more item. Costs such as insurance, wages, and office supplies are typically considered fixed costs. Variable costs fluctuate with the level of sales revenue and include items such as raw materials, purchases to be sold, and direct labor. With this information, you can calculate your breakeven point—the sales level at which your business has neither a profit nor a loss. 48 Projections should be more than just numbers: include an explanation of the underlying assumptions used to estimate the venture’s income and expenses.

Market Feasibility Analysis

Figure 11.14

ARE YOU READY?

WORK IT OUT

Location feasibility.

Applying Feasibility Outcomes

WHAT CAN YOU DO?

Love beyond walls.

What is a social cause you think could benefit from a formal feasibility study around a potential entrepreneurial solution?

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How to conduct a feasibility study: Templates and examples

Conducting a feasibility study is an important step in successful project management. By evaluating the viability of a proposed project, a feasibility study helps you identify potential challenges and opportunities, ensuring you make informed decisions. In this guide, we’ll walk you through how to conduct a feasibility study with practical templates and real-world examples, designed for project managers seeking to optimize their project planning process.

It can be exciting to run a large, complex project that has a huge potential impact on your organization. On the one hand, you’re driving real change. On the other hand, failure is intimidating.

What is a feasibility study?

A feasibility study—sometimes called a feasibility analysis or feasibility report—is a way to evaluate whether or not a project plan could be successful. A feasibility study evaluates the practicality of your project plan in order to judge whether or not you’re able to move forward with the project.

It does so by answering two questions:

Does our team have the required tools or resources to complete this project?

Will there be a high enough return on investment to make the project worth pursuing?

Benefits of conducting a feasibility study

There are several key benefits to conducting a feasibility study before launching a new project:

Confirms market opportunities and the target market before investing significant resources

Identifies potential issues and risks early on

Provides in-depth data for better decision making on the proposed project's viability

Creates documentation on expected costs and benefits, including financial analysis

Obtains stakeholder buy-in by demonstrating due diligence

Feasibility studies are important for projects that represent significant investments for your business. Projects that also have a large potential impact on your presence in the market may also require a feasibility assessment.

As the project manager , you may not be directly responsible for driving the feasibility study, but it’s important to know what these studies are. By understanding the different elements that go into a feasibility study, you can better support the team driving the feasibility study and ensure the best outcome for your project.

When should you conduct a feasibility analysis?

A feasibility study should be conducted after the project has been pitched but before any work has actually started. The study is part of the project planning process. In fact, it’s often done in conjunction with a SWOT analysis or project risk assessment , depending on the specific project.

Feasibility studies help:

Confirm market opportunities before committing to a project

Narrow your business alternatives

Create documentation about the benefits and disadvantages of your proposed initiative

Provide more information before making a go-or-no-go decision

You likely don’t need a feasibility study if:

You already know the project is feasible

You’ve run a similar project in the past

Your competitors are succeeding with a similar initiative in market

The project is small, straightforward, and has minimal long-term business impact

Your team ran a similar feasibility analysis within the past three years

One thing to keep in mind is that a feasibility study is not a project pitch. During a project pitch, you’re evaluating whether or not the project is a good idea for your company and whether the goals of the project are in line with your overall strategic plan. Typically, once you’ve established that the project is a good idea, you'll run a feasibility study to confirm that the project is possible with the tools and resources you have at your disposal.

Types of feasibility studies

There are five main types of feasibility studies: technical feasibility, financial feasibility, market feasibility (or market fit), operational feasibility, and legal feasibility. Most comprehensive feasibility studies will include an assessment of all five of these areas.

Technical feasibility

A technical feasibility study reviews the technical resources available for your project. This study determines if you have the right equipment, enough equipment, and the right technical knowledge to complete your project objectives . For example, if your project plan proposes creating 50,000 products per month, but you can only produce 30,000 products per month in your factories, this project isn’t technically feasible.

Financial feasibility

Financial feasibility describes whether or not your project is fiscally viable. A financial feasibility report includes a cost-benefit analysis of the project. It also forecasts an expected return on investment (ROI) and outlines any financial risks. The goal at the end of the financial feasibility study is to understand the economic benefits the project will drive.

Market feasibility

The market feasibility study is an evaluation of how your team expects the project’s deliverables to perform in the market. This part of the report includes a market analysis, a market competition breakdown, and sales projections.

Operational feasibility

An operational feasibility study evaluates whether or not your organization is able to complete this project. This includes staffing requirements, organizational structure, and any applicable legal requirements. At the end of the operational feasibility study, your team will have a sense of whether or not you have the resources, skills, and competencies to complete this work.

Legal feasibility

A legal feasibility analysis assesses whether the proposed project complies with all relevant legal requirements and regulations. This includes examining legal and regulatory barriers, necessary permits, licenses, or certifications, potential legal liabilities or risks, and intellectual property considerations. The legal feasibility study ensures that the project can be completed without running afoul of any laws or incurring undue legal exposure for the organization.

Feasibility assessment checklist

Most feasibility studies are structured in a similar way. These documents serve as an assessment of the practicality of a proposed business idea. Creating a clear feasibility study helps project stakeholders during the decision making process.

The essential elements of a feasibility study are:

An executive summary describing the project’s overall viability

A description of the product or service being developed during this project

Any technical considerations , including technology, equipment, or staffing

The market survey , including a study of the current market and the marketing strategy

The operational feasibility study evaluates whether or not your team’s current organizational structure can support this initiative

The project timeline

Financial projections based on your financial feasibility report

6 steps to conduct a feasibility study

You likely won’t be conducting the feasibility study yourself, but you will probably be called on to provide insight and information. To conduct a feasibility study, hire a trained consultant or, if you have an in-house project management office (PMO) , ask if they take on this type of work. In general, here are the steps they’ll take to complete this work:

1. Run a preliminary analysis

Creating a feasibility study is a time-intensive process. Before diving into the feasibility study, it’s important to evaluate the project for any obvious and insurmountable roadblocks. For example, if the project requires significantly more budget than your organization has available, you likely won’t be able to complete it. Similarly, if the project deliverables need to be live and in the market by a certain date but won’t be available for several months after that, the project likely isn’t feasible either. These types of large-scale obstacles make a feasibility study unnecessary because it’s clear the project is not viable.

2. Evaluate financial feasibility

Think of the financial feasibility study as the projected income statement for the project. This part of the feasibility study clarifies the expected project income and outlines what your organization needs to invest—in terms of time and money—in order to hit the project objectives.

During the financial feasibility study, take into account whether or not the project will impact your business's cash flow. Depending on the complexity of the initiative, your internal PMO or external consultant may want to work with your financial team to run a cost-benefit analysis of the project.

3. Run a market assessment

The market assessment, or market feasibility study, is a chance to identify the demand in the market. This study offers a sense of expected revenue for the project and any potential market risks you could run into.

The market assessment, more than any other part of the feasibility study, is a chance to evaluate whether or not there’s an opportunity in the market. During this study, it’s critical to evaluate your competitor’s positions and analyze demographics to get a sense of how the project will go.

4. Consider technical and operational feasibility

Even if the financials are looking good and the market is ready, this initiative may not be something your organization can support. To evaluate operational feasibility, consider any staffing or equipment requirements this project needs. What organizational resources—including time, money, and skills—are necessary in order for this project to succeed?

Depending on the project, it may also be necessary to consider the legal impact of the initiative. For example, if the project involves developing a new patent for your product, you will need to involve your legal team and incorporate that requirement into the project plan.

5. Review project points of vulnerability

At this stage, your internal PMO team or external consultant have looked at all four elements of your feasibility study—financials, market analysis, technical feasibility, and operational feasibility. Before running their recommendations by you and your stakeholders, they will review and analyze the data for any inconsistencies. This includes ensuring the income statement is in line with your market analysis. Similarly, now that they’ve run a technical feasibility study, are any liabilities too big of a red flag? (If so, create a contingency plan !)

Depending on the complexity of your project, there won’t always be a clear answer. A feasibility analysis doesn’t provide a black-and-white decision for a complex problem. Rather, it helps you come to the table with the right questions—and answers—so you can make the best decision for your project and for your team.

6. Propose a decision

The final step of the feasibility study is an executive summary touching on the main points and proposing a solution.

Depending on the complexity and scope of the project, your internal PMO or external consultant may share the feasibility study with stakeholders or present it to the group in order to field any questions live. Either way, with the study in hand, your team now has the information you need to make an informed decision.

Feasibility study examples

To better understand the concepts behind feasibility assessments, here are two hypothetical examples demonstrating how these studies can be applied in real-world scenarios.

Example 1: New product development

A consumer goods company is considering launching a new product line. Before investing in new product development, they conduct a feasibility study to assess the proposed project.

The feasibility study includes:

Market research to gauge consumer interest, assess competitor offerings, and estimate potential market share for the target market.

Technological considerations, including R&D requirements, production processes, and any necessary patents or certifications.

In-depth financial analysis projects sales volumes, revenue, costs, and profitability over a multi-year period.

Evaluation of organizational readiness, including the skills of the current management team and staff to bring the new product to market.

Assessment of legal feasibility to ensure compliance with regulations and identify any potential liability issues.

The comprehensive feasibility study identifies a promising market opportunity for the new business venture. The company decides to proceed with the new project, using the feasibility report as a template for their business development process. The study helps secure funding from key decision-makers, setting this start-up product initiative up for success.

Example 2: Real estate development deal

A property developer is evaluating the feasibility of purchasing land for a new residential community. They commission a feasibility study to determine the viability of this real estate development project.

The feasibility assessment covers:

Detailed analysis of the local housing market, including demand drivers, comparable properties, pricing, and absorption rates.

Site planning to assess the property's capacity, constraints, and technological considerations.

In-depth review of legal feasibility, including zoning, permitting, environmental regulations, and other potential legal hurdles.

Financial analysis modeling various development scenarios and estimating returns on investment.

Creation of an opening day balance sheet projecting the assets, liabilities, and equity for the proposed project.

Sensitivity analysis to evaluate the impact of changes in key assumptions on the project's scope and profitability.

The feasibility study concludes that while the real estate start-up is viable, it carries significant risk. Based on these findings, the developer makes an informed decision to move forward, but with a revised project's scope and a phased approach to mitigate risk. The comprehensive feasibility analysis proves critical in guiding this major investment decision.

Which phase of the project management process involves feasibility studies?

Feasibility studies are a key part of the project initiation and planning phases. They are typically conducted after a project has been conceptualized but before significant resources are invested in detailed planning and execution.

The purpose of a feasibility assessment is to objectively evaluate the viability of a proposed project, considering factors such as technical feasibility, market demand, financial costs and benefits, legal requirements, and organizational readiness. By thoroughly assessing these aspects, a feasibility study helps project stakeholders make an informed go-or-no-go decision.

While feasibility studies are a critical tool in the early stages of project management, they differ from other planning documents like project charters, business cases, and business plans. Here's a closer look at these key differences:

Feasibility study vs. project charter

A project charter is a relatively informal document to pitch your project to stakeholders. Think of the charter as an elevator pitch for your project objectives, scope, and responsibilities. Typically, your project sponsor or executive stakeholders review the charter before ratifying the project.

A feasibility study should be implemented after the project charter has been ratified. This isn’t a document to pitch whether or not the project is in line with your team’s goals—rather, it’s a way to ensure the project is something you and your team can accomplish.

Feasibility study vs. business case

A business case is a more formalized version of the project charter. While you’d typically create a project charter for small or straightforward initiatives, you should create a business case if you are pitching a large, complex initiative that will make a major impact on the business. This longer, more formal document will also include financial information and typically involve more senior stakeholders.

After your business case is approved by relevant stakeholders, you'll run a feasibility study to make sure the work is doable. If you find it isn’t, you might return to your executive stakeholders and request more resources, tools, or time in order to ensure your business case is feasible.

Feasibility study vs. business plan

A business plan is a formal document outlining your organization’s goals. You typically write a business plan when founding your company or when your business is going through a significant shift. Your business plan informs a lot of other business decisions, including your three- to five-year strategic plan .

As you implement your business and strategic plan, you’ll invest in individual projects. A feasibility study is a way to evaluate the practicality of any given individual project or initiative.

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Related resources

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Feasibility study: definition, benefits and differences with a Business Plan

Last updated on 09 January, 2024

Welcome to our series of articles on feasibility studies.

What is a Feasibility study?
What is a bankable feasibility study?
How to do a feasibility study?
Feasibility study consultants: expertise needed
Cost of a feasibility study
Car Park Feasibility Study: Key considerations
Hotel Feasibility Study: Methodology
Feasibility study of solar PV projects: Key components
Feasibility study of real estate developments
Feasibility study of marina projects

In this post, we will touch on all the basic concepts behind a feasibility study. definition, benefits of doing it, main parts, differences with a business plan, etc. Aninver Development Partners is a consulting firm specializing in Feasibility studies for projects such as hotels, infrastructure, energy, technology, etc. We assist clients globally.

Definition of Feasibility study

A feasibility study is a comprehensive and systematic analysis and evaluation of a proposed project, business venture, or initiative to determine its practicality, viability, and potential for success. It involves a thorough examination of various factors, such as financial, technical, operational, legal, environmental, and market-related aspects, to assess whether the project is feasible and worth pursuing.

The primary goal of a feasibility study is to provide stakeholders with essential information and insights to make informed decisions about whether to proceed with the project, abandon it, or make necessary adjustments to enhance its chances of success.

Differences between a feasibility study and a business plan

Feasibility studies and business plans are both important tools in the development and evaluation of a business or project, but they serve different purposes and are created at different stages of the process. Here are the key differences between a feasibility study and a business plan:

Differences in Purpose

Feasibility Study : Feasibility studies are conducted in the early stages of project development or business planning. Their primary purpose is to determine whether a proposed project or business idea is viable and should be pursued. Feasibility studies focus on assessing the potential risks, challenges, and opportunities associated with the project.
Business Plan : Business plans are created after the feasibility study, once it has been established that the project is viable. The purpose of a business plan is to outline in detail how the business will be structured, operated, and grown. It serves as a roadmap for the future of the business and is often used to secure financing.

Differences in Content

Feasibility Study : A feasibility study includes an analysis of the project's overall concept, market research, technical requirements, financial projections, potential risks, and recommendations. It provides a high-level overview of the project's feasibility.
Business Plan : A business plan is a detailed document that outlines the company's mission, vision, goals, organizational structure, market strategy, marketing and sales plans, financial forecasts, and operational details. It delves into the specifics of how the business will operate.

Differences in Timing

Feasibility Study : Feasibility studies are conducted at the outset of a project or business idea to assess its potential feasibility. They help stakeholders decide whether to move forward with the project.
Business Plan : Business plans are typically created after the feasibility study, once it has been determined that the project is feasible and worth pursuing. They provide a roadmap for the actual operation and growth of the business.

Differences in Audience

Feasibility Study : The primary audience for a feasibility study includes project stakeholders, investors, and decision-makers who need to determine whether the project should proceed.
Business Plan : Business plans are used to communicate the business's vision and strategy to a wider audience, including potential investors, lenders, partners, and employees.

In summary, a feasibility study is a preliminary assessment of the potential success of a project, while a business plan is a detailed document that outlines how a business will be run. The feasibility study helps determine whether a business plan should be developed, while the business plan provides a comprehensive strategy for the ongoing operation and growth of the business.

Feasibility study vs Pre-feasibility study

Let's explore now the key differences between a prefeasibility study and a feasibility study:

Purpose and Scope : A prefeasibility study and a feasibility study both play critical roles in project evaluation, but they serve distinct purposes. A prefeasibility study is typically the initial phase in the assessment process. Its primary purpose is to provide a preliminary evaluation of a project's potential viability. It helps stakeholders decide whether it's worth investing further resources into a detailed feasibility study. In contrast, a feasibility study goes into much greater depth and detail, assessing the project's practicality from technical, financial, operational, and market perspectives. It aims to provide a comprehensive understanding of whether the project is feasible and worth pursuing.

Level of Detail : One of the key distinctions between the two studies is the level of detail they encompass. A prefeasibility study offers a broad overview of the project, examining high-level factors like market demand, technical requirements, and rough cost estimates. It provides enough information to make an initial go/no-go decision. In contrast, a feasibility study drills down into finer details, providing precise financial projections, risk assessments, engineering specifics, and a comprehensive business plan. It seeks to leave no stone unturned in assessing the project's practicality.

Resource and Cost Implications : A prefeasibility study is generally less resource-intensive and cheaper to conduct compared to a full feasibility study. It acts as a cost-effective filter to eliminate unviable projects early in the evaluation process. Once a project passes the prefeasibility stage and proceeds to a feasibility study, it implies a commitment of more resources, time, and finances due to the comprehensive nature of the study. A prefeasibility study helps in efficient resource allocation by focusing only on the most promising projects, while a feasibility study is a more intensive process suitable for projects that have demonstrated a higher likelihood of success during the prefeasibility assessment.

Benefits of doing a Feasibility study

Conducting a feasibility study offers numerous benefits, making it an essential step in the decision-making process for any project, business venture, or initiative. Here are the key advantages of performing a feasibility study:

Risk Assessment : Feasibility studies help identify potential risks and challenges associated with a project. By thoroughly examining technical, financial, operational, and market-related aspects, stakeholders can pinpoint areas of concern and develop strategies to mitigate or manage these risks effectively.
Decision-Making : Feasibility studies provide critical information to decision-makers, helping them make informed choices about whether to proceed with a project. These studies offer a basis for go/no-go decisions, preventing resources from being wasted on unviable endeavors.
Resource Allocation : By assessing the feasibility of a project, stakeholders can allocate resources more efficiently. They can avoid overinvesting in projects with limited potential and allocate resources to those with a higher likelihood of success.
Financial Planning : Feasibility studies include detailed financial projections and cost estimates. This financial information is invaluable for securing funding from investors, lenders, or other sources. It helps in creating a solid business case.
Market Insight : Market feasibility studies provide insights into customer demand, market trends, and competitive dynamics. This information is crucial for designing products or services that meet market needs and for formulating effective marketing strategies.
Optimized Design : Technical feasibility studies ensure that a project's technical requirements and design are viable. They help in avoiding costly design flaws and ensuring that the project can be implemented as planned.
Legal and Regulatory Compliance : Feasibility studies can identify potential legal and regulatory challenges. This allows for the development of strategies to navigate and comply with relevant laws and regulations, reducing the risk of legal complications later on.
Enhanced Project Viability : Feasibility studies may lead to adjustments and improvements in the project plan, making it more viable and likely to succeed. This iterative process ensures that potential issues are addressed proactively.
Investor and Stakeholder Confidence : When potential investors and stakeholders see that a comprehensive feasibility study has been conducted, they are more likely to have confidence in the project. This can make it easier to secure funding and support.
Long-Term Planning : Feasibility studies not only assess the viability of a project in the short term but also help in long-term planning. They provide insights into the sustainability and growth potential of a business or initiative.

In summary, conducting a feasibility study is a valuable step in the project development process. It provides a structured approach to assess the viability of a project, manage risks, make informed decisions, secure financing, and set the stage for a successful venture. The benefits of a feasibility study extend beyond initial decision-making and contribute to the overall success and sustainability of a project or business.

Components of a Feasibility study

A feasibility study typically consists of several key components that provide a comprehensive evaluation of a project, business venture, or initiative. These components help stakeholders make informed decisions about the feasibility and viability of the proposed endeavor. The main components of a feasibility study include:

Executive Summary

The executive summary provides a concise overview of the entire feasibility study. It includes a brief description of the project, its objectives, and the key findings and recommendations. It serves as a quick reference for decision-makers.

Project Description

This section outlines the project's goals, objectives, and scope. It defines the problem the project aims to solve or the opportunity it seeks to capture. It also specifies the project's location and the stakeholders involved.

Market Analysis

Market analysis assesses the demand for the product or service within the target market. It includes information on target customers, market size, growth potential, competition, and market trends. This component helps determine whether there is a viable market for the project.

Technical Feasibility

Technical feasibility examines the project's technical requirements. It assesses whether the necessary technology, equipment, and resources are available or can be developed. It also identifies any technical challenges that may need to be addressed.

Operational Feasibility

Operational feasibility evaluates how the project will be implemented and operated. It includes details about project timelines, workflow, personnel requirements, and operational processes. This section helps in understanding how the project will function on a day-to-day basis.

Financial Feasibility

Financial feasibility is a critical component that includes detailed financial projections and analysis. It covers aspects such as startup costs, revenue forecasts, expense estimates, cash flow analysis, and return on investment calculations. It assesses the project's financial viability and potential profitability.

Legal and Regulatory Analysis

This section examines the legal and regulatory requirements that may impact the project. It identifies permits, licenses, or compliance issues that need to be addressed. Understanding and addressing legal and regulatory aspects are essential to avoid potential obstacles.

Risk Assessment

The risk assessment component identifies potential risks and challenges associated with the project. It evaluates the probability and impact of these risks and suggests risk mitigation strategies. Risks can be financial, technical, operational, market-related, or related to external factors.

Recommendations and Conclusion

In this section, the feasibility study summarizes the findings and presents clear recommendations based on the assessment. It often includes a conclusion that states whether the project is feasible and worth pursuing or whether it should be abandoned or modified.

The appendices contain additional supporting documentation and data, such as detailed financial spreadsheets, market research reports, technical specifications, and any other relevant information. These provide a more in-depth reference for stakeholders.

The main components of a feasibility study collectively provide a thorough assessment of a project's viability from multiple angles, ensuring that decision-makers have a comprehensive understanding of the project's potential, risks, and benefits.

Examples of Feasibility studies

Let's look now into some examples of feasibility studies for different types of projects and initiatives:

Real Estate Development

A real estate developer is considering constructing a residential apartment complex in a growing urban area. A feasibility study would assess factors like market demand, location, zoning regulations, construction costs, potential revenue from rentals, and the financial viability of the project.

Manufacturing Plant Expansion

A manufacturing company is considering expanding its operations by building a new production facility. The feasibility study would evaluate factors such as available land, infrastructure, equipment requirements, workforce, environmental impact, and the financial feasibility of the expansion.

Small Business Startup

An entrepreneur is exploring the feasibility of starting a small restaurant in a specific location. The feasibility study would examine the local market, including competitors, target customer demographics, startup costs, regulatory requirements, and financial projections for the first few years of operation.

Renewable Energy Project

A renewable energy company is considering the construction of a solar power plant. The feasibility study would assess the site's solar exposure, grid connection feasibility, equipment costs, revenue from energy sales, environmental impact, and the return on investment over the project's lifespan.

Healthcare Facility Expansion

A hospital is contemplating an expansion to meet growing patient demands. The feasibility study would include an assessment of the required medical equipment, staffing needs, regulatory compliance, funding sources, and the anticipated patient load.

Tourism Development

A tourist destination is considering the construction of a new hotel and recreational facilities. The feasibility study would evaluate the area's appeal to tourists, competition with existing businesses, construction costs, expected occupancy rates, and potential revenue from tourism.

Nonprofit Program Expansion

A nonprofit organization is looking to expand its community outreach programs. The feasibility study would assess the need for the programs, funding sources, volunteer availability, operational costs, and the impact of the expansion on the organization's mission and goals.

E-commerce Startup

An entrepreneur plans to launch an e-commerce website. The feasibility study would examine market demand, website development costs, marketing strategies, competitive analysis, and projected sales revenue and profitability.

These examples illustrate how feasibility studies are conducted in various fields and industries to evaluate the potential success and viability of a wide range of projects and initiatives. The specific components and focus areas of a feasibility study will vary depending on the nature of the project and the questions it seeks to address.

7 steps to conduct a Feasibility study

Now, let's think we are going to write a feasibility study. Let's check what steps we need to take to develop the final report.

Conduct a Preliminary Analysis

Begin by conducting an initial evaluation of the project's objectives and scope. This step involves defining the problem the project intends to address or the opportunity it aims to seize. Ensure that the project's goals are clear and well-defined.

Analyze Technical Specifications

Examine the technical aspects of the project in detail. Evaluate the availability of required technology, equipment, and resources. Verify that the project's technical requirements can be met effectively.

Conduct a Commercial Analysis

Perform a comprehensive analysis of the project's commercial aspects. This step involves assessing the market's demand for the product or service, analyzing market size, competition, customer needs, and market trends. Determine if there is a feasible market for the project.

Prepare a Projected Income Statement

Create a detailed projected income statement for the project. This includes estimating startup costs, revenue forecasts, expense projections, and cash flow analysis. Calculate the return on investment (ROI) to determine the project's financial viability, the Internal Rate of Return (IRR) of the investment and the Net Present Value (NPV) of future cash flows.

Prepare a Day-Zero Balance Sheet

Develop a balance sheet that represents the project's financial position at the outset (day zero). This financial snapshot should account for all assets, liabilities, and equity to provide a clear overview of the project's financial situation before it begins.

Analyze Different Alternatives for Feasibility

Explore various alternatives and scenarios for the project's feasibility. Assess different approaches, technologies, or business models to identify the most viable option. Consider the potential impact of these alternatives on the project's success. Make sensibilities to potentila risks.

Make a Go/No-Go Decision

Based on the findings and analysis conducted throughout the feasibility study, make a well-informed decision on whether to proceed with the project (a "Go" decision) or abandon it (a "No-Go" decision). Ensure that the decision aligns with the project's goals and aligns with the information presented in the study.

These steps provide a structured approach to conducting a feasibility study, ensuring that all relevant aspects of the project are thoroughly assessed and considered before making a decision on its viability.

In conclusion, a feasibility study is an indispensable tool for any project, business venture, or initiative. It serves as the critical bridge between a concept and a well-informed decision. By following a systematic process that includes a preliminary analysis, technical assessment, commercial evaluation, financial projections, and a careful consideration of alternatives, stakeholders can gain a comprehensive understanding of a project's viability.

The feasibility study's ability to assess market demand, technical feasibility, operational requirements, financial viability, and potential risks empowers decision-makers to make informed choices. Whether it's a real estate development, a new product launch, a manufacturing expansion, an IT system upgrade, or any other endeavor, a feasibility study helps in risk management, efficient resource allocation, and, ultimately, the successful realization of the project's goals.

It's important to remember that a well-conducted feasibility study not only serves the purpose of greenlighting a project but also provides a foundation for its long-term success. It gives stakeholders the confidence that the project is based on sound analysis and planning. In a world of complex challenges and opportunities, the feasibility study is a guiding compass for those seeking to turn innovative ideas into reality.

Make sure you hire the right consultants to deliver your feasibility study or business plan. Our firm, Aninver Development Partners, specializes in designing bankable feasibility studies to make sure projects continue to their following phase.

Send us a message on our contact page and we can discuss how we can help you.

Some of our experience conducting feasibility studies can be seen below:

Feasibility Study for a new marina in the island of San Andrés through PPP
Pre-feasibility study for construction of silo storages in Northern Ghana through PPP
Feasibility study of a real estate WAQF project in Cotonou (Benin)
Feasibility study and analysis of strategic alternatives of a touristic development in Natal
Feasibility study for creation of an Investment and Export Promotion Agency of Health services in Tunisia
Feasibility Study for car parks in Bishkek though PPP
Feasibility study of markets in Benin and Togo under PPP scheme
Feasibility Study for the establishment of a Large-Scale Cashew Processing Plant in Zambia
Public Private Partnership (PPPs) study in the Housing Sector
Review of Business Case for Manila Central Subway
First Mover PPP Prefeasibility Study
Review of the feasibility study of the PPP project Complejo El Brillante, in Cordoba (Spain)
Review of pre-feasibility study of a Health PPP project

Alvaro de la Maza is one the founding partners of Aninver Development Partners. Alvaro is a Civil Engineer, MS on Infrastructure Management and MBA by IESE Business School.Alvaro has extensive experience in Infrastructure and Public Private Partnerships. Alvaro has worked and led multiple consulting projects for clients such as the World Bank, the African Development Bank and other donors.Alvaro enjoys creating digital products and he has led the development of market intelligence platforms in d...

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Business Feasibility Study: Turning Business Ideas into Reality

Over 30 years in business as an owner, restaurateur, and consultant, offering a unique understanding of business and marketing expertise.

“ Chase the vision, not the money, the money will end up following you. “ ~ Tony Hsieh

Key Takeaways

Business Feasibility Study : An evaluation process to determine the viability of a business idea, covering market viability, financial feasibility, and operational capacity.
Market Research : Investigates the target market, customer demand, competitive landscape, and market opportunities to validate the product or service demand.
Financial Viability Assessment : Involves detailed financial projections, including start-up costs, operating expenses, revenue forecasts, and profitability analysis, to ensure financial sustainability.
Technical Feasibility : Examines the technical resources, technology, and infrastructure required to deliver the product or service effectively.
Legal and Regulatory Compliance : Identifies legal obligations, industry-specific regulations, and ethical considerations impacting the business.
Operational Feasibility : Assesses the operational processes, resource allocation, and scalability of business operations.
Risk Analysis : Identifies potential business risks and develops contingency plans to mitigate these risks.

Introduction to a Business Feasibility Study

Got an idea for a new business venture? Whether it's a small startup or an expansion of an existing business, one of the first steps you should consider is conducting a Business Feasibility Study. Think of it as your business's reality check. This article provides you with the information you need to determine if your business idea is viable and has the potential for success.

At its core, a Business Feasibility Study is a comprehensive process that evaluates the practicality of your business idea. It's not just about finding out if your idea can work, but it's also about identifying potential obstacles and opportunities that lie ahead. This study looks into various aspects of the business, such as market viability, financial feasibility, legal compliance, and more.

The purpose of this study is not to discourage you but to give you a clear picture of what you're stepping into. It helps you answer crucial questions like: Is there a demand for your product or service? Can you realistically compete in the market? What are the financial requirements and risks involved? By addressing these questions early on, you can make informed decisions and avoid costly mistakes.

As you investigate deeper into the feasibility study, you'll come across several components, from analyzing your target market to understanding the financial implications of your venture. Each component plays a vital role in shaping your business strategy and ensuring that your venture is grounded in reality.

Remember, the goal here is not just to validate your business idea but also to lay down a solid foundation for your business plan. A well-conducted Business Feasibility Study can be a powerful tool in attracting investors, securing loans, and guiding your strategic decisions as you move forward.

In the following sections, we'll explore each aspect of the Business Feasibility Study in detail, guiding you through the steps to conduct one effectively. Especially if you're a budding entrepreneur, understanding how to navigate through these studies can be a game-changer for your business success.

Steps in Conducting a Business Feasibility Study

Now that we've broached the topic of a Business Feasibility Study let's walk through the steps to conduct one effectively. This type of hike can seem daunting at first, but breaking it down into manageable steps makes it much more approachable. Each of the following steps will give you valuable insights into the feasibility of your business idea. The key is to approach this study with an open mind and a willingness to evaluate every aspect of your business idea critically.

Define Your Business Idea and Goals : The first step is crystal clear: know what your business idea is and what you want to achieve with it. This might seem obvious, but having a well-defined goal will guide the entire feasibility study.
Conduct Preliminary Analysis : Before diving deep, do a quick initial check to see if your idea has any obvious flaws or if there are immediate red flags. This analysis could include a basic market scan, a quick review of similar existing products or services, and a brief assessment of your potential customer base.
Market Research : This is where you roll up your sleeves and dive into the nitty-gritty of your target market. Who are your potential customers? What do they need? What are the current trends affecting your industry? Market research can range from online surveys and focus groups to in-depth competitor analysis.
Organizational and Technical Assessment : Here, you need to evaluate whether you have or can obtain the necessary resources, including technology, staff, and expertise, to turn your idea into reality. This step is crucial in understanding the operational aspect of your business.
Financial Viability Assessment : One of the most critical aspects of the feasibility study is financial assessment. This involves creating detailed financial projections, including start-up costs, operating costs, revenue forecasts, and profitability analysis. It's about figuring out if your idea can be profitable and sustainable in the long term.
Legal and Regulatory Compliance : Every business operates within a legal framework. In this step, you should identify the legal and regulatory requirements related to your business. This could include licenses, permits, or any industry-specific regulations.
Risk Assessment and Contingency Planning : No business venture is without risk. Identifying potential risks and developing contingency plans to mitigate these risks is a vital part of the feasibility study.
Conclusion and Recommendations : Based on your findings, draw conclusions about the viability of your business idea. Is it feasible? If so, what are the next steps? If not, what alternative strategies could you consider?

Market Feasibility Study

In this section, let's talk about how you gather a wealth of information that will be critical in making informed decisions about your business idea. The goal is to ensure that there is a market for your product or service and to understand the dynamics of that market to position your business for success strategically.

Market Analysis for Feasibility : Understanding your market is a cornerstone of business success. A thorough market analysis for feasibility involves examining the industry you're entering, the demand for the product or service you plan to offer, and the dynamics of the market itself. This step is not just about seeing if there's a market for your idea but understanding the nuances of that market – its size, growth trends, and customer behaviors. This knowledge is crucial in shaping your business strategies and offerings to ensure they resonate with your target audience .
Customer Demand Analysis Feasibility : Diving deeper, customer demand analysis focuses on the needs and preferences of your target demographic. It's about asking questions like, Who are your potential customers? What are their buying habits? What problems do they need to solve? This analysis helps you tailor your product or service to the specific needs and desires of your customers, increasing the likelihood of your business's success.
Market Opportunity Assessment : Identifying market opportunities is about spotting gaps in the market that your business can fill. This might include underserved areas, emerging trends, or unique angles your competitors havent explored. By identifying these opportunities, you can position your business to take advantage of them, giving you a competitive edge.
Competitive Analysis Feasibility Study : Finally, understanding your competition is vital. A competitive analysis involves looking at who your competitors are, what they offer, their strengths and weaknesses, and how they meet the market's needs. This analysis not only helps you find your unique selling proposition but also teaches you about the successes and failures of others in your industry.

Financial Feasibility Study

It is here you'll gain a comprehensive understanding of the financial aspects of your business. It's about ensuring that your business idea is not just viable in the market but is also financially sound and capable of generating profits.

Financial Viability Assessment : This step is all about the numbers. A financial viability assessment examines whether your business idea makes financial sense. It's where you crunch the numbers to understand the financial health of your proposed venture. This includes forecasting revenues, estimating start-up and operating costs, and projecting profits and cash flow . The goal here is to determine if your business can be financially sustainable and profitable in the long term.
Cost Analysis in Feasibility Study : Every business incurs costs, and understanding these is crucial. In this part of the study, you'll break down all the costs associated with starting and running your business. This includes direct costs like inventory and labor, as well as indirect costs like marketing and administrative expenses. A thorough cost analysis helps you plan your finances more effectively and avoid unexpected financial challenges.
Investment Feasibility Analysis : This analysis focuses on the investment aspect of your business. How much capital will you need to get started, and where will it come from? This section explores potential funding sources such as loans, investors, or personal savings and assesses the feasibility of securing the required funds. It also involves evaluating the risk associated with these investments and their potential returns.
Return on Investment in Feasibility : Lastly, calculating the Return on Investment (ROI) is a key component. This involves estimating how much profit your investment will generate relative to its cost. It's a crucial metric that helps you understand the value you can expect from your business venture. A favorable ROI indicates that your business idea could be a wise investment.

Technical Feasibility Study

The goal of the following section is to provide you with a comprehensive understanding of the legal landscape in which your business will operate. It's about ensuring that your business idea is robust, not just in terms of market and financial viability but also in its ability to meet legal and ethical standards.

Legal Requirements Feasibility : When starting a business , you must navigate a maze of legal requirements. This part of the feasibility study focuses on understanding all the legal aspects related to your business. This includes local, state, and federal laws that apply to your business , industry-specific regulations, and requirements for permits and licenses. The aim is to ensure that your business idea is not only feasible from a market and financial perspective but also legally viable. Legal compliance is more than just ticking boxes; it's about understanding how legal aspects can impact your business operations. For instance, if you're in a highly regulated industry like healthcare or finance, legal compliance becomes even more critical. The study should also consider the implications of not meeting these legal requirements, which could range from fines to the shutdown of your business operations.
Evaluating Ethical Considerations : In addition to legal compliance, it's also important to consider the ethical implications of your business. This involves evaluating how your business practices align with ethical standards and societal expectations. Its about doing the right thing, not just the legally required thing. For example, if your business deals with sensitive customer data, you need to ensure that data is handled ethically and responsibly.
Impact on Business Strategy : Legal and ethical considerations can significantly impact your business strategy. For example, if there are stringent environmental regulations in your industry, your business strategy may need to include sustainable practices and eco-friendly solutions. The feasibility study should assess how legal and ethical considerations can be integrated into your business strategy, ensuring that your business is not only compliant but also socially responsible.

Risk Analysis and Scheduling

This section of your feasibility study will arm you with the knowledge and strategies to anticipate and manage the risks associated with your business venture. It's about being prepared and proactive, rather than reactive, to the challenges that your business might face.

Risk Assessment in Feasibility Studies : Starting a business is inherently risky, but understanding and planning for these risks can greatly improve your chances of success. In this part of your feasibility study, you'll identify potential risks that could impact your business. This includes financial risks, such as unexpected costs or revenue shortfalls. Operational risks like supply chain disruptions, market risks, such as changing consumer preferences, and other external risks, including regulatory changes or economic downturns. After identifying these risks, the next step is to assess their likelihood and potential impact on your business. This involves not only recognizing the risks but also understanding how they could affect your operations and financial health. Risk assessment helps you develop strategies to mitigate these risks, such as diversifying your product line, securing insurance , or establishing strong supplier relationships.
Project Management in Feasibility : Effective project management is crucial in executing your business plan and in conducting your feasibility study. This includes planning, organizing, directing, and controlling resources to achieve specific goals. Good project management in feasibility studies ensures that your research is thorough, timely, and aligned with your business objectives. It also involves setting realistic timelines for your project, allocating resources efficiently, and managing stakeholders' expectations. Incorporating project management principles into your feasibility study can help in scheduling and organizing the various components of the study. It ensures that the study is completed in a systematic and efficient manner, providing you with reliable and actionable insights.

Business Model and Strategy

In this section, you're not just evaluating the feasibility of your business idea but also ensuring that it aligns with a larger strategic vision. It's about crafting a business model and strategy that are not only feasible but also poised for growth and success in the long run.

Business Model Evaluation : The heart of your business feasibility study lies in evaluating your proposed business model. This is where you align your business idea, market research, financial assessments, and technical capabilities to see if they all fit together into a viable business model. A business model evaluation involves scrutinizing how you plan to create, deliver, and capture value. It answers questions like: How will you generate revenue? What value are you providing to your customers? How will you reach your target market? What are the costs involved, and how will they be covered? This evaluation is crucial in understanding whether your business model is practical, sustainable, and profitable.
Business Strategy Feasibility : Once you have a clear picture of your business model, the next step is to align it with your overall business strategy. This involves assessing whether your business model supports your long-term business goals and objectives. Business strategy feasibility is about ensuring that your approach to the market, your growth plans, and your operational strategy are all in sync with the findings of your feasibility study. It's about making strategic decisions that are informed by data and insights from your study rather than just intuition or assumptions.

Operational Feasibility Study

Operational Feasibility Analysis: This part of the feasibility study is about getting down to the brass tacks of how your business will operate on a day-to-day basis. It's about examining if your business plan can be effectively translated into operations. This includes assessing your operational processes, from production or service delivery to supply chain management, customer support, and sales operations.

You need to evaluate whether you have the necessary resources, such as manpower, materials, and technology, to carry out your business operations. It's also important to consider the scalability of your operations – can they grow as your business grows?

Another key aspect of operational feasibility is determining if your business operations align with your organizational structure and culture. For instance, if your business requires rapid innovation and flexibility, do your operational plan and organizational culture support that?

Operational feasibility is not just about whether you can do something but whether you can do it efficiently, effectively, and sustainably.

Specialized Feasibility Studies

This section is about tailoring your feasibility study to address the specific considerations of your industry, the environmental impact of your business, and your growth potential. It's about making sure that your business is not only viable at launch but also set up for future success.

Industry-specific Feasibility Studies : Different industries have unique challenges and opportunities, making it crucial to conduct industry-specific feasibility studies. For instance, a feasibility study in the tech industry would focus heavily on technological innovations and market adoption rates, while one in the manufacturing sector might concentrate more on production capabilities and supply chain logistics. Understanding the nuances of your specific industry is vital to ensure that your feasibility study is relevant and accurate. It helps in identifying industry-specific risks, regulatory requirements, and market dynamics that are crucial for your businesss success.
Environmental Impact Business Study : In an era where sustainability is increasingly important, considering the environmental impact of your business is essential. This part of the feasibility study assesses how your business operations will affect the environment and what measures you can take to minimize negative impacts. This includes looking at factors like energy consumption, waste management, and the sourcing of materials. Being environmentally responsible can not only help reduce potential liabilities but can also enhance your brand's reputation and appeal to environmentally conscious consumers.
Business Growth Feasibility Study : This section looks beyond the initial launch of your business to its potential for growth. It involves evaluating how scalable your business model is, identifying potential areas for expansion, and assessing the feasibility of these growth plans. It's about understanding what it will take for your business to grow, both in the short-term and long-term, and whether your current plan supports this growth.

Feasibility Study Tools and Techniques

Let's now explore a variety of tools and techniques essential for conducting a well-rounded feasibility study. Understanding how to use these tools and techniques effectively is crucial in gaining a holistic view of your business ideas feasibility.

Overview of Feasibility Study Tools: To conduct an effective feasibility study, various tools can be utilized. These tools help in collecting data, analyzing information, and making informed decisions. For example, SWOT analysis (Strengths, Weaknesses, Opportunities, Threats) is a common tool used to evaluate the strategic position of a business idea. Financial tools like cash flow forecasting , break-even analysis, and ROI calculations are essential for the financial aspect of the study. For market analysis, tools such as market surveys, customer interviews, and competitor analysis can provide valuable insights.

Techniques Used in Feasibility Studies : Besides tools, certain techniques are pivotal in conducting a thorough feasibility study. These include qualitative methods like focus groups and interviews that provide an in-depth understanding of customer attitudes and preferences. Quantitative methods like statistical analysis and market trend analysis offer concrete data on market size, growth rates, and customer demographics. Additionally, scenario planning can be used to envision various business scenarios and plan accordingly.

Utilizing Technology in Feasibility Studies : In the digital age, leveraging technology can significantly enhance the efficiency and accuracy of your feasibility study. Software tools for data analysis, project management software for organizing and tracking the study, and digital survey tools for gathering market insights are examples of how technology can aid in conducting a comprehensive feasibility study.

Integrating Findings to Formulate Conclusions : The final technique in a feasibility study is the integration of findings from various tools and methods to formulate comprehensive conclusions. This involves collating data from market, financial, technical, and legal analyses to see the overall picture. It's about synthesizing information from different sources to determine the overall feasibility and viability of your business idea.

Comparative Analysis

Now, we need to compare and contrast the roles of a business plan and a feasibility study, emphasizing how they work together in the planning and execution of a successful business venture.

Business Plan Versus Feasibility Study : It's essential to understand the difference between a business plan and a feasibility study as they serve different, yet complementary, purposes. A business plan is a detailed roadmap for the operation and growth of your business. It outlines your business goals, strategies to achieve them, operational structure, marketing plan , and financial projections. Essentially, a business plan is a guide for how to run your business and achieve success.

On the other hand, a feasibility study is more of a preliminary step. Itis conducted before the business plan to assess the viability of a business idea. The feasibility study helps determine whether your idea is worth pursuing before you invest significant time and resources into developing a business plan. It includes market analysis, financial feasibility, legal compliance, and technical assessment.

Comparatively, a feasibility study asks the question, Should this business be started? While a business plan addresses How will this business succeed? A feasibility study is what you need when deciding if your business idea is worth pursuing, and a business plan is what you'll use to guide your business's establishment and growth after deciding it's feasible.

Integrating Feasibility Study Findings into Business Planning : Often, the findings of your feasibility study will directly inform your business plan. For example, insights from market analysis in the feasibility study can shape your marketing strategies in the business plan. Financial assessments from the study can help in creating more accurate financial projections in your business plan. In this way, the feasibility study can be seen as the foundation upon which your business plan is built.

Final Thoughts on Business Feasibility Study

Summarizing Key Findings : After thoroughly examining each aspect of your business idea through the feasibility study, it's time to bring all these findings together. This summary should encapsulate the insights from market analysis, financial viability, technical assessment, legal compliance, and operational feasibility. Highlight the key strengths and opportunities your study has revealed, as well as any significant challenges or risks.

Providing Actionable Recommendations : Based on the key findings, the next step is to provide actionable recommendations. If your feasibility study shows that your business idea is viable, outline the next steps to take your idea from concept to reality. This could include developing a detailed business plan, securing funding, or initiating market entry strategies.

If the feasibility study suggests that your business idea may not be viable, or if there are significant challenges, recommend alternative approaches. This might involve pivoting your business idea, exploring different markets, or addressing the identified weaknesses before proceeding.

Emphasizing the Importance of Continuous Evaluation : It's important to remember that a feasibility study is not a one-time task but an ongoing process. As your business grows and the market evolves, continuously re-evaluating the feasibility of your business model and strategies is crucial. This ongoing evaluation ensures that your business remains relevant and competitive in a changing business environment.

Encouragement and Motivation : Lastly, whether your feasibility study results are positive or less encouraging, it's important to stay motivated. Every business journey comes with its challenges and learning opportunities. Use the insights gained from this study to refine your business idea and strategy. Remember, the ultimate goal of a feasibility study is to set the stage for a successful and sustainable business.

FAQs on Business Feasibility Study

While all components of a business feasibility study are important, the market analysis is often considered critical. It helps determine if there's a demand for your product or service and sets the foundation for the rest of your study.

The duration of a business feasibility study can vary widely depending on the complexity of the business idea and the depth of analysis required. Generally, it could take anywhere from a few weeks to several months.

It's possible to conduct a basic feasibility study on your own, especially for small-scale projects. However, for more complex or larger-scale business ideas, it might be beneficial to engage a professional consultant who can provide expertise and an objective perspective.

If your feasibility study suggests that your business idea might not be viable, consider exploring alternative ideas, adjusting your business model, or addressing the identified challenges. Sometimes, a pivot in strategy or a different approach can make a significant difference.

It's a good practice to revisit your feasibility study periodically, especially when there are significant market shifts, technological advancements, or changes in consumer behavior. This helps ensure that your business stays relevant and adapts to changing conditions.

A business feasibility study is a preliminary assessment to determine the viability of a business idea, while a pilot project is a small-scale implementation of the business plan to test its practicality in a real-world setting.

There are various software tools available for different aspects of a feasibility study, such as financial modeling (e.g., Excel), market analysis (e.g., MarketResearch.com), and project management (e.g., Trello or Asana). The choice of tools depends on your specific needs and the complexity of the study.

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The information provided on The Business Trailhead is intended for educational purposes only and should not be considered legal, financial, or tax advice. Your personal situation is unique, and the products and services we feature may not be suitable for your specific circumstances. Please consult with a qualified legal, business, or financial advisor to discuss your individual needs and goals before making any financial decisions. We strive to ensure the accuracy of the information presented on the date of publication. However, offers and details within this content may change at any time without prior notice.

Feasibility Report
December 12, 2022

The Importance of a Feasibility Study to an Entrepreneur

A feasibility study is a vital step for business owners to do in order to establish whether or not their project or business idea is suitable for commercialization. It comprises conducting an exhaustive analysis of the market environment, determining whether or not the venture is financially viable, and identifying any potential risks. Through conducting a feasibility study, entrepreneurs can gain a great deal of knowledge regarding the market, the demands of customers, and the competition. They have the ability to mitigate risks, effectively distribute resources, and make decisions based on accurate information. In addition to this, they are able to build practical financial solutions. The ultimate goal of a feasibility study is to increase the possibility that the project will be successful by identifying potential issues at an earlier stage and establishing the foundation for a prosperous and long-lasting business.

Table of Contents

A feasibility study is an analysis of the potential success of a business plan. Many would-be business owners act hastily, following the excitement of an initial concept without giving it much thought.

You’ve likely heard the adage, “Don’t judge a book by its cover,” before. The same logic applies when thinking about a company. Before investing your time and money, you should always determine whether or not the idea has a chance of succeeding.

Your company strategy should include details from a feasibility analysis. However, not every company owner needs to undertake their own feasibility study. In this post, we’ll go over the many types of company ideas, the procedures you should take to evaluate their viability, and the results you may expect to see.

Why your company shouldn’t discount the value of a feasibility study?

The feasibility study is a crucial research tool used to evaluate the potential, viability, and practicality of a prospective business. It encompasses several key elements:

Assessing Success: The feasibility study serves as an excellent tool for determining the likelihood of success or failure for a new company initiative. It can also be utilized when considering the addition of new products or concepts to an existing company.
Comprehensive Evaluation: All the necessary steps to determine the likelihood of success for a business proposal are included in the feasibility study. It follows a methodical process that helps weigh the benefits and drawbacks of each phase before proceeding further.
Informed Decision-making: The study provides outcomes that inform crucial decisions, such as whether to pursue the concept further, refine it, or abandon it altogether. This allows businesses to make well-informed choices based on the findings of the study.
Prerequisite for Business Strategy: The feasibility study is a prerequisite for developing a robust business strategy. It provides essential insights and data that shape the strategic direction of the business.
Identifying Options and Fixes: Conducting a feasibility study helps identify potential options and fixes that may not have been discovered otherwise. By conducting this research upfront, businesses can avoid allocating resources, time, and money to a business idea that may not operate as intended. This prevents further investment in addressing previous errors.
Data-driven Decision-making: Collecting and analyzing data during the feasibility study makes it easier to make informed choices about choosing the most lucrative route. It involves examining every aspect of incorporation and business operation, ensuring a comprehensive understanding of the potential risks and rewards.

Here’s why a feasibility study is essential for entrepreneurs in Dubai:

Informed Decision-Making: It provides valuable insights into the market, competition, financial viability, and potential risks of your business idea. This data empowers you to make informed decisions about whether to pursue your venture, adjust your approach, or seek alternative options.
Reduced Risk and Uncertainty: By identifying potential challenges and roadblocks early on, you can develop strategies to mitigate them. This proactive approach reduces the risk of costly mistakes and setbacks, improving your chances of success.
Enhanced Financial Credibility: A well-crafted feasibility study acts as a professional document that showcases your business proposal to potential investors or lenders. It demonstrates your seriousness, thoroughness, and understanding of the market, increasing their confidence in your venture.
Optimized Resource Allocation: The study helps you estimate the resources required to launch and operate your business, including start-up costs, operational expenses, and manpower needs. This allows you to allocate your resources efficiently and avoid financial mismanagement.
Competitive Advantage: Understanding your competitors’ strengths and weaknesses through market analysis provides you with a clear edge. You can leverage this information to differentiate your offerings, gain a competitive advantage, and attract your target audience.

Feasibility Study components include (but are not limited to),

Economical viability.

A feasibility study can determine whether a specific business idea is financially appealing. Without financial means, no action can be carried out. This covers the estimation of all expenditures, from the initial project costs through ongoing operating expenses as the project nears the end of its existence. The initial cash is one of the most significant expenses. The analysis entails figuring out how much money is needed to launch a firm.

The potential sources of generating this capital are provided when these have been determined. The return on investment is another significant number (ROI). An activity’s potential for financial advantage is developed. Future financial flows that could potentially occur are calculated. It also advances the payback period, which shows how long it will take an investment to become profitable. Thus, all of these statistics are compiled into a single document.

Financial viability

A feasibility study determines the financial gains the business will realize. It demonstrates to what extent the idea’s financial benefits outweigh its financial drawbacks. The comparison of all the expenses to be paid and the rewards to be gained is done with accuracy. This not only establishes the project’s viability but also points the company in the direction of protecting itself from an insufficient resource allocation. The idea’s viability is evaluated, and management gets a clear summary of all the different expenses it will have to pay from the project’s inception to completion. The total economic viability of the project is determined by comparing these expenses to any potential advantages.

Feasibility Study of the Market and Marketing

Market feasibility is a crucial component of the feasibility research. This section contains all the information about the relevant industry. The industry’s size, retail value, and trends are among the vital facts acquired. Both the current market and its possibilities for the future are examined. In order to guarantee the business’ success, a thorough review is necessary. The environment for competition is also ready. As a result, the company chooses the best positioning plan for itself in relation to the competitors.

It also establishes the product or service’s description. All potential outcomes are taken into account and evaluated in order to choose the most advantageous one. The size of the market in terms of possible purchasers is also calculated, along with a profile of the potential clients. Sales forecasts can be estimated using previous data.

The target audience’s various places are investigated, and the most advantageous audience and location may be chosen. It is possible to determine the target audience’s level of tolerance for the deliverable. It guarantees that the appropriate product is created for the appropriate customers. Decisions and pricing plans are made. It points decision-makers in the direction of finding the best chances.

Technology Readiness

The support network necessary for efficient business operations is another fundamental. It’s possible to find several logistics-related options. It aids in discovering the resources’ availability in terms of the necessary labor, materials, and pertinent technology. The firm’s technological resources’ potential has been estimated. A skill evaluation of the technical staff is carried out. Any weaknesses are examined, along with potential solutions. It also entails assessing crucial systems, such as the technological requirements for the system’s hardware, software, and other components.

Operational and Organizational Viability

The need for human resources is also carefully considered. This category includes an evaluation of the firm’s capability as well as the professional skill requirements. The requisite professional backgrounds and any weaknesses in the current human resource of the new company or project are examined. Decisions on recruiting may be based on the feasibility study in the absence of a productive team. Accordingly, the complete corporate and legal organizational framework is planned. In a similar vein, this analysis aids in ensuring that the company has enough resources for efficient functioning.

Legal Possibilities

Every nation has specific legal ramifications. It is important to take into account any legal regulations that can impede corporate operations. This research investigates every legal aspect that can be at odds with the suggested enterprise. All applicable legislation and protective measures are taken into consideration. Learning about any locational restrictions that may apply to a company’s operations owing to legal obligations can help that organization save a lot of time and work.

Planning Possibility

The various stages of the business’ lifespan are planned for and taken into consideration. The key checkpoints and the whole schedule for achieving them are listed. The various stages of company activity are estimated based on future estimates. There is a list of all the necessary tasks and the times at which they must be completed.

Project sturdiness

One project involves a significant amount of investment and priceless resources. These must be used to the fullest extent possible. A feasibility assessment maps out the project’s potential whole course. It contains important data, such as financial estimates. It makes sense to choose the venture or project that will be most resilient to long-term challenges and future financial concerns.

Constraints

The examination leads to the identification of all potential business limitations in the feasibility study. These could include financial, technical, resource-related, technological, financial, marketing, logistical, legal, and environmental restrictions, among others. An estimate of these restrictions offers a clear picture of all the issue areas where the project may encounter roadblocks in the future and their underlying causes.

Important choices

The choice to move forward with the business is one of the feasibility study’s main purposes. A clear image of the many features is formed because all the business-related factors are included. Due to the limited availability of resources, it is crucial to make sure they are being used effectively. It is crucial to choose the best course of action since doing so prevents valuable resources from being spent on unproductive endeavors and allows them to be put toward more lucrative ones down the road. By making consideration of the new initiative contingent on how the return is compared to the investment, a corporation protects itself from potential losses. In addition, a feasibility analysis gives specific arguments against the anticipated enterprise.

Conclusion:

Investing in a feasibility study is an investment in your business’s future. It reduces uncertainty, minimizes risk, and provides a roadmap for success. In the competitive environment of Dubai, entrepreneurs who utilize this valuable tool are more likely to navigate the challenges and achieve their desired results.

Since it assists in evaluating many possibilities and their ramifications, the study is an experimental process. One of the most crucial decisions in business development is whether to move forward or not because decisions cannot be undone and it is always preferable to take measured actions than to correct unwise ones later.

KGRN is the most qualified of all the Feasibility Study Consultants in Dubai . contact for assistance and support from trained professionals.

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October 25, 2021
Posted by: BPlan Experts
Categories: Entrepreneurship, Planning, Startups

The term feasibility analysis, as its name implies, is a tool used to determine the viability of a company idea. A feasibility study identifies all the resources needed to start a company and analyze the financial and legal aspects of the business plan. So, what’s a business plan? A business plan is a document that details the business idea. The goal of the business plan is to accurately describe the project, its expected results, and financial requirements.

Table of Contents

What is feasibility analysis?

Most people think of feasibility analysis as a product like an automobile that needs to undergo various tests. There is no need to invest huge amounts of money testing a car that does not require it. In other words, the car should perform well but without a risk of an unexpected failure. Since most businesses are not as simple as the car, the concept of feasibility study also applies to business plans. Feasibility analysis are usually expensive but they are a must for any startup. A feasibility analysis identifies all the resources needed to start a company and projects the financial and legal aspects of the business plan. The following sections will help you with the feasibility study process.

First Step: Ideation & Defining the scope of the project

Ideation is the “getting it all off the ground” stage of a feasibility analysis. It involves identifying the problem, what needs to be done, the solution, and how the company will succeed. For example, you might get an idea for a baby pacifier glove. You want to make these baby gloves for day-care providers who deal with drooling and soap. What do you need to do? First, you need to identify the end goal. Will your pacifier glove be used for daycare providers or children?

You need to know what will be the focus of your business and how you plan to market your product. After all, a business plan without a marketing plan is like driving a car without a steering wheel. This is also the stage when you determine if the company is feasible.

Second Step: Market Analysis

The next step involves an in-depth assessment of the market for the product being developed. This assessment entails identifying the current market for the product or service, a detailed survey of current companies in the targeted market, and a list of competitors. The market analysis determines the market for the product, along with the legal and logistical requirements, who can make the investment required to market and produce the product, and how competitive the product will be.

Third Step: Industry Research

When thinking of your venture, go beyond marketing and sales and start looking for the industry. Is the industry niche? Does it require special expertise? What industries are similar to yours? How will these factors affect the overall cost of production? Determine who the competition is, what their market share is, and if the industry will still exist in the future.

Fourth Step: Opportunity Analysis

Following the industry research, we will perform an opportunity analysis to determine the market niche, business model, revenue, and other factors which may have the greatest impact on the financial success of the startup. An opportunity analysis takes into account factors such as the role that existing or potential markets have on an idea’s viability during the feasibility analysis.

Fifth Step: Operational Research

Operational research is a type of research that explores various options and contingencies to help an investor or entrepreneur understand the feasibility of a project. The process involves brainstorming and evaluating different options and problems, ultimately generating new options, potential outcomes, and solutions to the problems that were originally identified. These steps are just some of the fundamentals of startup feasibility analysis.

If you want to start a successful company, you must do the research required to understand your market and your competitors, along with every possible opportunity that can help your company grow. How else can you prepare your company for the future? As with any venture, preparation is the key.

Sixth Step: Competitor Analysis

The next step in the feasibility analysis process is the competitive analysis, to come up with a competitive advantage that is unique to your business idea. What’s a competitive advantage? It’s a strategy that can be used to take advantage of the existing market or a strategy that can allow a company to achieve market dominance. A competitive analysis is a quick visual inspection of your industry, looking at your competition to determine how they’re doing. Although this step may seem minor, it’s one of the most important steps in the feasibility study process.

Seventh Step: Industry Best Practices

There’s a lot of research to be done to determine which industry best practices are most pertinent for your business and your target market. However, as mentioned before, this research is not limited to the needs of the industry. Companies have found ways to adapt to different markets. From shoe manufacturing to sandal making, and even selling hot dogs for a living, each industry needs to determine what they need to change to stay competitive. Even the smallest companies have this process of constantly evolving to help them stay successful.

An industry best practice is a set of standards that members of an industry follow. To remain competitive, the standard defines how the industry behaves, how they adapt to change, and what they need to achieve in the future. While doing feasibility analysis you should do this in-depth.

Eighth Step: Business Model Generation

Once the financial and legal aspects have been analysed, the business plan can be generated. The name business model generation implies that, essentially, you should be able to generate a working business plan for your idea. Once you have a business model that would work, you can then develop it into a working business plan. If you are a first-time entrepreneur and want to write a business plan for your idea, take a look at my “Write a business plan like an expert in 2021”. Congratulations, you’re almost ready to start building your startup.

Ninth Step: Risks & Mitigation Study

The next step in the feasibility analysis is to conduct a risk analysis to determine the amount of risk the project poses. To do this, divide the business plan into smaller and more manageable sections. Allocate some time to go through each section and perform a risk analysis. First, you’ll need to determine the risk that the project faces by identifying the top threats. In many cases, the top threats will include cash flow concerns and threats of losing investment funds. You should also list all of how the project can be improved upon. The goal of this step is to gain more control over the project by addressing all of the top threats.

Tenth Step: Budgeting & Financial Assessment

Budgeting is an important part of the feasibility analysis. A company is only as good as its budget. The success of an organization depends on how well it manages its funds and resources. The financial assessment is another important part of the feasibility study. It helps to determine whether an organization can afford a new project or not. It also helps to predict future cash flow for the organization based on past financial information, which helps it decide if it can undertake new projects now or in the future.

As per this section, financial assessment and budgeting are integral parts of any feasibility analysis. They are needed to ensure that the company has done its due diligence before deciding on any investment opportunities or changes in management strategy.

Eleventh Step: Implementation Roadmap

The main purpose of the implementation roadmap is to put the actual project into motion. It’s all about executing the project that you have planned.

In conclusion, conducting a feasibility analysis can help you determine your chances of success. A well-done feasibility study will not only look at the market potential, but will also help you understand the people, processes, policies, costs, competition, and even the culture of the industry you are considering entering. The key to success with any business venture is to take the time to do your research. Hiring professional feasibility study services will help you with your feasibility analysis and make sure you don’t miss vital information. They can save you time and money in the long run.

References: – Feasibility Study – Investopedia – Business Planning for Startups & Entrepreneurs

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Difference between Feasibility Study and Business Plan

Entrepreneurs face many challenges when creating a new venture. Although the business plan is one of the most well-known documents, the feasibility study may be just as important. Before the entrepreneur can seek funding, he or she must demonstrate that the idea is truly a good one.

Rochester.edu explained that a feasibility study, “can be defined as a controlled process for identifying problems and opportunities, determining objectives, describing situations, defining successful outcomes, and assessing the range of costs and benefits associated with several alternatives for solving a problem.”

In order to create a feasibility study, entrepreneurs need to define dimensions of business viability including: market viability, technical viability, business model viability, management model viability, economic and financial model viability, and exit strategy viability.

A good outline for a feasibility study includes:

Introduction
Product or Service
Market Environment
Competition
Business Model
Market and Sales Strategy
Production Operations Requirements
Management and Personnel Requirements
Regulations and Environmental Issues
Critical Risk Factors
Financial Predictions Including: Balance Sheet, Income Statement, Cash Flow Statement, Break Even Analysis, and Capital Requirements

A feasibility study is not the same thing as a business plan. The feasibility study would be completed prior to the business plan. The feasibility study helps determine whether an idea or business is a viable option. The business plan is developed after the business opportunity is created. StrategicBusinessTeam.com explained, “A feasibility study is carried out with the aim of finding out the workability and profitability of a business venture. Before anything is invested in a new business venture, a feasibility study is carried out to know if the business venture is worth the time, effort and resources. A feasibility study is filled with calculations, analysis and estimated projections while a business plan is made up of mostly tactics and strategies to be implemented in other to grow the business.”

While it may seem the feasibility study is similar in many ways to the business plan, it is important to keep in mind that the feasibility study is developed prior to the venture. StrategicBusinessStream pointed out that “a feasibility study can readily be converted to a business plan.” It’s important to think of the business plan in terms of growth and sustainability and the feasibility study in terms of idea viability.

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Project management is the process of planning, organizing, and managing resources to bring about the successful completion of specific project goals and objectives. A feasibility study is a preliminary exploration of a proposed project or undertaking to determine its merits and viability. A feasibility study aims to provide an independent assessment that examines all aspects of a proposed project, including technical, economic, financial, legal, and environmental considerations. This information then helps decision-makers determine whether or not to proceed with the project.

The feasibility study results can also be used to create a realistic project plan and budget. Without a feasibility study, it cannot be easy to know whether or not a proposed project is worth pursuing.

A feasibility analysis evaluates the project’s potential for success; therefore, perceived objectivity is an essential factor in the credibility of the study for potential investors and lending institutions. There are five types of feasibility study—separate areas that a feasibility study examines, described below.

1. Technical Feasibility

This assessment focuses on the technical resources available to the organization. It helps organizations determine whether the technical resources meet capacity and whether the technical team is capable of converting the ideas into working systems. Technical feasibility also involves the evaluation of the hardware, software, and other technical requirements of the proposed system. As an exaggerated example, an organization wouldn’t want to try to put Star Trek’s transporters in their building—currently, this project is not technically feasible.

2. Economic Feasibility

This assessment typically involves a cost/ benefits analysis of the project, helping organizations determine the viability, cost, and benefits associated with a project before financial resources are allocated. It also serves as an independent project assessment and enhances project credibility—helping decision-makers determine the positive economic benefits to the organization that the proposed project will provide.

3. Legal Feasibility

This assessment investigates whether any aspect of the proposed project conflicts with legal requirements like zoning laws, data protection acts or social media laws. Let’s say an organization wants to construct a new office building in a specific location. A feasibility study might reveal the organization’s ideal location isn’t zoned for that type of business. That organization has just saved considerable time and effort by learning that their project was not feasible right from the beginning.

4. Operational Feasibility

This assessment involves undertaking a study to analyze and determine whether—and how well—the organization’s needs can be met by completing the project. Operational feasibility studies also examine how a project plan satisfies the requirements identified in the requirements analysis phase of system development.

5. Scheduling Feasibility

This assessment is the most important for project success ; after all, a project will fail if not completed on time. In scheduling feasibility, an organization estimates how much time the project will take to complete.

When these areas have all been examined, the feasibility analysis helps identify any constraints the proposed project may face, including:

Internal Project Constraints: Technical, Technology, Budget, Resource, etc.
Internal Corporate Constraints: Financial, Marketing, Export, etc.
External Constraints: Logistics, Environment, Laws, and Regulations, etc.

The importance of a feasibility study is based on organizational desire to “get it right” before committing resources, time, or budget. A feasibility study might uncover new ideas that could completely change a project’s scope. It’s best to make these determinations in advance, rather than to jump in and to learn that the project won’t work. Conducting a feasibility study is always beneficial to the project as it gives you and other stakeholders a clear picture of the proposed project.

Below are some key benefits of conducting a feasibility study:

Improves project teams’ focus
Identifies new opportunities
Provides valuable information for a “go/no-go” decision
Narrows the business alternatives
Identifies a valid reason to undertake the project
Enhances the success rate by evaluating multiple parameters
Aids decision-making on the project
Identifies reasons not to proceed

Apart from the approaches to feasibility study listed above, some projects also require other constraints to be analyzed -

Preparing a project's feasibility study is an important step that may assist project managers in making informed decisions about whether or not to spend time and money on the endeavor. Feasibility studies may also help a company's management avoid taking on a tricky business endeavor by providing them with critical information.

An additional advantage of doing a feasibility study is that it aids in the creation of new ventures by providing information on factors such as how a company will work, what difficulties it could face, who its competitors are, and how much and where it will get its funding from. These marketing methods are the goal of feasibility studies, which try to persuade financiers and banks whether putting money into a certain company venture makes sense.

When starting a business, one of the most important steps is to conduct a feasibility study. This study will help to determine if your business idea is viable and has the potential to be successful. Several factors need to be considered when conducting a feasibility study, including the marketability of your product or service, the competition, the financial stability of your company, and more. A feasibility study should cover the amount of technology, resources required, and ROI.

The results of your feasibility studies study are summarized in a feasibility report, which typically comprises the following sections.

Executive summary
Specifications of the item or service
Considerations for the future of technology
The marketplace for goods and services
Approach to marketing
Organization/staffing
The financial forecasts
Recommendations based on research

Suggested Best Practices

While every project has its own goals and needs, the following are best practices for conducting a feasibility study.

Do a preliminary analysis. This includes getting feedback from relevant stakeholders on the new project. Also, look for other business scenarios.
To ensure that the data is solid, determine and ask queries about it in the initial phase.
Take a market survey to identify market demand and opportunities for the new concept or business.
Create an organizational, operational, or business plan. This includes identifying how much labor is required, what costs, and how long.
Make a projected income statement that involves revenue, operating expenses, and profit.
Create an opening day balance sheet.
You will need to identify and address any vulnerabilities or obstacles.
Take an initial decision to go ahead with the plan.

Suggested Components

Here are the some suggested components for conducting a feasibility study:

Executive Summary: Write a narrative describing the project, product, or service.
Technological considerations: Ask yourself what it will take. Are you able to afford it? How much will it cost?
Current marketplace: Find out the market for your product, service, or plan in the local and global markets.
Marketing strategy: Define in the detailed description.
Required staff: What human resources are needed for this project?
Timeline and schedule: Use important interim markers to indicate when the project will be completed.
Project financials. Project financials are the different ways managers can account for money spent and earned on projects. One of the most important aspects of financial management is creating and tracking accurate project financials.

A local university was concerned about the state of the science building, which was built in the 1970s. School officials sought to determine the costs and benefits of expanding and upgrading the building, given the scientific and technological advances over the past 20 years. A feasibility study was therefore conducted.

School officials looked at several options and weighed the costs and benefits of updating and expanding the science building. There were concerns expressed by school officials about the project's cost and public reaction. The proposed new science building will be larger than the current one. The community board rejected similar proposals in the past. The feasibility study will address these concerns and any possible legal or zoning issues.

The feasibility study examined the technology requirements of the proposed concept(new science building), the potential benefits for students, and its long-term viability. Modernizing the science facility will increase the scientific research potential and ameliorate its modules. It also would allure new students.

Financial projections provided information about the scope & cost of this project and also provided information on raising funds. This covers issuing an investor's bonds and tapping into its endowment. Projections also help determine how the new science program attracts more fresh students to enroll in offered programs, increasing tuition and fees revenue.

The feasibility study proved that the proposed concept was feasible, which allowed for the expansion and modernization of the science building. The feasibility study would not have allowed school administrators to know if the expansion plans were feasible without it.

A feasibility study is an important first step in starting a new business. It is a detailed examination of whether or not a proposed business venture is likely to be successful. A feasibility study aims to provide information that will help business owners make informed decisions about their new venture.

The feasibility study will answer important questions about the proposed business, including:

What is the target market for this business?
Who are the competitors?
What are the costs associated with starting and running this business?
What are the potential risks and rewards associated with this venture?
How much revenue can this business generate?
What are the estimated profits and losses for this business?
What is the potential for growth in this industry?

This feasibility study will outline why your business idea is worth pursuing and will also help you identify any potential risks or problems that could occur. When writing a feasibility study, there are a few key things to keep in mind:

Outline your target market and how you plan to reach them.
Discuss your product or service in detail and explain why it is unique and needed.
Outline your financial projections and explain how you plan to make a profit.

1. Conduct a Preliminary Analysis

A preliminary investigation is necessary to determine whether a full feasibility study is warranted. During this stage, key information will be gathered to assess the project's potential and make a preliminary decision about its feasibility. This should include a review of relevant documents, interviews with key personnel, and surveys of potential customers or users.

2. Prepare a Projected Income Statement

To do a feasibility study, you must create a projected income statement. Your projected income statement will show how much money your business is expected to make in the coming year. It will include both your estimated revenue and your estimated expenses. This document will be essential in helping you make informed decisions about your business.

3. Conduct a Market Survey, or Perform Market Research

Conducting market research is an important step in any feasibility study. By understanding the needs and wants of your potential customers, you can determine if there is a market for your product or service. You can also get an idea of what your competition is doing and how to best position your business to meet the needs of your target market.

There are a variety of ways to conduct market research. One popular method is to conduct a survey. You can survey potential customers directly or use data from secondary sources such as surveys conducted by other organizations. You can also use focus groups or interviews to get feedback from potential customers.

Once you have gathered your data, you can use it to create a profile of your ideal customer. This will help you understand your target market and how to reach them.

4. Plan Business Organization and Operations

When starting a business, one of the first things you need is to plan your organization and operations. This involves creating a structure for your company and figuring out the logistics of how you will run it. There are many factors to consider when planning your organization and operations, such as:

Company Structure: What type of company will you be (sole proprietorship, partnership, corporation, etc.)? What will the hierarchy look like?
Location: Where will your business be located? Will you have a physical storefront or operate online only?
Marketing: How will you promote your business?

5. Prepare an Opening Day Balance Sheet

The opening day balance sheet is a snapshot of the company's financial position at the beginning of the business venture. The purpose of the opening day balance sheet is to give an idea of the amount of money that the company has to work with and track its expenses and income as they occur. This information is vital to making sound business decisions. The opening day balance sheet will include the following:

Cash on hand
Accounts receivable
Prepaid expenses
Fixed assets
Accounts payable
Notes payable
Long-term liabilities

6. Review and Analyze All Data

The feasibility study should include reviewing and analyzing all data relevant to the proposed project. The data collected should be verified against source documentation, and any discrepancies should be noted. The purpose of the feasibility study is to provide a basis for making a decision, and the data should be sufficient to support that decision.

The analysis should consider both the positive and negative aspects of the proposed project. The financial analysis should be thorough, and all assumptions should be documented. The risk assessment should identify any potential risks and mitigation strategies. The team assigned to the project should review the feasibility study and recommend the organization's leadership.

Organizational leadership should decide whether to proceed with the project based on the feasibility study's findings. If the project is approved, the organization should develop a project plan that includes a detailed budget and timeline

7. Make a Go/No-Go Decision

It is important to know when to cut your losses when starting a business. The go/no-go decision in a feasibility study comes in. The go/no-go decision is a key part of a feasibility study, and it can help you determine whether or not your business idea is worth pursuing.

Making the go/no-go decision is all about risk assessment. You need to weigh the risks and rewards of starting your business and decide whether the potential rewards are worth the risks. If the risks are too high, you may want to reconsider your business idea.

Now, let's discuss a few of the steps we take in order to do the feasibility study.

To begin, we do a preliminary study of the business case to define what is included and what we are examining and attempting to find is realistic.
Following that, we generate a forecasted income statement. We need to understand the revenue sources; how are we going to profit from this? Where does the income originate? Additionally, we must do a market study.
We need to find out whether this is a demand for our product. How much demand does this have? Is there a market for this product or service?
Plan your company's structure and operations, which is the fourth step. Specifically, what type of organization do we need, and what resources do we have? Do we have any specific personnel needs?
We also plan to generate a balance sheet on the first day. What are the income and expenses, and how can we be confident we'll be able to decide whether we're going to make our ROI?
As a result, we plan to go through and examine all of our data before making a final decision on whether or not to go forward. In other words, are we going to pursue this project or business opportunity?

When starting a business, you must create two very important documents: a feasibility study and a business plan. While they may seem similar, they are two different things with different purposes.

A feasibility study is a preliminary document that assesses the feasibility of a proposed business. It looks at the market potential, the competition, the costs and benefits of starting the business, and the risks and rewards involved.

On the other hand, a business plan is a more detailed document that outlines how a business will be run and what its goals are. It includes information about its mission statement, its products and services, its target market, its finances, and its management team.

There are many factors to consider when deciding whether or not to conduct a feasibility study. The most important question is whether the study will help you make a better decision.

Some reasons to do a feasibility study include:

You are considering a major change or investment
You want to assess the viability of a new business or product
You need to understand the risks and potential rewards associated with a project

On the other hand, some reasons not to do a feasibility study include:

You are pressed for time and don't think the study will provide enough value to justify the time commitment.
You are confident that your idea is feasible, and a study will only confirm what you already believe.
The change or investment is not significant enough to warrant the study.
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This article introduces the concept of a feasibility study and provides a few tips on conducting one. A feasibility study is an important tool for evaluating a project before starting it. By understanding the feasibility of a project, you can make better decisions about whether to move forward.

We hope this helped you understand the concept of feasibility study better. To learn more about similar project management concepts , explore our library of Project Management articles or check out our Post Graduate Program in Project Management that covers new trends, emerging practices, tailoring considerations, and core competencies required of a Project Management professional .

Q1. What Is the Main Objective of a Feasibility Study?

Feasibility study helps decision makers to determine the success or failure of a proposed project or investment. It evaluates the predicted cost and benefits of the proposed project.

Q2. What Are the Steps in a Feasibility Study?

The first step in a feasibility study is to conduct the primary analysis and create the projected income statement. Followed by doing a market survey and accordingly planning business operations. The last step is to create a balance sheet to review and analyze data. Based on your analysis, you can decide whether to go or not go ahead with the proposed statement.

Q3. Who Conducts a Feasibility Study?

Feasibility study is done by the senior management of the organization. Sometimes, they take help from mid-senior employees to complete the analysis in short span of time.

Q4. What Are the 5 Types of Feasibility?

The 5 types of feasibility study are Scheduling Feasibility, Operational Feasibility, Legal Feasibility, Economic Feasibility, and Technical Feasibility.

Q5. Why is a Feasibility Study Important?

A feasibility study helps in identifying the financial, market and logistical challenges of a proposed project. It is done by evaluating the estimated funds for the project and return of investment.

Q6. When is the Feasibility Study Done?

The feasibility study is done before the business plan is created.

Q7. What is the Primary Purpose of Conducting a Feasibility Analysis?

The objective of feasibility study is to assess the financial viability of developed plan and whether it will be successful or not.

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Why you must have Feasibility report Before Starting a business

Posted on August 09, 2015 by Prakash Bhosale, One of Thousands of Entrepreneurship Coaches on Noomii.

A feasibility project report study is an evaluation and analysis of the potential of the proposed project .

1. A feasibility study will help you to determine the profitability of the business venture. Before starting a business, seasoned entrepreneurs and investors would want to know if the business would be worth their time, effort and resources. It is worthwhile to know that many entrepreneurs have abandoned solid business ideas because the profitability could not be ascertained on conducting a feasibility study on the business idea. 2. A feasibility study will help prove to the entrepreneur, venture capitalists, lenders and investors the existence of the market, the liquidity of the business venture and the expected return on investment. 3. A feasibility study will help you identify the flaws, business challenges, strengths, weaknesses, opportunities, threats and unforeseen circumstances that might affect the success and sustainability of the business venture. Just like the case of my dad’s business, the business failure and loss of money would have been avoided if we had carried out a feasibility study. We simply jumped in based on someone’s recommendations because we were flushed with cash and we paid dearly for it. 4. Before starting a business, a feasibility study will enable you estimate the financial, human and technological resources that will be needed to ensure the successful launching of the business. Feasibility study helps to reveal the number and level of skill or unskilled workers to be employed and their salary scale. 5. Feasibility study will help you to determine the amount of capital required to start the business. It will also help you in establishing the budget plan, working capital and cash flow projections of the business. Project report may have following information. 1. Description of the project. Introduction, Uses and Applications, Properties, Market Survey with future aspects, Present Manufacturers, industry profile. 2. Promoters, Management, man power – tech & non tech, proposed management arrangements, Description of technical arrangements (management, production, marketing, finance etc.). 3. Marketing: Basic market orientation: local, national, regional, or export/import. Projected service volumes, unit prices, sales objectives, and market share of proposed venture. 4. Production of project: – Technical feasibility, manpower, raw material resources, and environment: Brief description of project process. Comments on special technical complexities and need for know-how and special skills. 5. Finance: – Investment requirements, project financing, and returns, Estimate of total project cost, miscellaneous fixed assets, preliminary and preoperative expenses and working capital. Proposed financial structure of venture, indicating expected sources and terms of equity and debt financing. Critical factors determining profitability. Cash Flow Statement, Repayment Schedule, Interest Chart, Depreciation Chart, Projected Balance Sheet for 3/5 Years 6. Time table for project preparation and completion. 7. Guidelines, suggestions on marketing & marketing collateral and tools development. More about feasibility study report:- A feasibility project report study is an evaluation and analysis of the potential of the proposed project which is based on extensive investigation and research to support the process of decision making. Feasibility studies aim to objectively and rationally uncover the strengths and weaknesses of an existing business or proposed venture, opportunities and threats present in the environment, the resources required to carry through, and ultimately the prospects for success. In its simplest terms, the two criteria to judge feasibility are cost required and value to be attained. As such, a well-designed feasibility study should provide a historical background of the business or project, description of the product or service, accounting statements, details of the operations and management, marketing research and policies, financial data, legal requirements and tax obligations. Generally, feasibility studies precede technical development and project implementation. Objective of feasibility project report study: A feasibility study evaluates the project’s potential for success; therefore, the perceived objectivity is an important factor in the credibility to be placed on the study by potential investors and lending institutions.[citation needed] It must therefore be conducted with an objective, unbiased approach to provide information upon which decisions can be based. Few common factors of feasibility project report study Technology and system feasibility:- The assessment is based on an outline design of system requirements, to determine whether the company has the technical expertise to handle completion of the project. When writing a feasibility report, the following should be taken to consideration: A brief description of the business to assess more possible factor/s which could affect the study The part of the business being examined The human and economic factor The possible solutions to the problems At this level, the concern is whether the proposal is both technically and legally feasible (assuming moderate cost). Legal Feasibility:- Determines whether the proposed system conflicts with legal requirements. Operational Feasibility:- Operational feasibility is a measure of how well a proposed system solves the problems, and takes advantage of the opportunities identified during scope definition and how it satisfies the requirements identified in the requirements analysis phase of system development. The operational feasibility assessment focuses on the degree to which the proposed development projects fits in with the existing business environment and objectives with regard to development schedule, delivery date, corporate culture, and existing business processes. Economic Feasibility:- The purpose of the economic feasibility assessment is to determine the positive economic benefits to the organization that the proposed system will provide. It includes quantification and identification of all the benefits expected. This assessment typically involves a cost/ benefits analysis. Technical Feasibility:- The technical feasibility assessment is focused on gaining an understanding of the present technical resources of the organization and their applicability to the expected needs of the proposed system. It is an evaluation of the hardware and software and how it meets the need of the proposed system. Schedule Feasibility:- A project will fail if it takes too long to be completed before it is useful. Typically this means estimating how long the system will take to develop, and if it can be completed in a given time period using some methods like payback period. Schedule feasibility is a measure of how reasonable the project timetable is. Given our technical expertise, are the project deadlines reasonable? Some projects are initiated with specific deadlines. You need to determine whether the deadlines are mandatory or desirable. Other feasibility factors:- Market Size feasibility: Market feasibility studies typically involve study geographic locations Total Market size with other players business analysis . The project feasibility is estimated and the project scope is defined: Risks and benefits are identified: The project structure is elaborated: Cultural feasibility In this stage, the project’s alternatives are evaluated for their impact on the local and general culture. For example, environmental factors need to be considered and these factors are to be well known. Further an enterprise’s own culture can clash with the results of the project. Financial feasibility In case of a new project, financial viability can be judged on the following parameters:Total estimated cost of the project. Financing of the project in terms of its capital structure, debt equity ratio and promoter’s share of total cost. Existing investment by the promoter in any other business. Projected cash flow and profitability. The financial viability of a project should provide the following information. Full details of the assets to be financed and how liquid those assets are. Rate of conversion to cash-liquidity (i.e. how easily can the various assets be converted to cash?). Project’s funding potential and repayment terms. Sensitivity in the repayments capability to the following factors: • Time delays. • Mild slowing of sales. • Acute reduction/slowing of sales. • Small increase in cost. • Large increase in cost. • Adverse economic conditions. Market research study and analysis. This is one of the most important sections of the feasibility study as it examines the marketability of the product or services and convinces readers that there is a potential market for the product or services. If a significant market for the product or services cannot be established, then there is no project. Typically, market studies will assess the potential sales of the product, absorption and market capture rates and the project’s timing. TENTATIVE POINTS OF FEASIBILITY REPORT (CAN BE CHANGED ) Objectives of the report Mission Keys to Success Industry Profile Company Summary Company Ownership Start-up Summary Start-up Requirements Start-up Funding Locations and Facilities Services Competitive Comparison Service Description Macro-environment Sales & Marketing Fulfillment Technology Future Services Market Analysis Market Segmentation Target Market Segment Strategy Market Needs Market Trends Service Business Analysis Distributing a Service Competition and Market potential analysis Study & analysis of Competitors Strategy and Implementation SWOT Analysis Strengths Weaknesses Opportunities Threats Marketing Strategy Pricing Strategy Promotion Strategy Positioning Statement Sales Strategy Sales Forecast Strategic Alliances Management Profile Organizational Structure Management Team Personnel Plan Financial Plan Key Financial Indicators Projected Profit and Loss Projected Cash Flow Projected Balance Sheet Controls Tracking Focus Market segment focus Customer Focus Appendices Team; – Guide & mentor, research & analysts, data collection, drafter, graphics creator, proof reader. Per report: – 250 to 600 pages word document, with basic graphical presentations. It will include scope of work of CA, production engineer /architect /astrologer etc.

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The Importance of Business Feasibility Study for a New Business Project

June 16, 2021.

The success or failure of any business model is highly dependent on analyzing the key determinants that either go to make or break the conversion of the commercial proposition. Assessing the viability of new business establishment or arrangement followed by market evaluation requires systematic & comprehensive efforts. Therefore, feasibility analysis in entrepreneurship, and the importance of business feasibility study, in particular, cannot be overstated.

Why 'business feasibility study’ is important for a new business plan

Essentially, a business feasibility study assesses business opportunities against the risks from uncertainty attached to them by thorough in-depth research. It is a critical imperative for mitigating the risks of uncertainty and strategically plan for them. A feasibility study and business plan go hand in hand. The eventual goal of a Business Feasibility Study is to not only protect the investment but also maximize its returns.

Uncertainty has always been a big challenge for new business ventures at the best of times. Now in the post-COVID-19 era and considering the probability of upcoming waves, assessing business feasibility is more challenging than ever. Problems such as estimating demand, evaluating supply chain logistics, assessing costs, and accessing financing are age-old.

The pandemic has added to that list: change in customer attitudes, habits and buying behaviour, disrupted supply chains, and so on. Most important perhaps is the uncertainty about how long it will last and which of its changes are long and which short term.

Considering the thus increased importance of Business Feasibility Study , MBG Corporate Services has a best-in-class Market Evaluation offering for new businesses. It is designed by the best minds in the business to ensure the best Business Feasibility Advisory for your Go/No Go decision using their expertise and experience.

Following is the suite of feasibility services offered by MBG:

MARKET FEASIBILITY STUDY

Key Overview Insights : Potential investment candidate options including profiles, group company structure and product specifications
Customer and Competitor Analysis: Competitive analysis of major customers to analyze the potential product growth within the industry
SWOT Analysis: Influencing factors, market drivers, market opportunities and challenges
PESTLE Analysis: Political, economic, social, technological, legal, and environmental factors
Opportunity Assessment: Potential opportunities to address and meet requirements

PARTNER / IMPORTER / DISTRIBUTOR SEARCH

Size operational requirement : Finalize Partners / Importers / Distributors universe- size, operational requirements, other parameters with geo preferences across identified region
Develop a long list: Based on thorough market research detailing with company and management profiles of possibly interested local market players
Shortlisting process : Based on various evaluation criteria like company size, financial strength, cultural fit, strategic fit, etc.
List delivery: Final recommended shortlist delivered within agreed timelines

MERGERS & ACQUISITION AND JOINT VENTURE SUPPORT

Enhanced Due Diligence : Analysis of target company and management, red-flagging concerns
Financial Due Diligence: Assessing issues faced by the business and drivers of sustainable profits and cash flows, financial risks identification
Operational Due Diligence: Operational review of target, assessing business plan vis-a-vis operational facilities, analyzing potential for additional value through improvements
Business Valuation: Based on thorough understanding of internal factors, including both financial and nonfinancial data, and external factors affecting the business
Post-Merger Integration: The final and critical step of the Merger & Acquisition transaction

LEGAL STRUCTURE CREATION

Establishing the entire structure : including Company, Liaison, Branch and Project offices as well as manufacturing / other production set up

Contact us to learn more about how we help you with a final decision with our Feasibility Study and Business Plan Support and make your new business a success.

Our Service Deck: Business Feasibility Study

You can check out video here :- Business Feasibility Study COVID-19 Advisory

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Financial Due-Diligence: An Essential and Critical Process

August 03, 2022

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August 26, 2021

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The importance of a business plan

Business plans are like road maps: it’s possible to travel without one, but that will only increase the odds of getting lost along the way.

Owners with a business plan see growth 30% faster than those without one, and 71% of the fast-growing companies have business plans . Before we get into the thick of it, let’s define and go over what a business plan actually is.

What is a business plan?

A business plan is a 15-20 page document that outlines how you will achieve your business objectives and includes information about your product, marketing strategies, and finances. You should create one when you’re starting a new business and keep updating it as your business grows.

Rather than putting yourself in a position where you may have to stop and ask for directions or even circle back and start over, small business owners often use business plans to help guide them. That’s because they help them see the bigger picture, plan ahead, make important decisions, and improve the overall likelihood of success. ‍

Why is a business plan important?

A well-written business plan is an important tool because it gives entrepreneurs and small business owners, as well as their employees, the ability to lay out their goals and track their progress as their business begins to grow. Business planning should be the first thing done when starting a new business. Business plans are also important for attracting investors so they can determine if your business is on the right path and worth putting money into.

Business plans typically include detailed information that can help improve your business’s chances of success, like:

A market analysis : gathering information about factors and conditions that affect your industry
Competitive analysis : evaluating the strengths and weaknesses of your competitors
Customer segmentation : divide your customers into different groups based on specific characteristics to improve your marketing
Marketing: using your research to advertise your business
Logistics and operations plans : planning and executing the most efficient production process
Cash flow projection : being prepared for how much money is going into and out of your business
An overall path to long-term growth

What is the purpose of a business plan?

A business plan is like a map for small business owners, showing them where to go and how to get there. Its main purposes are to help you avoid risks, keep everyone on the same page, plan finances, check if your business idea is good, make operations smoother, and adapt to changes. It's a way for small business owners to plan, communicate, and stay on track toward their goals.

10 reasons why you need a business plan

I know what you’re thinking: “Do I really need a business plan? It sounds like a lot of work, plus I heard they’re outdated and I like figuring things out as I go...”.

The answer is: yes, you really do need a business plan! As entrepreneur Kevin J. Donaldson said, “Going into business without a business plan is like going on a mountain trek without a map or GPS support—you’ll eventually get lost and starve! Though it may sound tedious and time-consuming, business plans are critical to starting your business and setting yourself up for success.

To outline the importance of business plans and make the process sound less daunting, here are 10 reasons why you need one for your small business.

1. To help you with critical decisions

The primary importance of a business plan is that they help you make better decisions. Entrepreneurship is often an endless exercise in decision making and crisis management. Sitting down and considering all the ramifications of any given decision is a luxury that small businesses can’t always afford. That’s where a business plan comes in.

Building a business plan allows you to determine the answer to some of the most critical business decisions ahead of time.

Creating a robust business plan is a forcing function—you have to sit down and think about major components of your business before you get started, like your marketing strategy and what products you’ll sell. You answer many tough questions before they arise. And thinking deeply about your core strategies can also help you understand how those decisions will impact your broader strategy.

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2. To iron out the kinks

Putting together a business plan requires entrepreneurs to ask themselves a lot of hard questions and take the time to come up with well-researched and insightful answers. Even if the document itself were to disappear as soon as it’s completed, the practice of writing it helps to articulate your vision in realistic terms and better determine if there are any gaps in your strategy.

3. To avoid the big mistakes

Only about half of small businesses are still around to celebrate their fifth birthday . While there are many reasons why small businesses fail, many of the most common are purposefully addressed in business plans.

According to data from CB Insights , some of the most common reasons businesses fail include:

No market need : No one wants what you’re selling.
Lack of capital : Cash flow issues or businesses simply run out of money.
Inadequate team : This underscores the importance of hiring the right people to help you run your business.
Stiff competition : It’s tough to generate a steady profit when you have a lot of competitors in your space.
Pricing : Some entrepreneurs price their products or services too high or too low—both scenarios can be a recipe for disaster.

The exercise of creating a business plan can help you avoid these major mistakes. Whether it’s cash flow forecasts or a product-market fit analysis , every piece of a business plan can help spot some of those potentially critical mistakes before they arise. For example, don’t be afraid to scrap an idea you really loved if it turns out there’s no market need. Be honest with yourself!

Get a jumpstart on your business plan by creating your own cash flow projection .

4. To prove the viability of the business

Many businesses are created out of passion, and while passion can be a great motivator, it’s not a great proof point.

Planning out exactly how you’re going to turn that vision into a successful business is perhaps the most important step between concept and reality. Business plans can help you confirm that your grand idea makes sound business sense.

A graphic showing you a “Business Plan Outline.” There are four sections on the left side: Executive Summary at the top, Company Description below it, followed by Market Analysis, and lastly Organization and Management. There was four sections on the right side. At the top: “Service or Product Line.” Below that, “Marketing and Sales.” Below that, “Funding Request.” And lastly: “Financial Projections.” At the very bottom below the left and right columns is a section that says “Appendix.

A critical component of your business plan is the market research section. Market research can offer deep insight into your customers, your competitors, and your chosen industry. Not only can it enlighten entrepreneurs who are starting up a new business, but it can also better inform existing businesses on activities like marketing, advertising, and releasing new products or services.

Want to prove there’s a market gap? Here’s how you can get started with market research.

5. To set better objectives and benchmarks

Without a business plan, objectives often become arbitrary, without much rhyme or reason behind them. Having a business plan can help make those benchmarks more intentional and consequential. They can also help keep you accountable to your long-term vision and strategy, and gain insights into how your strategy is (or isn’t) coming together over time.

6. To communicate objectives and benchmarks

Whether you’re managing a team of 100 or a team of two, you can’t always be there to make every decision yourself. Think of the business plan like a substitute teacher, ready to answer questions any time there’s an absence. Let your staff know that when in doubt, they can always consult the business plan to understand the next steps in the event that they can’t get an answer from you directly.

Sharing your business plan with team members also helps ensure that all members are aligned with what you’re doing, why, and share the same understanding of long-term objectives.

7. To provide a guide for service providers

Small businesses typically employ contractors , freelancers, and other professionals to help them with tasks like accounting , marketing, legal assistance, and as consultants. Having a business plan in place allows you to easily share relevant sections with those you rely on to support the organization, while ensuring everyone is on the same page.

8. To secure financing

Did you know you’re 2.5x more likely to get funded if you have a business plan?If you’re planning on pitching to venture capitalists, borrowing from a bank, or are considering selling your company in the future, you’re likely going to need a business plan. After all, anyone that’s interested in putting money into your company is going to want to know it’s in good hands and that it’s viable in the long run. Business plans are the most effective ways of proving that and are typically a requirement for anyone seeking outside financing.

Learn what you need to get a small business loan.

9. To better understand the broader landscape

No business is an island, and while you might have a strong handle on everything happening under your own roof, it’s equally important to understand the market terrain as well. Writing a business plan can go a long way in helping you better understand your competition and the market you’re operating in more broadly, illuminate consumer trends and preferences, potential disruptions and other insights that aren’t always plainly visible.

10. To reduce risk

Entrepreneurship is a risky business, but that risk becomes significantly more manageable once tested against a well-crafted business plan. Drawing up revenue and expense projections, devising logistics and operational plans, and understanding the market and competitive landscape can all help reduce the risk factor from an inherently precarious way to make a living. Having a business plan allows you to leave less up to chance, make better decisions, and enjoy the clearest possible view of the future of your company.

Business plan FAQs

How does having a business plan help small business owners make better decisions.

Having a business plan supports small business owners in making smarter decisions by providing a structured framework to assess all parts of their businesses. It helps you foresee potential challenges, identify opportunities, and set clear objectives. Business plans help you make decisions across the board, including market strategies, financial management, resource allocation, and growth planning.

What industry-specific issues can business plans help tackle?

Business plans can address industry-specific challenges like regulatory compliance, technological advancements, market trends, and competitive landscape. For instance, in highly regulated industries like healthcare or finance, a comprehensive business plan can outline compliance measures and risk management strategies.

How can small business owners use their business plans to pitch investors or apply for loans?

In addition to attracting investors and securing financing, small business owners can leverage their business plans during pitches or loan applications by focusing on key elements that resonate with potential stakeholders. This includes highlighting market analysis, competitive advantages, revenue projections, and scalability plans. Presenting a well-researched and data-driven business plan demonstrates credibility and makes investors or lenders feel confident about your business’s potential health and growth.

Understanding the importance of a business plan

Now that you have a solid grasp on the “why” behind business plans, you can confidently move forward with creating your own.

Remember that a business plan will grow and evolve along with your business, so it’s an important part of your whole journey—not just the beginning.

Now that you’ve read up on the purpose of a business plan, check out our guide to help you get started.

The information and tips shared on this blog are meant to be used as learning and personal development tools as you launch, run and grow your business. While a good place to start, these articles should not take the place of personalized advice from professionals. As our lawyers would say: “All content on Wave’s blog is intended for informational purposes only. It should not be considered legal or financial advice.” Additionally, Wave is the legal copyright holder of all materials on the blog, and others cannot re-use or publish it without our written consent.

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Feasibility study and business plan: Feasibility Study vs: Business
Before launching a new venture or expanding an existing one, entrepreneurs need to assess the viability and profitability of their ideas. This is where feasibility studies and business plans come in handy. These are two different but complementary tools that can help entrepreneurs make informed decisions and secure funding for their projects. However, many people confuse the two or use them ...
What Are Business Feasibility Studies and Why Are They Important?
A feasibility study is a detailed analysis that outlines the risk and return of pursuing a plan of action. In a transition, a feasibility study can allow you to determine how much risk a potential transition would entail. A transition feasibility study can also give you the information you need to better predict the likely success of a ...
Feasibility Study or Business Plan: Which Comes First for Entrepreneurs?
When starting a new business venture, entrepreneurs are often faced with the question of whether to conduct a feasibility study or create a business plan first. Learn more Accelerate Success ...
The Importance of a Feasibility Study
A feasibility study is an investigative tool that might cause you to discount an idea, whereas a business plan is call to action. You can, in fact, use a feasibility study as a predecessor to ...
11.3 Conducting a Feasibility Analysis
A feasibility study allows a business to address where and how it will operate, its competition, possible hurdles, and the funding needed to begin. The business plan then provides a framework that sets out a map for following through and executing on the entrepreneurial vision. Organizational Feasibility Analysis
Why Feasibility Studies Matter (With Examples)
That's why feasibility studies matter. Combine sales forecasting data with the insight from a feasibility report, and you'll be able to gauge the success rate of your proposed plan before you start. Other feasibility benefits include: Determining if the project is appropriate for your team. Making sound decisions for your team.
The Importance of a Feasibility Study in Business Planning
In conclusion, a feasibility study is an indispensable tool in business planning. It provides valuable insights into the potential risks, financial viability, technical requirements, and market conditions of a proposed business or project. By conducting a feasibility study, entrepreneurs can minimize risks, maximize profits, and ensure smooth ...
11.3: Conducting a Feasibility Analysis
Financial Feasibility Analysis. A financial analysis seeks to project revenue and expenses (forecasts come later in the full business plan); project a financial narrative; and estimate project costs, valuations, and cash flow projections Figure 11.13. Figure 11.3.2: An analysis of financial feasibility focuses on expenses, cash flow, and ...
How to conduct a feasibility study: Templates and examples
To conduct a feasibility study, hire a trained consultant or, if you have an in-house project management office (PMO), ask if they take on this type of work. In general, here are the steps they'll take to complete this work: 1. Run a preliminary analysis. Creating a feasibility study is a time-intensive process.
Feasibility study: definition, benefits and differences with a Business
Here are the key differences between a feasibility study and a business plan: Differences in Purpose. Feasibility Study: Feasibility studies are conducted in the early stages of project development or business planning. Their primary purpose is to determine whether a proposed project or business idea is viable and should be pursued.
Business Feasibility Study: Essential Steps and Strategies
Key Takeaways. Business Feasibility Study: An evaluation process to determine the viability of a business idea, covering market viability, financial feasibility, and operational capacity. Market Research: Investigates the target market, customer demand, competitive landscape, and market opportunities to validate the product or service demand.
The Importance of a Feasibility Study to an Entrepreneur
A feasibility study is an analysis of the potential success of a business plan. Many would-be business owners act hastily, following the excitement of an initial concept without giving it much thought. You've likely heard the adage, "Don't judge a book by its cover," before. The same logic applies when thinking about a company.
11 Steps to a Successful Feasibility Analysis
First Step: Ideation & Defining the scope of the project. Ideation is the "getting it all off the ground" stage of a feasibility analysis. It involves identifying the problem, what needs to be done, the solution, and how the company will succeed. For example, you might get an idea for a baby pacifier glove. You want to make these baby ...
Feasibility Studies: An Intro to Feasibility Analysis
A feasibility study is an analysis of the practicality of a project and its potential challenges that can be presented to investors or used as a guideline by entrepreneurs. It provides an outline of expectations for a successful project and guidelines for determining if a project is worth pursuing. Performing a feasibility study allows ...
Difference between Feasibility Study and Business Plan
Entrepreneurs face many challenges when creating a new venture. Although the business plan is one of the most well-known documents, the feasibility study may be just as important. Before the entrepreneur can seek funding, he or she must demonstrate that the idea is truly a good one. Rochester.edu explained that a feasibility study, "can […]
Feasibility Study: Importance, Types and Examples
Feasibility Study vs. Business Plan. When starting a business, you must create two very important documents: a feasibility study and a business plan. While they may seem similar, they are two different things with different purposes. A feasibility study is a preliminary document that assesses the feasibility of a proposed business.
Blueprint for Success: Why Every Entrepreneur Needs a Business Plan
In this article, we'll explore the importance of 3 key components that every entrepreneur should prioritize before embarking on a new venture: the business plan, due diligence, and feasibility ...
How To Conduct A Feasibility Study For Your Business
A feasibility study is conducted to enhance the decision-making process. If the study reveals that the business will yield the desired projected income and has the potential to scale over time, then move to the execution stage. If otherwise, it will be a bad business decision to go ahead with such a business idea.
The Importance Of A Feasibility Study to an Entrepreneur
The business plan is dependent on the feasibility study. A feasibility study also determines alternatives and solutions which may otherwise not have been known. Thus, it becomes critical to conduct this research before the commitment of business resources, time and money to a business idea that may not work as planned as this only leads to ...
Why you must have Feasibility report Before Starting a business
A feasibility project report study is an evaluation and analysis of the potential of the proposed project . 1. A feasibility study will help you to determine the profitability of the business venture. Before starting a business, seasoned entrepreneurs and investors would want to know if the business would be worth their time, effort and resources.
The importance of business feasibility study for a business
Why 'business feasibility study' is important for a new business plan. Essentially, a business feasibility study assesses business opportunities against the risks from uncertainty attached to them by thorough in-depth research. It is a critical imperative for mitigating the risks of uncertainty and strategically plan for them.
Why does Feasibility Study is Important for any Business
Published Aug 14, 2016. A feasibility study examines the practicability of a proposal, business venture or idea. The principal function of this is to determine if the project will continue or not ...
The Importance of a Business Plan for Entrepreneurs: 18 ...
A business plan is essential as an entrepreneur. It helps you set clear goals and guidelines for how you will manage your business. A business plan may also be needed to set employee goals, obtain funding or even to sell your business one day. In this article, we discuss the importance of a business plan for entrepreneurs, as well as a few main ...
The Importance of a Business Plan: 10 Reasons You Need a Road Map For
Business plans are like road maps: it's possible to travel without one, but that will only increase the odds of getting lost along the way. Owners with a business plan see growth 30% faster than those without one, and 71% of the fast-growing companies have business plans.Before we get into the thick of it, let's define and go over what a business plan actually is.

Feasibility study and business plan: Feasibility Study vs: Business Plan: Understanding the Difference

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