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Production Plan in Business Plan: A Comprehensive Guide to Success

Last Updated:

August 22, 2024

Production Plan in Business Plan: A Comprehensive Guide to Succes

In any business venture, a solid production plan is crucial for success. A production plan serves as a roadmap that outlines the steps, resources, and strategies required to manufacture products or deliver services efficiently. By carefully crafting a production plan within a business plan, entrepreneurs can ensure optimal utilisation of resources, timely delivery, cost efficiency, and customer satisfaction. In this article, we will delve into the intricacies of creating an effective production plan in a business plan , exploring its key components, strategies, and the importance of aligning it with overall business objectives .

Key Takeaways on Production Plans in Business Planning

A production plan : a detailed outline that guides efficient product manufacturing or service delivery.
Importance of a production plan : provides a roadmap for operations, optimises resource utilisation, and aligns with customer demand.
Key components : demand forecasting, capacity planning, inventory management, resource allocation, and quality assurance.
Strategies : lean manufacturing, JIT inventory, automation and technology integration, supplier relationship management, and continuous improvement.
Benefits of a well-executed production plan : improved efficiency, reduced costs, enhanced product quality, and increased profitability.

What is a Production Plan?

A production Seamless Searches plan is a detailed outline that specifies the processes, resources, timelines, and strategies required to convert raw materials into finished goods or deliver services. It serves as a blueprint for the entire production cycle, guiding decision-making and resource allocation. The production plan considers factors such as demand forecasting, capacity planning, inventory management, and quality assurance to ensure efficient operations and optimal customer satisfaction.

Why is a Production Plan Important in a Business Plan?

The inclusion of a production plan in a business plan is vital for several reasons. First and foremost, it provides a clear roadmap for business operations, helping entrepreneurs and managers make informed decisions related to production processes. A well-developed production plan ensures that resources are utilised efficiently, minimising wastage and optimising productivity. This is particularly important for any startup platform aiming to streamline its production processes and achieve sustainable growth.

Additionally, a production plan allows businesses to align their production capabilities with customer demand. By forecasting market trends and analysing customer needs, businesses can develop a production plan that caters to current and future demands, thus avoiding overstocking or understocking situations. For those interested in property development, understanding the dynamics of the real estate market can provide valuable insights into aligning production capabilities with demand, ensuring successful projects and investments.

Furthermore, a production plan helps businesses enhance their competitive advantage. By implementing strategies such as lean manufacturing and invoice automation , companies can streamline their production processes, reduce costs, improve product quality, and ultimately outperform competitors.

Key Components of a Production Plan

To create an effective production plan, it is crucial to consider several key components. These components work together to ensure efficient operations and successful fulfilment of customer demands. Let's explore each component in detail.

Demand Forecasting

Demand forecasting is a critical aspect of production planning. By analysing historical data, market trends, and customer behaviour, businesses can predict future demand for their products or services. Accurate demand forecasting allows companies to optimise inventory levels, plan production capacity, and ensure timely delivery to customers.

One approach to demand forecasting is quantitative analysis, which involves analysing historical sales data to identify patterns and make predictions. Another approach is qualitative analysis, which incorporates market research, customer surveys, and expert opinions to gauge demand fluctuations. By combining both methods, businesses can develop a robust demand forecast, minimising the risk of underproduction or overproduction. Utilising a free notion template for demand forecasting can further streamline this process, allowing businesses to organise and analyse both quantitative and qualitative data efficiently in one centralised location.

Capacity Planning

Capacity planning involves determining the optimal production capacity required to meet projected demand. This includes assessing the production capabilities of existing resources, such as machinery, equipment, and labour, and identifying any gaps that need to be addressed. By conducting a thorough capacity analysis, businesses can ensure that their production capacity aligns with customer demand, avoiding bottlenecks or excess capacity.

An effective capacity plan takes into account factors such as production cycle times, labour availability, equipment maintenance, and production lead times. It helps businesses allocate resources efficiently, minimise production delays, and maintain a consistent level of output to meet customer expectations.

Inventory Management

Efficient inventory management is crucial for a successful production plan. It involves balancing the cost of holding inventory with the risk of stockouts. By maintaining optimal inventory levels, businesses can reduce carrying costs while ensuring that sufficient stock is available to fulfil customer orders.

Inventory management techniques, such as the Economic Order Quantity (EOQ) model and Just-in-Time (JIT) inventory system, help businesses strike the right balance between inventory investment and customer demand. These methods consider factors such as order frequency, lead time, and carrying costs to optimise inventory levels and minimise the risk of excess or insufficient stock.

Resource Allocation

Resource allocation plays a pivotal role in a production plan. It involves assigning available resources, such as labour, materials, and equipment, to specific production tasks or projects. Effective resource allocation ensures that resources are utilised optimally, avoiding underutilisation or over-utilisation.

To allocate resources efficiently, businesses must consider factors such as skill requirements, resource availability, project timelines, and cost constraints. By conducting a thorough resource analysis and implementing resource allocation strategies, businesses can streamline production processes, minimise bottlenecks, and maximise productivity .

Quality Assurance

Maintaining high-quality standards is essential for any production plan. Quality assurance involves implementing measures to monitor and control the quality of products or services throughout the production process. By adhering to quality standards and conducting regular inspections, businesses can minimise defects, ensure customer satisfaction, and build a positive brand reputation.

Quality assurance techniques, such as Total Quality Management (TQM) and Six Sigma , help businesses identify and rectify any quality-related issues. These methodologies involve continuous monitoring, process improvement, and employee training to enhance product quality and overall operational efficiency.

In addition to the core components of a production plan, it's also important for businesses to consider the broader aspects of their business strategy, including marketing and advertising. Understanding the costs and returns of different marketing approaches is crucial for comprehensive business planning . For instance, direct response advertising costs can vary significantly, but they offer the advantage of measurable responses from potential customers. This type of advertising can be a valuable strategy for businesses looking to directly engage with their target audience and track the effectiveness of their marketing efforts.

Strategies for Developing an Effective Production Plan

Developing an effective production plan requires implementing various strategies and best practices. By incorporating these strategies into the production planning process, businesses can optimise operations and drive success. Let's explore some key strategies in detail.

Lean Manufacturing

Lean manufacturing is a systematic Seamless Searches approach aimed at eliminating waste and improving efficiency in production processes. It emphasises the concept of continuous improvement and focuses on creating value for the customer while minimising non-value-added activities.

By adopting lean manufacturing principles, such as just-in-time production, standardised work processes, and visual management, businesses can streamline operations, reduce lead times, and eliminate unnecessary costs. Lean manufacturing not only improves productivity but also enhances product quality and customer satisfaction.

Just-in-Time (JIT) Inventory

Just-in-Time (JIT) inventory is a strategy that aims to minimise inventory levels by receiving goods or materials just when they are needed for production. This strategy eliminates the need for excess inventory storage, reducing carrying costs and the risk of obsolete inventory.

By implementing a JIT inventory system, businesses can optimise cash flow, reduce storage space requirements, and improve overall supply chain efficiency. However, it requires robust coordination with suppliers, accurate demand forecasting, and efficient logistics management to ensure timely delivery of materials.

Automation and Technology Integration

Automation and technology integration play a crucial role in modern production planning, as well as mobile app development . By leveraging technology, businesses can streamline processes, enhance productivity, and reduce human error. Automation can be implemented in various aspects of production, including material handling, assembly, testing, and quality control.

Continuous Improvement

Continuous improvement is a fundamental principle of effective production planning. It involves regularly evaluating production processes, identifying areas for improvement, and implementing changes to enhance efficiency and quality.

By fostering a culture of continuous improvement, businesses can drive innovation, optimise resource utilisation, and stay ahead of competitors. Techniques such as Kaizen, Six Sigma, and value stream mapping can help businesses identify inefficiencies, eliminate waste, and streamline production workflows.

Frequently Asked Questions (FAQs)

What is the role of a production plan in business planning.

A1: A production plan plays a crucial role in business planning by providing a roadmap for efficient production processes. It helps align production capabilities with customer demand, optimise resource utilisation, and ensure timely delivery of products or services.

How does a production plan affect overall business profitability?

A2: A well-developed production plan can significantly impact business profitability. By optimising production processes, reducing costs, and enhancing product quality, businesses can improve their profit margins and gain a competitive edge in the market.

What are the common challenges faced in production planning?

A3: Production planning can present various challenges, such as inaccurate demand forecasting, capacity constraints, supply chain disruptions, and quality control issues. Overcoming these challenges requires robust planning, effective communication, and the implementation of appropriate strategies and technologies.

What is the difference between short-term and long-term production planning?

A4: Short-term production planning focuses on immediate production requirements, such as daily or weekly schedules. Long-term production planning, on the other hand, involves strategic decisions related to capacity expansion, technology investments, and market expansion, spanning months or even years.

How can a production plan be adjusted to accommodate changes in demand?

A5: To accommodate changes in demand, businesses can adopt flexible production strategies such as agile manufacturing or dynamic scheduling. These approaches allow for quick adjustments to production levels, resource allocation, and inventory management based on fluctuating customer demand.

In conclusion, a well-crafted production plan is essential for business success. By incorporating a production plan into a comprehensive business plan, entrepreneurs can optimise resource utilisation, meet customer demands, enhance product quality, and drive profitability. Through effective demand forecasting, capacity planning, inventory management, resource allocation, and quality assurance, businesses can streamline production processes and gain a competitive edge in the market.

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How to conduct a feasibility study: Template and examples

Editor’s note : This article was last updated on 27 August 2024 to bolster the step-by-step guide with more detailed instructions, more robust examples, and a downloadable, customizable template.

How To Conduct A Feasibility Study: Comprehensive Guide With Template And Examples

Opportunities are everywhere. Some opportunities are small and don’t require many resources. Others are massive and need further analysis and evaluation.

One of your key responsibilities as a product manager is to evaluate the potential success of those opportunities before investing significant money, time, and resources. A feasibility study, also known as a feasibility assessment or feasibility analysis, is a critical tool that can help product managers determine whether a product idea or opportunity is viable, feasible, and profitable.

So, what is a feasibility analysis? Why should product managers use it? And how do you conduct one?

Click here to download our customizable feasibility study template .

What is a feasibility study?

A feasibility study is a systematic analysis and evaluation of a product opportunity’s potential to succeed. It aims to determine whether a proposed opportunity is financially and technically viable, operationally feasible, and commercially profitable.

A feasibility study typically includes an assessment of a wide range of factors, including the technical requirements of the product, resources needed to develop and launch the product, the potential market gap and demand, the competitive landscape, and economic and financial viability. These factors can be broken down into different types of feasibility studies:

Technical feasibility — Evaluates the technical resources and expertise needed to develop the product and identifies any technical challenges that could arise
Financial feasibility — Analyzes the costs involved, potential revenue, and overall financial viability of the opportunity
Market feasibility — Assesses the demand for the product, market trends, target audience, and competitive landscape
Operational feasibility — Looks at the organizational structure, logistics, and day-to-day operations required to launch and sustain the product
Legal feasibility — Examines any legal considerations, including regulations, patents, and compliance requirements that could affect the opportunity

Based on the analysis’s findings, the product manager and their product team can decide whether to proceed with the product opportunity, modify its scope, or pursue another opportunity and solve a different problem.

Conducting a feasibility study helps PMs ensure that resources are invested in opportunities that have a high likelihood of success and align with the overall objectives and goals of the product strategy .

What are feasibility analyses used for?

Feasibility studies are particularly useful when introducing entirely new products or verticals. Product managers can use the results of a feasibility study to:

Assess the technical feasibility of a product opportunity — Evaluate whether the proposed product idea or opportunity can be developed with the available technology, tools, resources, and expertise
Determine a project’s financial viability — By analyzing the costs of development, manufacturing, and distribution, a feasibility study helps you determine whether your product is financially viable and can generate a positive return on investment (ROI)
Evaluate customer demand and the competitive landscape — Assessing the potential market size, target audience, and competitive landscape for the product opportunity can inform decisions about the overall product positioning, marketing strategies, and pricing
Identify potential risks and challenges — Identify potential obstacles or challenges that could impact the success of the identified opportunity, such as regulatory hurdles, operational and legal issues, and technical limitations
Refine the product concept — The insights gained from a feasibility study can help you refine the product’s concept, make necessary modifications to the scope, and ultimately create a better product that is more likely to succeed in the market and meet users’ expectations

How to conduct a feasibility study

The activities involved in conducting a feasibility study differ from one organization to another. Also, the threshold, expectations, and deliverables change from role to role. However, a general set of guidelines can help you get started.

Here are some basic steps to conduct and report a feasibility study for major product opportunities or features:

1. Clearly define the opportunity

Imagine your user base is facing a significant problem that your product doesn’t solve. This is an opportunity. Define the opportunity clearly, support it with data, talk to your stakeholders to understand the opportunity space, and use it to define the objective.

2. Define the objective and scope

Each opportunity should be coupled with a business objective and should align with your product strategy.

Determine and clearly communicate the business goals and objectives of the opportunity. Align those objectives with company leaders to make sure everyone is on the same page. Lastly, define the scope of what you plan to build.

3. Conduct market and user research

Now that you have everyone on the same page and the objective and scope of the opportunity clearly defined, gather data and insights on the target market.

Include elements like the total addressable market (TAM) , growth potential, competitors’ insights, and deep insight into users’ problems and preferences collected through techniques like interviews, surveys, observation studies, contextual inquiries, and focus groups.

4. Analyze technical feasibility

Suppose your market and user research have validated the problem you are trying to solve. The next step should be to, alongside your engineers, assess the technical resources and expertise needed to launch the product to the market.

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Dig deeper into the proposed solution and try to comprehend the technical limitations and estimated time required for the product to be in your users’ hands. A detailed assessment might include:

Technical requirements — What technology stack is needed? Does your team have the necessary expertise? Are there any integration challenges?
Development timeline — How long will it take to develop the solution? What are the critical milestones?
Resource allocation — What resources (hardware, software, personnel) are required? Can existing resources be repurposed?

5. Assess financial viability

If your company has a product pricing team, work closely with them to determine the willingness to pay (WTP) and devise a monetization strategy for the new feature.

Conduct a comprehensive financial analysis, including the total cost of development, revenue streams, and the expected return on investment (ROI) based on the agreed-upon monetization strategy. Key elements to include:

Cost analysis — Breakdown of development, production, and operational costs
Revenue projections — Estimated revenue from different pricing models
ROI calculation — Expected return on investment and payback period

6. Evaluate potential risks

Now that you have almost a complete picture, identify the risks associated with building and launching the opportunity. Risks may include things like regulatory hurdles, technical limitations, and any operational risks.

A thorough risk assessment should cover:

Technical risks — Potential issues with technology, integration, or scalability.
Market risks — Changes in market conditions, customer preferences, or competitive landscape.
Operational risks — Challenges in logistics, staffing, or supply chain management.
Regulatory risks — Legal or compliance issues that could affect the product’s launch. For more on regulatory risks, check out this Investopedia article .

7. Decide, prepare, and share

Based on the steps above, you should end up with a comprehensive report that helps you decide whether to pursue the opportunity, modify its scope, or explore alternative options. Here’s what you should do next:

Prepare your report — Compile all your findings, including the feasibility analysis, market research, technical assessment, financial viability, and risk analysis into a detailed report. This document should provide a clear recommendation on whether to move forward with the project
Create an executive summary — Summarize the key findings and recommendations in a concise executive summary , tailored for stakeholders such as the C-suite. The executive summary should capture the essence of your report, focusing on the most critical points
Present to stakeholders — Share your report with stakeholders, ensuring you’re prepared to discuss the analysis and defend your recommendations. Make sure to involve key stakeholders early in the process to build buy-in and address any concerns they may have
Prepare for next steps — Depending on the decision, be ready to either proceed with the project, implement modifications, or pivot to another opportunity. Outline the action plan, resource requirements, and timeline for the next phase

Feasibility study template

The following feasibility study report template is designed to help you evaluate the feasibility of a product opportunity and provide a comprehensive report to inform decision-making and guide the development process.

Note: You can customize this template to fit your specific needs. Click here to download and customize this feasibility study report template .

Feasibility study example

Imagine you’re a product manager at a company that specializes in project management tools. Your team has identified a potential opportunity to expand the product offering by developing a new AI-powered feature that can automatically prioritize tasks for users based on their deadlines, workload, and importance.

A feasibility study can help you assess the viability of this opportunity. Here’s how you might approach it according to the template above:

Opportunity description — The opportunity lies in creating an AI-powered feature that automatically prioritizes tasks based on user-defined parameters such as deadlines, workload, and task importance. This feature is expected to enhance user productivity by helping teams focus on high-priority tasks and ensuring timely project completion
Problem statement — Many users of project management tools struggle with managing and prioritizing tasks effectively, leading to missed deadlines and project delays. Current solutions often require manual input or lack sophisticated algorithms to adjust priorities dynamically. The proposed AI-powered feature aims to solve this problem by automating the prioritization process, thereby reducing manual effort and improving overall project efficiency
Business objective — The primary objective is to increase user engagement and satisfaction by offering a feature that addresses a common pain point. The feature is also intended to increase customer retention by providing added value and driving user adoption
Scope — The scope includes the development of an AI algorithm capable of analyzing task parameters (e.g., deadlines, workload) and dynamically prioritizing tasks. The feature will be integrated into the existing project management tool interface, with minimal disruption to current users. Additionally, the scope covers user training and support for the new feature

Market analysis:

Total addressable market (TAM) — The TAM for this feature includes all users who actively manage projects and could benefit from enhanced task prioritization
Competitor analysis — Competitor products such as Asana and Trello offer basic task prioritization features, but none use advanced AI algorithms. This presents a unique opportunity to differentiate this product by offering a more sophisticated solution
User pain points — Surveys and interviews with current users reveal that 65 percent struggle with manual task prioritization, leading to inefficiencies and missed deadlines. Users expressed a strong interest in an automated solution that could save time and improve project outcomes

Technical requirements:

AI algorithm development — The core of the feature is an AI algorithm that can analyze multiple factors to prioritize tasks. This requires expertise in machine learning, data processing, and AI integration
Integration with existing infrastructure — The feature must seamlessly integrate with the existing architecture without causing significant disruptions. This includes data compatibility, API development, and UI/UX considerations
Data handling and privacy — The feature will process sensitive project data, so robust data privacy and security measures must be implemented to comply with regulations like GDPR

Development timeline:

Phase 1 (3 months) — Research and development of the AI algorithm, including training with sample datasets
Phase 2 (2 months) — Integration with the platform, including UI/UX design adjustments
Phase 3 (1 month) — Testing, quality assurance, and bug fixing
Phase 4 (1 month) — User training materials and documentation preparation

Resource allocation:

Development team — Two AI specialists, three backend developers, two frontend developers, one project manager
Hardware/software — Additional cloud computing resources for AI processing, development tools for machine learning, testing environments

Cost analysis:

Development costs — Estimated at $300,000, including salaries, cloud computing resources, and software licenses
Marketing and launch costs — $50,000 for promotional activities, user onboarding, and initial support
Operational costs — $20,000/year for maintenance, AI model updates, and ongoing support

Revenue projections:

Pricing model — The AI-powered feature will be offered as part of a premium subscription tier, with an additional monthly fee of $10/user
User adoption — Based on user surveys, an estimated 25 percent of the current user base (10,000 users) is expected to upgrade to the premium tier within the first year
Projected revenue — First-year revenue is projected at $1.2 million, with an expected growth rate of 10 percent annually

ROI calculation:

Break-even point — The project is expected to break even within 6 months of launch
Five-year ROI — The feature is projected to generate a 200% ROI over five years, driven by increased subscription fees and user retention

Technical risks:

AI algorithm complexity — Developing an accurate and reliable AI algorithm is challenging and may require multiple iterations
Integration issues — There is a risk that integrating the new feature could disrupt the existing platform, leading to user dissatisfaction

Market risks:

User adoption — There’s a risk that users may not perceive sufficient value in the AI feature to justify the additional cost, leading to lower-than-expected adoption rates

Operational risks:

Support and maintenance — Maintaining the AI feature requires continuous updates and monitoring, which could strain the development and support teams

Regulatory risks:

Data privacy compliance — Handling sensitive project data requires strict adherence to data privacy regulations. Noncompliance could lead to legal challenges and damage to the company’s reputation
Decision — Based on the comprehensive analysis, the recommendation is to proceed with the development and launch of the AI-powered task prioritization feature. The potential for increased user engagement, differentiation from competitors, and positive ROI justifies the investment
Prepare the report — A detailed report will be compiled, including all findings from the feasibility study, cost-benefit analysis, and risk assessments. This report will be presented to key stakeholders for approval
Create an executive summary — A concise executive summary will be prepared for the C-suite, highlighting the key benefits, expected ROI, and strategic alignment with the company’s goals
Next steps — Upon approval, the project will move into the development phase, following the timeline and resource allocation outlined in the study. Continuous monitoring and iterative improvements will be made based on user feedback and performance metrics

8. Executive summary

This feasibility study evaluates the potential for developing and launching an AI-powered task prioritization feature within our project management tool. The feature is intended to automatically prioritize tasks based on deadlines, workload, and task importance, thus improving user productivity and project efficiency. The study concludes that the feature is both technically and financially viable, with a projected ROI of 200 percent over five years. The recommendation is to proceed with development, as the feature offers a significant opportunity for product differentiation and user satisfaction.

Mock feasibility study report

Now let’s see what a feasibility study report based on the above example scenario would look like ( download an example here ):

Introduction

The purpose of this feasibility study is to assess the viability of introducing an AI-powered task prioritization feature into our existing project management software. This feature aims to address the common user challenge of manually prioritizing tasks, which often leads to inefficiencies and missed deadlines. By automating this process, we expect to enhance user productivity, increase customer retention, and differentiate our product in a competitive market.

Market and user research

The total addressable market (TAM) for this AI-powered task prioritization feature includes all current and potential users of project management tools who manage tasks and projects regularly. Based on market analysis, the current user base primarily consists of mid-sized enterprises and large organizations, where task management is a critical component of daily operations.

Competitor analysis — Key competitors in the project management space, such as Asana and Trello, offer basic task prioritization features. However, these solutions lack advanced AI capabilities that dynamically adjust task priorities based on real-time data. This gap in the market presents an opportunity for us to differentiate our product by offering a more sophisticated, AI-driven solution
User pain points — Surveys and interviews conducted with our current user base reveal that 65 percent of users experience challenges with manual task prioritization. Common issues include difficulty in maintaining focus on high-priority tasks, inefficient use of time, and the tendency to miss deadlines due to poor task management. Users expressed a strong interest in an automated solution that could alleviate these challenges, indicating a high demand for the proposed feature

Technical feasibility

AI algorithm development — The core component of the feature is an AI algorithm capable of analyzing multiple task parameters, such as deadlines, workload, and task importance. The development of this algorithm requires expertise in machine learning, particularly in natural language processing (NLP) and predictive analytics. Additionally, data processing capabilities will need to be enhanced to handle the increased load from real-time task prioritization
Integration with existing infrastructure — The AI-powered feature must be integrated into our existing project management tool with minimal disruption. This includes ensuring compatibility with current data formats, APIs, and the user interface. The integration will also require modifications to the UI/UX to accommodate the new functionality while maintaining ease of use for existing features
Data handling and privacy — The feature will process sensitive project data, making robust data privacy and security measures critical. Compliance with regulations such as GDPR is mandatory, and the data flow must be encrypted end-to-end to prevent unauthorized access. Additionally, user consent will be required for data processing related to the AI feature
Phase 1 (3 months) — Research and development of the AI algorithm, including dataset acquisition, model training, and initial testing
Phase 2 (2 months) — Integration with the existing platform, focusing on backend development and UI/UX adjustments
Phase 3 (1 month) — Extensive testing, quality assurance, and bug fixing to ensure stability and performance
Phase 4 (1 month) — Development of user training materials, documentation, and preparation for the product launch

Financial analysis

Development costs — Estimated at $300,000, covering salaries, cloud computing resources, machine learning tools, and necessary software licenses
Marketing and launch costs — $50,000 allocated for promotional campaigns, user onboarding programs, and initial customer support post-launch
Operational costs — $20,000 annually for ongoing maintenance, AI model updates, and customer support services
Pricing model — The AI-powered task prioritization feature will be included in a premium subscription tier, with an additional monthly fee of $10 per user
User adoption — Market research suggests that approximately 25% of the current user base (estimated at 10,000 users) is likely to upgrade to the premium tier within the first year
Projected revenue — First-year revenue is estimated at $1.2 million, with an anticipated annual growth rate of 10% as more users adopt the feature
Break-even point — The project is expected to reach its break-even point within 6 months of the feature’s launch
Five-year ROI — Over a five-year period, the feature is projected to generate a return on investment (ROI) of 200 percent, driven by steady subscription revenue and enhanced user retention

Risk assessment

AI algorithm complexity — Developing a sophisticated AI algorithm poses significant technical challenges, including the risk of inaccuracies in task prioritization. Multiple iterations and extensive testing will be required to refine the algorithm
Integration issues — Integrating the new feature into the existing platform could potentially cause compatibility issues, resulting in performance degradation or user dissatisfaction
User adoption — There is a possibility that users may not perceive enough value in the AI-powered feature to justify the additional cost, leading to lower-than-expected adoption rates and revenue
Support and maintenance — The ongoing support and maintenance required for the AI feature, including regular updates and monitoring, could place a significant burden on the development and customer support teams, potentially leading to resource constraints
Data privacy compliance — Handling sensitive user data for AI processing necessitates strict adherence to data privacy regulations such as GDPR. Failure to comply could result in legal repercussions and damage to the company’s reputation

Conclusion and recommendations

The feasibility study demonstrates that the proposed AI-powered task prioritization feature is both technically and financially viable. The feature addresses a significant user pain point and has the potential to differentiate the product in a competitive market. With an estimated ROI of 200 percent over five years and strong user interest, it is recommended that the project move forward into the development phase.

Next steps include finalizing the development plan, securing approval from key stakeholders, and initiating the development process according to the outlined timeline and resource allocation. Continuous monitoring and iterative improvements will be essential to ensure the feature meets user expectations and achieves the projected financial outcomes.

Overcoming stakeholder management challenges

The ultimate challenge that faces most product managers when conducting a feasibility study is managing stakeholders .

Stakeholders may interfere with your analysis, jumping to conclusions that your proposed product or feature won’t work and deeming it a waste of resources. They may even try to prioritize your backlog for you.

Here are some tips to help you deal with even the most difficult stakeholders during a feasibility study:

Use hard data to make your point — Never defend your opinion based on your assumptions. Always show them data and evidence based on your user research and market analysis
Learn to say no — You are the voice of customers, and you know their issues and how to monetize them. Don’t be afraid to say no and defend your team’s work as a product manager
Build stakeholder buy-in early on — Engage stakeholders from the beginning of the feasibility study process by involving them in discussions and seeking their input. This helps create a sense of ownership and ensures that their concerns and insights are considered throughout the study
Provide regular updates and maintain transparency — Keep stakeholders informed about the progress of the feasibility study by providing regular updates and sharing key findings. This transparency can help build trust, foster collaboration, and prevent misunderstandings or misaligned expectations
Leverage stakeholder expertise — Recognize and utilize the unique expertise and knowledge that stakeholders bring to the table. By involving them in specific aspects of the feasibility study where their skills and experience can add value, you can strengthen the study’s outcomes and foster a more collaborative working relationship

Final thoughts

A feasibility study is a critical tool to use right after you identify a significant opportunity. It helps you evaluate the potential success of the opportunity, analyze and identify potential challenges, gaps, and risks in the opportunity, and provides a data-driven approach in the market insights to make an informed decision.

By conducting a feasibility study, product teams can determine whether a product idea is profitable, viable, feasible, and thus worth investing resources into. It is a crucial step in the product development process and when considering investments in significant initiatives such as launching a completely new product or vertical.

For a more detailed approach and ready-to-use resources, consider using the feasibility study template provided in this post. If you’re dealing with challenging stakeholders, remember the importance of data-driven decisions, maintaining transparency, and leveraging the expertise of your team.

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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.

Achieve project success with Asana

Are you done with your feasibility study? You’re ready to run a project! Set your project up for success by tracking your progress with a work management tool like Asana. From the small stuff to the big picture, Asana organizes work so teams know what to do, why it matters, and how to get it done.

Related resources

7 steps to crafting a winning event proposal (with template)

How Asana drives impactful product launches in 3 steps

How to streamline compliance management software with Asana

New site openings: How to reduce costs and delays

Examples of Business Feasibility Reports

Almost all business decisions require some degree of thoughtful analysis before a decision is made. Small business owners want to find the answers that determine if they should proceed with a proposed idea or not. Business feasibility reports provide the answer to that question.

What Is a Business Feasibility Report?

Business feasibility reports are analyses of a proposed venture or project that looks into the following areas:

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A description of the idea or project
Analysis of the market for the products or services
Competition
Technical issues involved
How the organization will be structured
Financial projections

What Is the Proposal?

A feasibility study starts with a description of the products or services to be marketed, and it outlines a model of how the business intends to make a profit. It describes the types and quality of products that will be offered and a timeline for preparation, implementation and the time it will take to reach profitable production volumes.

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A description of the project also includes its social, economic and environmental impact on surrounding communities.

What Is the Market?

The market portion of the feasibility study identifies the target market segments and describes the scope and size of the overall industry. It includes estimates of the future direction and strength of the demand for the products and services. What are the demographics of the potential consumers? How will the goods get distributed to the market?

Is the market stable or are future changes expected that will offer opportunities for the new venture?

What About the Competition?

Is the competition concentrated in a few large manufacturers or spread among numerous small producers? Who are the major competitors, and how will the new venture compete against them? What are the barriers to entry into the market?

Your business reports should outline a pricing strategy designed to attract customers from competitors and grow the sales of the company.

What Are the Technical Considerations?

The study will identify the type, size and location of any production facilities. It will outline the necessary buildings, equipment, distribution areas and inventory requirements and storage. Discuss any technologies that will be employed.

Describe the needed access to raw materials and labor. Who will be the potential suppliers and where are they located? What is the availability of the necessary skills in the local labor market?

A section of the feasibility study should discuss the environmental impact of the project and any potential regulatory issues or emissions problems.

How Will the Venture be Organized?

For any new project to achieve success, it must have an organizational structure designed to manage and control its operations, marketing and sales. What are the positions that will be required, and are there people available with the necessary skills to fill these positions?

What Are the Financial Projections?

Any new proposed ideas or ventures usually have an objective of somehow making a profit. Projections of future sales, expenses, profits and cash flow are intended to impart some understanding of the possible results of the project.

Financial considerations would describe the initial capital requirements, working capital needs and availability of supplier credit. They would also discuss possible alternative sources of funds, such as bank loans or venture capital partners.

A Business Feasibility Report Versus a Business Plan

A business feasibility report is not a business plan. A feasibility study is an investigative process that seeks to determine the viability of a business venture. It is conducted before a business plan is even considered.

A business plan describes the steps needed to take a proposal from an idea to the reality of implementation after the decision has been made to go ahead with the project.

Rowan University: Feasibility Study Template
Business Tasmania: How to Conduct a Feasibility Study
Cleverism: How to Conduct a Feasibility Study the Right Way
"VTT"; Technical Feasibility; Teppo Kivento

James Woodruff has been a management consultant to more than 1,000 small businesses. As a senior management consultant and owner, he used his technical expertise to conduct an analysis of a company's operational, financial and business management issues. James has been writing business and finance related topics for work.chron, bizfluent.com, smallbusiness.chron.com and e-commerce websites since 2007. He graduated from Georgia Tech with a Bachelor of Mechanical Engineering and received an MBA from Columbia University.

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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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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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Authors: Michael Laverty, Chris Littel
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Book title: Entrepreneurship
Publication date: Jan 16, 2020
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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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10 Feasibility study and business plan differences you should know

by Naiyer Jawaid | Nov 8, 2021 | Development , Real Estate | 5 comments

Feasibility study and business plan differences are subtle. In this post we will discuss 10 differences will help you to evaluate and differentiate between a feasibility study and a business plan.

Do you know what is a feasibility report? Do you know what is a business plan? Can you easily differentiate between a feasibility report and a business plan?

It’s easy! Just read out through the article and it will all be easy.

Let’s start by learning about a feasibility report:

A feasibility study is a formal document that assist in the identification and investigation of a proposed project. We can identify the project's weaknesses and strengths with the support of a feasibility study report, which saves us time and energy. We can determine whether the suggested idea will be lucrative and practicable in the future.

Before investing in a project, it is critical to determine if the project will be beneficial in the long run. The organization also needs to know how much the project will cost. Overall, a feasibility analysis indicates whether the firm should invest or continue with the project.

You should also like to read When to do feasibility study?

Now let us learn about business plan:

A business plan is a formal document that contains the goals/ objective of the business, the time in which the goal will be completed and the strategies that can be adopted to reach the specific goal.

A business plan is a necessary document for every new firm to have in place before it can begin operations. Writing a credible business plan is typically a requirement for banks and venture capital companies before contemplating granting funding to new enterprises.

It is not a smart idea to operate without a business strategy. In fact, very few businesses can survive for long without one. There are many more advantages to developing and keeping to a strong business plan, such as the ability to think through ideas without investing too much money and, eventually, losing money. Business plans are used by start-ups to get off the ground and attract outside investors.

A feasibility study is used to assess if a business or a concept is viable. After the business opportunity has been identified, the business strategy is produced. “A feasibility study is carried out with the goal of determining the workability and profitability of a company venture. A feasibility study is conducted before any money is committed in a new business endeavour to see whether it is worth the time, effort, and resources.

Similarities between a Feasibility study and a business plan

It's essential to analyse the similarities between a feasibility study and a business plan because they're both implemented altogether in same ways to help you build a lucrative company. The following are some of the similarities between the two documents:

Time: Both the reports are completed before the business begins and can be repeated afterwards to decide the next stages for new concepts.

Input: Both Feasibility report and the Business plan include input from a variety of people or departments with a variety of talents.

Format: Both report formats incorporate other documents that are gathered in order to create the report.

Components: Examining the target market, market circumstances, and financial expenses are some of the topics examined.

Use: Both may be displayed to potential investors and can assist the organization's management in making choices.

Organizations uses a business plan and a feasibility study as analytical and decision-making tools.

Although the three tools can be used in conjunction with one another in decision-making processes, they each have their own strengths and weaknesses, and they appear to target and address separate processes.

You might also like to read How to write a feasibility study report?

Now let us evaluate the difference between feasibility report and a business report-

A feasibility study is conducted to determine the viability and profitability of a business endeavour. A feasibility study is conducted before any money is committed in a new business endeavour to see whether it is worth the time, effort, and resources.

A business plan, on the other hand, is created only when it has been determined that a business opportunity exists and that the endeavour is about to begin.

A feasibility report is the first step and after that a business plan is made to be implemented, without feasibility report a business plan cannot be made.
A feasibility study contains computations, research, and projected financial forecasts for a company possibility. A business plan, on the other hand, is mostly comprised of tactics and strategies to be applied to establish and expand the company.
A feasibility study is concerned with the viability of a business concept, but a business plan is concerned with the development and sustainability of a company.
A feasibility report informs the entrepreneur about the profit potential of a company concept or opportunity, whereas a business plan assists the entrepreneur in raising the necessary start-up cash from investors.
Key components of a feasibility study and a business plan


Title page	Executive summary
Table of contents	Company summary
Executive summary	Market analysis
Market feasibility	Management team
Technical feasibility	Sales strategies
Financial feasibility	Funding
Organizational feasibility	Revenue projections
Conclusion	Appendix
Appendix and reference pages

A business plan does not include the description of the sales methods used, such as distribution agreements, strategic alliances, and the amount of involvement with partners, as well as the payment terms, warranties, and other customer support.

But a feasibility report includes all the sales methods, strategies, alliances to payment and customer support.

Feasibility report contains:
Assists in cost estimation, describe the production site, required inputs, and sourcing region.
Physical description of the factory, including machine, capacity, warehouse, and supply chain, is necessary.
Indicate if the area used for production is rented or owned. This will have an impact on the financial forecast.
Information regarding the manufacturer's capacity, order details, price, and so on, if manufacturing is outsourced. To aid in cost estimation, describe the production site, needed inputs, and sourcing location.
A physical description of the factory, including machine, capacity, warehouse, and supply chain, is necessary.

But a business plan does not contain anything related to production and operations, but a business plan contains all the information related to management.

A poorly written business plan – poor projections, strategies, analysis, business model, and environmental factors, among other things – can be easily adjusted during business operations, but this cannot be said of a feasibility study because an incorrect conclusion in a feasibility study can be costly — it could mean launching a venture with little chance of survival or approving a proposal that wastes the company's human and financial resources.
A business plan presume that a company will prosper and lays out the procedures needed to get there. Those in charge of conducting a feasibility study should not have any predetermined notions regarding the likelihood of success. They must maintain as much objectivity as possible. They do research and allow the facts to lead to the study's conclusion. If the study concludes that the idea is viable, some of the findings, such as market size predictions, may be incorporated in the company's business plan.

You should also read What is land development feasibility study?

These 10 differences will help you to evaluate and differentiate between a feasibility study and a business plan.

Feasibility study may appear to be like the business plan in many respects. "A feasibility study may easily be transformed to a business plan” but it is crucial to remember that the feasibility study is completed prior to the endeavor. The business plan should be thought of in terms of growth and sustainability, whereas the feasibility study should be thought of in terms of concept viability.

This is all you need to know and understand about feasibility study and business plan.

Get ready to apply your knowledge in the real words with lots of success.

You might also like to explore below external contents on feasibility study :

What Is a Feasibility Study? – Types & Benefits
Best 8 Property Management Software
FEASIBILITY STUDIES & BUSINESS PLANS

Hope you enjoyed this post on feasibility study , let me know what you think in the comment section below.

Are you someone involved with real estate feasibility?

We are excited to launch the next generation of real estate feasibility software to help you manage your development projects with ease.

This is a very good piece of writing. When you have a concept for a company but want to be sure it’s a good idea, you do a feasibility study.

It was very helpful. Thank you so much!

Appropriately timed! A company’s future operations are laid out in great detail in the company’s business plan. Once you’ve done your feasibility study, you’ll know whether or not the proposal has merit. The next step is to lay out your goals, whether financial and otherwise, as well as the strategies you want to use to attain them and the organisational structure you envision.

Prior to the company opening, both are undertaken, and may be repeated again in the future to identify the next steps on new ideas that may arise.

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Table of Contents

How to make a business plan

How to make a good business plan: step-by-step guide.

A business plan is a strategic roadmap used to navigate the challenging journey of entrepreneurship. It's the foundation upon which you build a successful business.

A well-crafted business plan can help you define your vision, clarify your goals, and identify potential problems before they arise.

But where do you start? How do you create a business plan that sets you up for success?

This article will explore the step-by-step process of creating a comprehensive business plan.

What is a business plan?

A business plan is a formal document that outlines a business's objectives, strategies, and operational procedures. It typically includes the following information about a company:

Products or services

Target market

Competitors

Marketing and sales strategies

Financial plan

Management team

A business plan serves as a roadmap for a company's success and provides a blueprint for its growth and development. It helps entrepreneurs and business owners organize their ideas, evaluate the feasibility, and identify potential challenges and opportunities.

As well as serving as a guide for business owners, a business plan can attract investors and secure funding. It demonstrates the company's understanding of the market, its ability to generate revenue and profits, and its strategy for managing risks and achieving success.

Business plan vs. business model canvas

A business plan may seem similar to a business model canvas, but each document serves a different purpose.

A business model canvas is a high-level overview that helps entrepreneurs and business owners quickly test and iterate their ideas. It is often a one-page document that briefly outlines the following:

Key partnerships

Key activities

Key propositions

Customer relationships

Customer segments

Key resources

Cost structure

Revenue streams

On the other hand, a Business Plan Template provides a more in-depth analysis of a company's strategy and operations. It is typically a lengthy document and requires significant time and effort to develop.

A business model shouldn’t replace a business plan, and vice versa. Business owners should lay the foundations and visually capture the most important information with a Business Model Canvas Template . Because this is a fast and efficient way to communicate a business idea, a business model canvas is a good starting point before developing a more comprehensive business plan.

A business plan can aim to secure funding from investors or lenders, while a business model canvas communicates a business idea to potential customers or partners.

Why is a business plan important?

A business plan is crucial for any entrepreneur or business owner wanting to increase their chances of success.

Here are some of the many benefits of having a thorough business plan.

Helps to define the business goals and objectives

A business plan encourages you to think critically about your goals and objectives. Doing so lets you clearly understand what you want to achieve and how you plan to get there.

A well-defined set of goals, objectives, and key results also provides a sense of direction and purpose, which helps keep business owners focused and motivated.

Guides decision-making

A business plan requires you to consider different scenarios and potential problems that may arise in your business. This awareness allows you to devise strategies to deal with these issues and avoid pitfalls.

With a clear plan, entrepreneurs can make informed decisions aligning with their overall business goals and objectives. This helps reduce the risk of making costly mistakes and ensures they make decisions with long-term success in mind.

Attracts investors and secures funding

Investors and lenders often require a business plan before considering investing in your business. A document that outlines the company's goals, objectives, and financial forecasts can help instill confidence in potential investors and lenders.

A well-written business plan demonstrates that you have thoroughly thought through your business idea and have a solid plan for success.

Identifies potential challenges and risks

A business plan requires entrepreneurs to consider potential challenges and risks that could impact their business. For example:

Is there enough demand for my product or service?

Will I have enough capital to start my business?

Is the market oversaturated with too many competitors?

What will happen if my marketing strategy is ineffective?

By identifying these potential challenges, entrepreneurs can develop strategies to mitigate risks and overcome challenges. This can reduce the likelihood of costly mistakes and ensure the business is well-positioned to take on any challenges.

Provides a basis for measuring success

A business plan serves as a framework for measuring success by providing clear goals and financial projections . Entrepreneurs can regularly refer to the original business plan as a benchmark to measure progress. By comparing the current business position to initial forecasts, business owners can answer questions such as:

Are we where we want to be at this point?

Did we achieve our goals?

If not, why not, and what do we need to do?

After assessing whether the business is meeting its objectives or falling short, business owners can adjust their strategies as needed.

How to make a business plan step by step

The steps below will guide you through the process of creating a business plan and what key components you need to include.

1. Create an executive summary

Start with a brief overview of your entire plan. The executive summary should cover your business plan's main points and key takeaways.

Keep your executive summary concise and clear with the Executive Summary Template . The simple design helps readers understand the crux of your business plan without reading the entire document.

2. Write your company description

Provide a detailed explanation of your company. Include information on what your company does, the mission statement, and your vision for the future.

Provide additional background information on the history of your company, the founders, and any notable achievements or milestones.

3. Conduct a market analysis

Conduct an in-depth analysis of your industry, competitors, and target market. This is best done with a SWOT analysis to identify your strengths, weaknesses, opportunities, and threats. Next, identify your target market's needs, demographics, and behaviors.

Use the Competitive Analysis Template to brainstorm answers to simple questions like:

What does the current market look like?

Who are your competitors?

What are they offering?

What will give you a competitive advantage?

Who is your target market?

What are they looking for and why?

How will your product or service satisfy a need?

These questions should give you valuable insights into the current market and where your business stands.

4. Describe your products and services

Provide detailed information about your products and services. This includes pricing information, product features, and any unique selling points.

Use the Product/Market Fit Template to explain how your products meet the needs of your target market. Describe what sets them apart from the competition.

5. Design a marketing and sales strategy

Outline how you plan to promote and sell your products. Your marketing strategy and sales strategy should include information about your:

Pricing strategy

Advertising and promotional tactics

Sales channels

The Go to Market Strategy Template is a great way to visually map how you plan to launch your product or service in a new or existing market.

6. Determine budget and financial projections

Document detailed information on your business’ finances. Describe the current financial position of the company and how you expect the finances to play out.

Some details to include in this section are:

Startup costs

Revenue projections

Profit and loss statement

Funding you have received or plan to receive

Strategy for raising funds

7. Set the organization and management structure

Define how your company is structured and who will be responsible for each aspect of the business. Use the Business Organizational Chart Template to visually map the company’s teams, roles, and hierarchy.

As well as the organization and management structure, discuss the legal structure of your business. Clarify whether your business is a corporation, partnership, sole proprietorship, or LLC.

8. Make an action plan

At this point in your business plan, you’ve described what you’re aiming for. But how are you going to get there? The Action Plan Template describes the following steps to move your business plan forward. Outline the next steps you plan to take to bring your business plan to fruition.

Types of business plans

Several types of business plans cater to different purposes and stages of a company's lifecycle. Here are some of the most common types of business plans.

Startup business plan

A startup business plan is typically an entrepreneur's first business plan. This document helps entrepreneurs articulate their business idea when starting a new business.

Not sure how to make a business plan for a startup? It’s pretty similar to a regular business plan, except the primary purpose of a startup business plan is to convince investors to provide funding for the business. A startup business plan also outlines the potential target market, product/service offering, marketing plan, and financial projections.

Strategic business plan

A strategic business plan is a long-term plan that outlines a company's overall strategy, objectives, and tactics. This type of strategic plan focuses on the big picture and helps business owners set goals and priorities and measure progress.

The primary purpose of a strategic business plan is to provide direction and guidance to the company's management team and stakeholders. The plan typically covers a period of three to five years.

Operational business plan

An operational business plan is a detailed document that outlines the day-to-day operations of a business. It focuses on the specific activities and processes required to run the business, such as:

Organizational structure

Staffing plan

Production plan

Quality control

Inventory management

Supply chain

The primary purpose of an operational business plan is to ensure that the business runs efficiently and effectively. It helps business owners manage their resources, track their performance, and identify areas for improvement.

Growth-business plan

A growth-business plan is a strategic plan that outlines how a company plans to expand its business. It helps business owners identify new market opportunities and increase revenue and profitability. The primary purpose of a growth-business plan is to provide a roadmap for the company's expansion and growth.

The 3 Horizons of Growth Template is a great tool to identify new areas of growth. This framework categorizes growth opportunities into three categories: Horizon 1 (core business), Horizon 2 (emerging business), and Horizon 3 (potential business).

One-page business plan

A one-page business plan is a condensed version of a full business plan that focuses on the most critical aspects of a business. It’s a great tool for entrepreneurs who want to quickly communicate their business idea to potential investors, partners, or employees.

A one-page business plan typically includes sections such as business concept, value proposition, revenue streams, and cost structure.

Best practices for how to make a good business plan

Here are some additional tips for creating a business plan:

Use a template

A template can help you organize your thoughts and effectively communicate your business ideas and strategies. Starting with a template can also save you time and effort when formatting your plan.

Miro’s extensive library of customizable templates includes all the necessary sections for a comprehensive business plan. With our templates, you can confidently present your business plans to stakeholders and investors.

Be practical

Avoid overestimating revenue projections or underestimating expenses. Your business plan should be grounded in practical realities like your budget, resources, and capabilities.

Be specific

Provide as much detail as possible in your business plan. A specific plan is easier to execute because it provides clear guidance on what needs to be done and how. Without specific details, your plan may be too broad or vague, making it difficult to know where to start or how to measure success.

Be thorough with your research

Conduct thorough research to fully understand the market, your competitors, and your target audience . By conducting thorough research, you can identify potential risks and challenges your business may face and develop strategies to mitigate them.

Get input from others

It can be easy to become overly focused on your vision and ideas, leading to tunnel vision and a lack of objectivity. By seeking input from others, you can identify potential opportunities you may have overlooked.

Review and revise regularly

A business plan is a living document. You should update it regularly to reflect market, industry, and business changes. Set aside time for regular reviews and revisions to ensure your plan remains relevant and effective.

Create a winning business plan to chart your path to success

Starting or growing a business can be challenging, but it doesn't have to be. Whether you're a seasoned entrepreneur or just starting, a well-written business plan can make or break your business’ success.

The purpose of a business plan is more than just to secure funding and attract investors. It also serves as a roadmap for achieving your business goals and realizing your vision. With the right mindset, tools, and strategies, you can develop a visually appealing, persuasive business plan.

Ready to make an effective business plan that works for you? Check out our library of ready-made strategy and planning templates and chart your path to success.

Get on board in seconds

Plans and pricing.

What is a Feasibility Study?

Steps in a feasibility study, contents of a feasibility report, types of feasibility study, more resources, feasibility study.

An assessment of the practicality of a proposed project/plan

A feasibility study, as the name suggests, is designed to reveal whether a project/plan is feasible. It is an assessment of the practicality of a proposed project/plan.

A feasibility study is part of the initial design stage of any project/plan. It is conducted in order to objectively uncover the strengths and weaknesses of a proposed project or an existing business. It can help to identify and assess the opportunities and threats present in the natural environment, the resources required for the project, and the prospects for success. It is conducted in order to find answers to the following questions:

Does the company possess the required resources and technology?
Will the company receive a sufficiently high return on its investment?

Conducting a feasibility study involves the following steps:

Conduct preliminary analyses.
Prepare a projected income statement . What are the possible revenues that the project can generate?
Conduct a market survey. Does the project create a good or service that is in demand in the market? What price are consumers willing to pay for the good or service?
Plan the organizational structure of the new project. What are the staffing requirements? How many workers are needed? What other resources are needed?
Prepare an opening day balance of projected expenses and revenue
Review and analyze the points of vulnerability that are internal to the project and that can be controlled or eliminated.
Decide whether to go on with the plan/project.

A feasibility report should include the following sections:

Executive Summary
Description of the Product/Service
Technology Considerations
Product/ Service Marketplace
Identification of the Specific Market
Marketing Strategy
Organizational Structure
Financial Projections

1. Technical feasibility

Technical: Hardware and software
Existing or new technology
Site analysis
Transportation

2. Financial feasibility

Initial investment
Resources to procure capital: Banks, investors, venture capitalists
Return on investment

3. Market feasibility

Type of industry
Prevailing market
Future market growth
Competitors and potential customers
Projection of sales

4. Organizational feasibility

The organizational structure of the business
Legal structure of the business or the specific project
Management team’s competency, professional skills, and experience

The practice of companies blindly following available templates comes with enormous risks. Whether companies design or copy certain business models, it is necessary to conduct a feasibility study using models to reduce the risk of failure. A feasibility study of the business model should be centered on the organization’s value-creation processes.

Thank you for reading CFI’s guide on Feasibility Study. To keep learning and advancing your career, the additional CFI resources below will be useful:

Cross-Sectional Data Analysis
Financial Statements Examples – Amazon Case Study
Market Planning
See all management & strategy resources

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What is a Feasibility Study and How to Conduct It? (+ Examples)

Appinio Research · 26.09.2023 · 28min read

Are you ready to turn your project or business idea into a concrete reality but unsure about its feasibility? Whether you're a seasoned entrepreneur or a first-time project manager, understanding the intricate process of conducting a feasibility study is vital for making informed decisions and maximizing your chances of success.

This guide will equip you with the knowledge and tools to navigate the complexities of market, technical, financial, and operational feasibility studies. By the end, you'll have a clear roadmap to confidently assess, plan, and execute your project.

What is a Feasibility Study?

A feasibility study is a systematic and comprehensive analysis of a proposed project or business idea to assess its viability and potential for success. It involves evaluating various aspects such as market demand, technical feasibility, financial viability, and operational capabilities. The primary goal of a feasibility study is to provide you with valuable insights and data to make informed decisions about whether to proceed with the project.

Why is a Feasibility Study Important?

Conducting a feasibility study is a critical step in the planning process for any project or business. It helps you:

Minimize Risks: By identifying potential challenges and obstacles early on, you can develop strategies to mitigate risks.
Optimize Resource Allocation: A feasibility study helps you allocate your resources more efficiently, including time and money.
Enhance Decision-Making: Armed with data and insights, you can make well-informed decisions about pursuing the project or exploring alternative options.
Attract Stakeholders: Potential investors, lenders, and partners often require a feasibility study to assess the project's credibility and potential return on investment.

Now that you understand the importance of feasibility studies, let's explore the various types and dive deeper into each aspect.

Types of Feasibility Studies

Feasibility studies come in various forms, each designed to assess different aspects of a project's viability. Let's delve into the four primary types of feasibility studies in more detail:

1. Market Feasibility Study

Market feasibility studies are conducted to determine whether there is a demand for a product or service in a specific market or industry. This type of study focuses on understanding customer needs, market trends, and the competitive landscape. Here are the key elements of a market feasibility study:

Market Research and Analysis: Comprehensive research is conducted to gather market size, growth potential , and customer behavior data. This includes both primary research (surveys, interviews) and secondary research (existing reports, data).
Target Audience Identification: Identifying the ideal customer base by segmenting the market based on demographics, psychographics, and behavior. Understanding your target audience is crucial for tailoring your product or service.
Competitive Analysis : Assessing the competition within the market, including identifying direct and indirect competitors, their strengths, weaknesses, and market share .
Demand and Supply Assessment: Analyzing the balance between the demand for the product or service and its supply. This helps determine whether there is room for a new entrant in the market.

2. Technical Feasibility Study

Technical feasibility studies evaluate whether the project can be developed and implemented from a technical standpoint. This assessment focuses on the project's design, technical requirements, and resource availability. Here's what it entails:

Project Design and Technical Requirements: Defining the technical specifications of the project, including hardware, software, and any specialized equipment. This phase outlines the technical aspects required for project execution.
Technology Assessment: Evaluating the chosen technology's suitability for the project and assessing its scalability and compatibility with existing systems.
Resource Evaluation: Assessing the availability of essential resources such as personnel, materials, and suppliers to ensure the project's technical requirements can be met.
Risk Analysis: Identifying potential technical risks, challenges, and obstacles that may arise during project development. Developing risk mitigation strategies is a critical part of technical feasibility.

3. Financial Feasibility Study

Financial feasibility studies aim to determine whether the project is financially viable and sustainable in the long run. This type of study involves estimating costs, projecting revenue, and conducting financial analyses. Key components include:

Cost Estimation: Calculating both initial and ongoing costs associated with the project, including capital expenditures, operational expenses, and contingency funds.
Revenue Projections: Forecasting the income the project is expected to generate, considering sales, pricing strategies, market demand, and potential revenue streams.
Investment Analysis: Evaluating the return on investment (ROI), payback period, and potential risks associated with financing the project.
Financial Viability Assessment: Analyzing the project's profitability, cash flow, and financial stability to ensure it can meet its financial obligations and sustain operations.

4. Operational Feasibility Study

Operational feasibility studies assess whether the project can be effectively implemented within the organization's existing operational framework. This study considers processes, resource planning, scalability, and operational risks. Key elements include:

Process and Workflow Assessment: Analyzing how the project integrates with current processes and workflows, identifying potential bottlenecks, and optimizing operations.
Resource Planning: Determining the human, physical, and technological resources required for successful project execution and identifying resource gaps.
Scalability Evaluation: Assessing the project's ability to adapt and expand to meet changing demands and growth opportunities, including capacity planning and growth strategies.
Operational Risks Analysis: Identifying potential operational challenges and developing strategies to mitigate them, ensuring smooth project implementation.

Each type of feasibility study serves a specific purpose in evaluating different facets of your project, collectively providing a comprehensive assessment of its viability and potential for success.

How to Prepare for a Feasibility Study?

Before you dive into the nitty-gritty details of conducting a feasibility study, it's essential to prepare thoroughly. Proper preparation will set the stage for a successful and insightful study. In this section, we'll explore the main steps involved in preparing for a feasibility study.

1. Identify the Project or Idea

Identifying and defining your project or business idea is the foundational step in the feasibility study process. This initial phase is critical because it helps you clarify your objectives and set the direction for the study.

Problem Identification: Start by pinpointing the problem or need your project addresses. What pain point does it solve for your target audience?
Project Definition: Clearly define your project or business idea. What are its core components, features, or offerings?
Goals and Objectives: Establish specific goals and objectives for your project. What do you aim to achieve in the short and long term?
Alignment with Vision: Ensure your project aligns with your overall vision and mission. How does it fit into your larger strategic plan?

Remember, the more precisely you can articulate your project or idea at this stage, the easier it will be to conduct a focused and effective feasibility study.

2. Assemble a Feasibility Study Team

Once you've defined your project, the next step is to assemble a competent and diverse feasibility study team. Your team's expertise will play a crucial role in conducting a thorough assessment of your project's viability.

Identify Key Roles: Determine the essential roles required for your feasibility study. These typically include experts in areas such as market research, finance, technology, and operations.
Select Team Members: Choose team members with the relevant skills and experience to fulfill these roles effectively. Look for individuals who have successfully conducted feasibility studies in the past.
Collaboration and Communication: Foster a collaborative environment within your team. Effective communication is essential to ensure everyone is aligned on objectives and timelines.
Project Manager: Designate a project manager responsible for coordinating the study, tracking progress, and meeting deadlines.
External Consultants: In some cases, you may need to engage external consultants or specialists with niche expertise to provide valuable insights.

Having the right people on your team will help you collect accurate data, analyze findings comprehensively, and make well-informed decisions based on the study's outcomes.

3. Set Clear Objectives and Scope

Before you begin the feasibility study, it's crucial to establish clear and well-defined objectives. These objectives will guide your research and analysis efforts throughout the study.

Steps to Set Clear Objectives and Scope:

Objective Clarity: Define the specific goals you aim to achieve through the feasibility study. What questions do you want to answer, and what decisions will the study inform?
Scope Definition: Determine the boundaries of your study. What aspects of the project will be included, and what will be excluded? Clarify any limitations.
Resource Allocation: Assess the resources needed for the study, including time, budget, and personnel. Ensure that you allocate resources appropriately based on the scope and objectives.
Timeline: Establish a realistic timeline for the feasibility study. Identify key milestones and deadlines for completing different phases of the study.

Clear objectives and a well-defined scope will help you stay focused and avoid scope creep during the study. They also provide a basis for measuring the study's success against its intended outcomes.

4. Gather Initial Information

Before you delve into extensive research and data collection , start by gathering any existing information and documents related to your project or industry. This initial step will help you understand the current landscape and identify gaps in your knowledge.

Document Review: Review any existing project documentation, market research reports, business plans, or relevant industry studies.
Competitor Analysis : Gather information about your competitors, including their products, pricing, market share, and strategies.
Regulatory and Compliance Documents: If applicable, collect information on industry regulations, permits, licenses, and compliance requirements.
Market Trends: Stay informed about current market trends, consumer preferences, and emerging technologies that may impact your project.
Stakeholder Interviews: Consider conducting initial interviews with key stakeholders, including potential customers, suppliers, and industry experts, to gather insights and feedback.

By starting with a strong foundation of existing knowledge, you'll be better prepared to identify gaps that require further investigation during the feasibility study. This proactive approach ensures that your study is comprehensive and well-informed from the outset.

How to Conduct a Market Feasibility Study?

The market feasibility study is a crucial component of your overall feasibility analysis. It focuses on assessing the potential demand for your product or service, understanding your target audience, analyzing your competition, and evaluating supply and demand dynamics within your chosen market.

Market Research and Analysis

Market research is the foundation of your market feasibility study. It involves gathering and analyzing data to gain insights into market trends, customer preferences, and the overall business landscape.

Data Collection: Utilize various methods such as surveys, interviews, questionnaires, and secondary research to collect data about the market. This data may include market size, growth rates, and historical trends.
Market Segmentation: Divide the market into segments based on factors such as demographics, psychographics , geography, and behavior. This segmentation helps you identify specific target markets .
Customer Needs Analysis: Understand the needs, preferences, and pain points of potential customers . Determine how your product or service can address these needs effectively.
Market Trends: Stay updated on current market trends, emerging technologies, and industry innovations that could impact your project.
SWOT Analysis: Conduct a SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis to identify internal and external factors that may affect your market entry strategy.

In today's dynamic market landscape, gathering precise data for your market feasibility study is paramount. Appinio offers a versatile platform that enables you to swiftly collect valuable market insights from a diverse audience.

With Appinio, you can employ surveys, questionnaires, and in-depth analyses to refine your understanding of market trends, customer preferences, and competition.

Enhance your market research and gain a competitive edge by booking a demo with us today!

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Target Audience Identification

Knowing your target audience is essential for tailoring your product or service to meet their specific needs and preferences.

Demographic Analysis: Define the age, gender, income level, education, and other demographic characteristics of your ideal customers.
Psychographic Profiling: Understand the psychographics of your target audience, including their lifestyle, values, interests, and buying behavior.
Market Segmentation: Refine your target audience by segmenting it further based on shared characteristics and behaviors.
Needs and Pain Points: Identify your target audience's unique needs, challenges, and pain points that your product or service can address.
Competitor's Customers: Analyze the customer base of your competitors to identify potential opportunities for capturing market share.

Competitive Analysis

Competitive analysis helps you understand the strengths and weaknesses of your competitors, positioning your project strategically within the market.

Competitor Identification: Identify direct and indirect competitors within your industry or market niche.
Competitive Advantage: Determine the unique selling points (USPs) that set your project apart from competitors. What value can you offer that others cannot?
SWOT Analysis for Competitors: Conduct a SWOT analysis for each competitor to assess their strengths, weaknesses, opportunities, and threats.
Market Share Assessment: Analyze each competitor's market share and market penetration strategies.
Pricing Strategies: Investigate the pricing strategies employed by competitors and consider how your pricing strategy will compare.

Leveraging the power of data collection and analysis is essential in gaining a competitive edge. With Appinio , you can efficiently gather critical insights about your competitors, their strengths, and weaknesses. Seamlessly integrate these findings into your market feasibility study, empowering your project with a strategic advantage.

Demand and Supply Assessment

Understanding supply and demand dynamics is crucial for gauging market sustainability and potential challenges.

Market Demand Analysis: Estimate the current and future demand for your product or service. Consider factors like seasonality and trends.
Supply Evaluation: Assess the availability of resources, suppliers, and distribution channels required to meet the expected demand.
Market Saturation: Determine whether the market is saturated with similar offerings and how this might affect your project.
Demand Forecasting: Use historical data and market trends to make informed projections about future demand.
Scalability: Consider the scalability of your project to meet increased demand or potential fluctuations.

A comprehensive market feasibility study will give you valuable insights into your potential customer base, market dynamics, and competitive landscape. This information will be pivotal in shaping your project's direction and strategy.

How to Conduct a Technical Feasibility Study?

The technical feasibility study assesses the practicality of implementing your project from a technical standpoint. It involves evaluating the project's design, technical requirements, technological feasibility, resource availability, and risk analysis. Let's delve into each aspect in more detail.

1. Project Design and Technical Requirements

The project design and technical requirements are the foundation of your technical feasibility study. This phase involves defining the technical specifications and infrastructure needed to execute your project successfully.

Technical Specifications: Clearly define the technical specifications of your project, including hardware, software, and any specialized equipment.
Infrastructure Planning: Determine the physical infrastructure requirements, such as facilities, utilities, and transportation logistics.
Development Workflow: Outline the workflow and processes required to design, develop, and implement the project.
Prototyping: Consider creating prototypes or proof-of-concept models to test and validate the technical aspects of your project.

2. Technology Assessment

A critical aspect of the technical feasibility study is assessing the technology required for your project and ensuring it aligns with your goals.

Technology Suitability: Evaluate the suitability of the chosen technology for your project. Is it the right fit, or are there better alternatives?
Scalability and Compatibility: Assess whether the chosen technology can scale as your project grows and whether it is compatible with existing systems or software.
Security Measures: Consider cybersecurity and data protection measures to safeguard sensitive information.
Technical Expertise: Ensure your team or external partners possess the technical expertise to implement and maintain the technology.

3. Resource Evaluation

Resource evaluation involves assessing the availability of the essential resources required to execute your project successfully. These resources include personnel, materials, and suppliers.

Human Resources: Evaluate whether you have access to skilled personnel or if additional hiring or training is necessary.
Material Resources: Identify the materials and supplies needed for your project and assess their availability and costs.
Supplier Relationships: Establish relationships with reliable suppliers and consistently assess their ability to meet your resource requirements.

4. Risk Analysis

Risk analysis is a critical component of the technical feasibility study, as it helps you anticipate and mitigate potential technical challenges and setbacks.

Identify Risks: Identify potential technical risks, such as hardware or software failures, technical skill gaps, or unforeseen technical obstacles.
Risk Mitigation Strategies: Develop strategies to mitigate identified risks, including contingency plans and resource allocation for risk management.
Cost Estimation for Risk Mitigation: Assess the potential costs associated with managing technical risks and incorporate them into your project budget.

By conducting a thorough technical feasibility study, you can ensure that your project is technically viable and well-prepared to overcome technical challenges. This assessment will also guide decision-making regarding technology choices, resource allocation, and risk management strategies.

How to Conduct a Financial Feasibility Study?

The financial feasibility study is a critical aspect of your overall feasibility analysis. It focuses on assessing the financial viability of your project by estimating costs, projecting revenue, conducting investment analysis, and evaluating the overall financial health of your project. Let's delve into each aspect in more detail.

1. Cost Estimation

Cost estimation is the process of calculating the expenses associated with planning, developing, and implementing your project. This involves identifying both initial and ongoing costs.

Initial Costs: Calculate the upfront expenses required to initiate the project, including capital expenditures, equipment purchases, and any development costs.
Operational Costs: Estimate the ongoing operating expenses, such as salaries, utilities, rent, marketing, and maintenance.
Contingency Funds: Allocate funds for unexpected expenses or contingencies to account for unforeseen challenges.
Depreciation: Consider the depreciation of assets over time, as it impacts your financial statements.

2. Revenue Projections

Revenue projections involve forecasting the income your project is expected to generate over a specific period. Accurate revenue projections are crucial for assessing the project's financial viability.

Sales Forecasts: Estimate your product or service sales based on market demand, pricing strategies, and potential growth.
Pricing Strategy: Determine your pricing strategy, considering factors like competition, market conditions, and customer willingness to pay.
Market Penetration: Analyze how quickly you can capture market share and increase sales over time.
Seasonal Variations: Account for any seasonal fluctuations in revenue that may impact your cash flow.

3. Investment Analysis

Investment analysis involves evaluating the potential return on investment (ROI) and assessing the attractiveness of your project to potential investors or stakeholders.

Return on Investment (ROI): Calculate the expected ROI by comparing the project's net gains against the initial investment.
Payback Period: Determine how long it will take for the project to generate sufficient revenue to cover its initial costs.
Risk Assessment: Consider the level of risk associated with the project and whether it aligns with investors' risk tolerance.
Sensitivity Analysis: Perform sensitivity analysis to understand how changes in key variables, such as sales or costs, affect the investment's profitability.

4. Financial Viability Assessment

A financial viability assessment evaluates the project's ability to sustain itself financially in the long term. It considers factors such as profitability, cash flow, and financial stability.

Profitability Analysis: Assess whether the project is expected to generate profits over its lifespan.
Cash Flow Management: Analyze the project's cash flow to ensure it can cover operating expenses, debt payments, and other financial obligations.
Break-Even Analysis: Determine the point at which the project's revenue covers all costs, resulting in neither profit nor loss.
Financial Ratios: Calculate key financial ratios, such as debt-to-equity ratio and return on equity, to evaluate the project's financial health.

By conducting a comprehensive financial feasibility study, you can gain a clear understanding of the project's financial prospects and make informed decisions regarding its viability and potential for success.

How to Conduct an Operational Feasibility Study?

The operational feasibility study assesses whether your project can be implemented effectively within your organization's operational framework. It involves evaluating processes, resource planning, scalability, and analyzing potential operational risks.

1. Process and Workflow Assessment

The process and workflow assessment examines how the project integrates with existing processes and workflows within your organization.

Process Mapping: Map out current processes and workflows to identify areas of integration and potential bottlenecks.
Workflow Efficiency: Assess the efficiency and effectiveness of existing workflows and identify opportunities for improvement.
Change Management: Consider the project's impact on employees and plan for change management strategies to ensure a smooth transition.

2. Resource Planning

Resource planning involves determining the human, physical, and technological resources needed to execute the project successfully.

Human Resources: Assess the availability of skilled personnel and consider whether additional hiring or training is necessary.
Physical Resources: Identify the physical infrastructure, equipment, and materials required for the project.
Technology and Tools: Ensure that the necessary technology and tools are available and up to date to support project implementation.

3. Scalability Evaluation

Scalability evaluation assesses whether the project can adapt and expand to meet changing demands and growth opportunities.

Scalability Factors: Identify factors impacting scalability, such as market growth, customer demand, and technological advancements.
Capacity Planning: Plan for the scalability of resources, including personnel, infrastructure, and technology.
Growth Strategies: Develop strategies for scaling the project, such as geographic expansion, product diversification, or increasing production capacity.

4. Operational Risk Analysis

Operational risk analysis involves identifying potential operational challenges and developing mitigation strategies.

Risk Identification: Identify operational risks that could disrupt project implementation or ongoing operations.
Risk Mitigation: Develop risk mitigation plans and contingency strategies to address potential challenges.
Testing and Simulation: Consider conducting simulations or testing to evaluate how the project performs under various operational scenarios.
Monitoring and Adaptation: Implement monitoring and feedback mechanisms to detect and address operational issues as they arise.

Conducting a thorough operational feasibility study ensures that your project aligns with your organization's capabilities, processes, and resources. This assessment will help you plan for a successful implementation and minimize operational disruptions.

How to Write a Feasibility Study?

The feasibility study report is the culmination of your feasibility analysis. It provides a structured and comprehensive document outlining your study's findings, conclusions, and recommendations. Let's explore the key components of the feasibility study report.

1. Structure and Components

The structure of your feasibility study report should be well-organized and easy to navigate. It typically includes the following components:

Executive Summary: A concise summary of the study's key findings, conclusions, and recommendations.
Introduction: An overview of the project, the objectives of the study, and a brief outline of what the report covers.
Methodology: A description of the research methods , data sources, and analytical techniques used in the study.
Market Feasibility Study: Detailed information on market research, target audience, competitive analysis, and demand-supply assessment.
Technical Feasibility Study: Insights into project design, technical requirements, technology assessment, resource evaluation, and risk analysis.
Financial Feasibility Study: Comprehensive information on cost estimation, revenue projections, investment analysis, and financial viability assessment.
Operational Feasibility Study: Details on process and workflow assessment, resource planning, scalability evaluation, and operational risks analysis.
Conclusion: A summary of key findings and conclusions drawn from the study.

Recommendations: Clear and actionable recommendations based on the study's findings.

2. Write the Feasibility Study Report

When writing the feasibility study report, it's essential to maintain clarity, conciseness, and objectivity. Use clear language and provide sufficient detail to support your conclusions and recommendations.

Be Objective: Present findings and conclusions impartially, based on data and analysis.
Use Visuals: Incorporate charts, graphs, and tables to illustrate key points and make the report more accessible.
Cite Sources: Properly cite all data sources and references used in the study.
Include Appendices: Attach any supplementary information, data, or documents in appendices for reference.

3. Present Findings and Recommendations

When presenting your findings and recommendations, consider your target audience. Tailor your presentation to the needs and interests of stakeholders, whether they are investors, executives, or decision-makers.

Highlight Key Takeaways: Summarize the most critical findings and recommendations upfront.
Use Visual Aids: Create a visually engaging presentation with slides, charts, and infographics.
Address Questions: Be prepared to answer questions and provide additional context during the presentation.
Provide Supporting Data: Back up your findings and recommendations with data from the feasibility study.

4. Review and Validation

Before finalizing the feasibility study report, conducting a thorough review and validation process is crucial. This ensures the accuracy and credibility of the report.

Peer Review: Have colleagues or subject matter experts review the report for accuracy and completeness.
Data Validation: Double-check data sources and calculations to ensure they are accurate.
Cross-Functional Review: Involve team members from different disciplines to provide diverse perspectives.
Stakeholder Input: Seek input from key stakeholders to validate findings and recommendations.

By following a structured approach to creating your feasibility study report, you can effectively communicate the results of your analysis, support informed decision-making, and increase the likelihood of project success.

Feasibility Study Examples

Let's dive into some real-world examples to truly grasp the concept and application of feasibility studies. These examples will illustrate how various types of projects and businesses undergo the feasibility assessment process to ensure their viability and success.

Example 1: Local Restaurant

Imagine you're passionate about opening a new restaurant in a bustling urban area. Before investing significant capital, you'd want to conduct a thorough feasibility study. Here's how it might unfold:

Market Feasibility: You research the local dining scene, identify target demographics, and assess the demand for your cuisine. Market surveys reveal potential competitors, dining preferences, and pricing expectations.
Technical Feasibility: You design the restaurant layout, plan the kitchen setup, and assess the technical requirements for equipment and facilities. You consider factors like kitchen efficiency, safety regulations, and adherence to health codes.
Financial Feasibility: You estimate the initial costs for leasing or purchasing a space, kitchen equipment, staff hiring, and marketing. Revenue projections are based on expected foot traffic, menu pricing, and seasonal variations.
Operational Feasibility: You create kitchen and service operations workflow diagrams, considering staff roles and responsibilities. Resource planning includes hiring chefs, waitstaff, and kitchen personnel. Scalability is evaluated for potential expansion or franchising.
Risk Analysis: Potential operational risks are identified, such as food safety concerns, labor shortages, or location-specific challenges. Risk mitigation strategies involve staff training, quality control measures, and contingency plans for unexpected events.

Example 2: Software Development Project

Now, let's explore the feasibility study process for a software development project, such as building a mobile app:

Market Feasibility: You analyze the mobile app market, identify your target audience, and assess the demand for a solution in a specific niche. You gather user feedback and conduct competitor analysis to understand the competitive landscape.
Technical Feasibility: You define the technical requirements for the app, considering platforms (iOS, Android), development tools, and potential integrations with third-party services. You evaluate the feasibility of implementing specific features.
Financial Feasibility: You estimate the development costs, including hiring developers, designers, and ongoing maintenance expenses. Revenue projections are based on app pricing, potential in-app purchases, and advertising revenue.
Operational Feasibility: You map out the development workflow, detailing the phases from concept to deployment. Resource planning includes hiring developers with the necessary skills, setting up development environments, and establishing a testing framework.
Risk Analysis: Potential risks like scope creep, technical challenges, or market saturation are assessed. Mitigation strategies involve setting clear project milestones, conducting thorough testing, and having contingency plans for technical glitches.

These examples demonstrate the versatility of feasibility studies across diverse projects. Whatever type of venture or endeavor you want to embark on, a well-structured feasibility study guides you toward informed decisions and increased project success.

In conclusion, conducting a feasibility study is a crucial step in your project's journey. It helps you assess the viability and potential risks, providing a solid foundation for informed decision-making. Remember, a well-executed feasibility study not only enables you to identify challenges but also uncovers opportunities that can lead to your project's success.

By thoroughly examining market trends, technical requirements, financial aspects, and operational considerations, you are better prepared to embark on your project confidently. With this guide, you've gained the knowledge and tools needed to navigate the intricate terrain of feasibility studies.

How to Conduct a Feasibility Study in Minutes?

Speed and precision are paramount for feasibility studies, and Appinio delivers just that. As a real-time market research platform, Appinio empowers you to seamlessly conduct your market research in a matter of minutes, putting actionable insights at your fingertips.

Here's why Appinio stands out as the go-to tool for feasibility studies:

Rapid Insights: Appinio's intuitive platform ensures that anyone, regardless of their research background, can effortlessly navigate and conduct research, saving valuable time and resources.
Lightning-Fast Responses: With an average field time of under 23 minutes for 1,000 respondents, Appinio ensures that you get the answers you need when you need them, making it ideal for time-sensitive feasibility studies.
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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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How to Prepare a Good Feasibility Report

Since good planning is a prerequisite for the survival and success of any business, we’ll like to discuss how to write or prepare a good Feasibility Report using a good feasibility report template .

Without proper planning, a business may head towards failure if corrective measures are not taken in time. A Feasibility Report is simply a Business Plan. Feasibility Report is a detailed study that examines the profitability, feasibility, and effectiveness of a proposed investment opportunity.

The report, no matter how elaborate, should be prepared before one undertakes any business or expands the existing one.

A feasibility report can be prepared by the prospective investor or consultancy firms who charge fees depending on the value of the project and how elaborate is the proposed investment opportunity. Based on the Feasibility Report, the entrepreneur can decide to accept or reject the project.

If the project is viable and acceptable, the entrepreneur has to estimate the initial capital outlay and decide on where and how to raise the funds.

The Uses of Feasibility Report

The Feasibility Report can be used by the entrepreneur in the following areas:

To meet the stipulated requirements of financial institutions. For instance, banks and other financial institutions giving loans to start business executives demand a Feasibility Report of the proposed investment.
To provide the basic information for effective decision-making with respect to the proposed investment. By showing the market potentialities, technical and financial implications of the proposed opportunities, the feasibility report enables the entrepreneur to accept or reject the project.
To assist the entrepreneur in developing future plans for the organization.
To serve as the basis for measuring the performance of the proposed business.

Components of a Feasibility Report

No two feasibility studies have identical components. However, there are certain critical aspects that must be present in a good feasibility report. Below are the feasibility report format

A typical feasibility report format is as below:

The nature of the business, Management, Teams, Financial and Economic Analysis, and Marketing plan. In other words, the major areas covered by the feasibility study can be divided into nine major areas namely:

Introduction
Description of the business
Market consideration – A preliminary Evaluation
Management Team
Technical Specifications and Production plan
Marketing Plans
Examination of the critical risks and problems
Financial and Economic plans
Evaluation and conclusion

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hi Mr olufisayo ! I am a student of FUT minna, I was writing a feasibility report when I came across your site. its really great. and I want to say thank you for that.

Thanks for the feedback. We are happy we could help.

In fact as I was reading through this, I envisaged Capital ‘A’ in entrepreneurship education. thanks to d authority of this work.

[…] How to Prepare a Good Feasibility Report with Format […]

I am in fact happy to read this web site post which consists of lots of useful information, thanks for providing these kinhds of data.

very insightful post. Kudos to the author

It was really awesome to have found your site cos I surf the Internet but I will say this site is well grounded and very knowledgeable, this site is the mother to great entrepreneurs Kudos and thanks cos you just extricated me from the dilemma of creating a feasible business plan.

please sir , I need the format of feasibility study with explanation. thanks

how can we write simple feasibility report ? anyone can help me because its my assignment

I so happy to see that you are doing a wonderful job here. I wish you could send me a feasibility study on yam production. Thanks

pls sir, i need a format of feasibility study of building a Multipurpose Hall (event center).

Please I need a feasibility study on cell phone business. I would be glad if the response swift.

i need a feasibility report on production of bread using the composition of groundnut shell flour and wheat flour, can you please help me out

Also, look at this Project Feasibility and Option Analysis Template to find out how to perform an analysis of alternative approaches.

Excellent web site you have here.. It’s difficult to find high quality writing like yours nowadays. I seriously appreciate individuals like you! Take care!!

Thanks for the site, I would like to know the contents of a feasibility study report and perhaps their descriptions as in Entrepreneurship..

I need a complete sample of feasibility report sample, because I was given an assignment to conduct a feasibility report of any business in Nigeria. It is urgent please help me out.

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Feasibility analysis for new businesses

Feasibility analysis involves assessing your new business idea in detail to determine if it will be viable. This can build on any initial research you've already done.

A feasibility analysis helps you consider the costs and activities required to set up and run a business, and how to make an informed decision about whether to start a business and how to do it.

Most importantly, it will give you a picture of the costs involved that you'll need to consider and the revenue and profit you can realistically expect to generate.

To determine if your business idea is practical and achievable, there are areas you can investigate and study.

Ask yourself these practical questions and how they relate to your situation as a starting point.

Is the business logistically achievable?
Does current technology meet your needs?
What are the risks?
How will your products or service differ from what is on the market?
What is the trajectory of the market?
Do you have the finances to make the business achievable?
Is there a time constraint for establishing the business?

How to analyse the feasibility of your business

To conduct a feasibility analysis, you will need a detailed understanding of:

your business idea, product or service
the nature of the market
the needs of your customers
the costs involved and the revenue you are forecasting
your business model and plan
the human resources and skills available to support the business.

A feasibility analysis – to provide details for a formal business plan – may be necessary when preparing a pitch to investors, lenders or potential partners for your business, and when applying for government funding.

Steps for feasibility analysis

Follow these steps to analyse the feasibility of your business.

the financial feasibility of starting the business (read below)
the legal requirements for operating it
the operational capacity as outlined in your business plan .
Research the industry, market, customers, business model and staffing – how will they affect the feasibility of your business?
Review your research findings to determine if the business idea, product or service is viable.

Types of feasibility analysis

There are different types of feasibility analysis that you can use. Each type will focus on a specific part of your business operations.

Use this type of analysis to determine if your business has adequate economic resources to meet its goals (e.g. funding, capital, profit).

What is the financial position of the business?
Is the business able to access necessary funding?
Can the business make a profit?
Does the business have enough money to meet its obligations?

Use this type of analysis to determine if your business successfully meets the necessary legal requirements to operate (e.g. business registrations, permits and licences).

Does the business have all relevant registrations, licences and permits in place?
Does the business have access to legal advice as necessary?

Use this type of analysis to determine if your business has the operational resources it requires to be successful (e.g. business structure, premises, suppliers, human resources and equipment).

Is the business structure confirmed?
Are the business premises and location suitable?
Does the business have access to a variety of suppliers?
Does the business have the necessary staffing and equipment to operate?

Include feasibility analysis in your business plan

The business plan template contains an action checklist that you can use to help assess your business's financial, legal and operational feasibility.

Read more about writing a business plan .

Financial viability

Financial viability is your business's capacity to generate enough income to meet its operating costs while maintaining required service levels.

Make sure you've calculated the costs required to start your business and that you have funds to cover these.

To assess the financial viability of your business, consider if your business:

is profitable
can give you an income, salary or return on investment
is meeting all business obligations
has adequate cash resources
could sustain operations through a phase of no profit.

Assessing your business's financial viability

You will need to:

calculate key profit figures
determine the break-even point of your business
develop a cash flow statement and use it to estimate how long the business can survive without making profit

Your cash flow, key profit figures and budget will contribute to your business plan. You might choose to compile this financial information yourself or work with a financial adviser.

For more information, see:

budgets and forecasts
cash flow management
working with accountants, bookkeepers and tax agents .

Starting lean

'Starting lean' describes the method for starting a business or introducing a product or service as efficiently as possible.

Starting lean can help you to determine the feasibility of your business while minimising costs, time commitment and resources.

Starting lean may involve:

scheduling a research phase early in your start-up preparation before the business opens or new product launches
starting with a concept or product that can be developed and tested quickly and at low cost – this will help you validate the level of demand in the market before making a larger financial commitment
continuing the testing phase for as long as necessary – viability increases when you make improvements between a series of tests, as opposed to a one-off test.

When the business concept, idea or product is validated, you can proceed to establishing your business.

Product and service viability

Product and service viability is a type of analysis that looks specifically at considerations associated with business products and services, rather than the business itself.

Product viability refers to the potential that business products have to generate demand in the market and be profitable.

To help you determine if a product is viable, consider the following:

Is the product safe?
Will the product fit into the market?
How quickly can we get the product into the market?
Does the current product need to be improved?
How will you manage the research and development?
Can you partner with industry or research partners to innovate?
Do you have the time and money available to innovate?
Is there a gap in the market for this product?
Do you have the funding to develop the new product?
How will you manage and protect intellectual property ?

Long-term viability of products and services

It can be beneficial to consider the long-term value of your business products or services when determining their viability and how much to invest in production or marketing.

Consider the following:

Will your products and services be viable in 5–10 years or will trends diminish their value?
Are the products and services dependent on other products and services (e.g. maintenance, parts, servicing requirements)? If so, will those still be available in 5–10 years?
Can your products and services adapt to industry changes and meet market needs in new ways in the future (e.g. integrate with new technologies, such as renewables)?
What capital requirements will be needed in the long term?
Will the potential income be worth the capital investment?

Customer needs now and in the future

Customers are the end-users of your products and services. Considering both the current and future needs of your customers is key to determining if your business idea, product or service is feasible.

To help ensure that your customer needs are met, consider:

conducting usability testing—the process of testing a product or design with a group of users that are representative of your target customers
implementing universal design principles—used to ensure products and services are accessible to the widest range of customers.

Customer feasibility checklist

You can use the following checklist to help you consider if your business idea, product or service will be feasible.

Will you conduct usability testing?
Will you apply universal design principles?
How will your pricing affect the size of the market?
How will competitors affect your price position in the market?
Will the customer need to purchase maintenance packages or pay for regular upgrades?

Business model considerations

A business model outlines the core attributes of a business. It defines the business products and services, target market and costs, and details a high-level strategy for how the business plans to make a profit.

You should consider the long-term operation of the business when assessing its feasibility – the business must be viable in the start-up phase and be able to maintain this viability into the future.

The ownership structure of the business – is it fit for purpose? Could it be changed to better suit your business goals?
The capital required from lenders or investors – what capital do you need to make your business profitable in the short and long term?
The distribution channels available – do you have channels available to distribute your products and services efficiently?
The potential to licence or sell products and services in the future – will you require specific licences to sell your products and services? Will you be able to meet the necessary requirements?
The future export potential – will you export your products or services? If so, are they any existing or potential trade barriers?

Choosing the ideal team

Part of analysing a business's feasibility is analysing its human resources. You should consider the attributes people, within and outside the business, should have to help your business succeed.

The owner or director is responsible for the business.
Are they the right person to manage and lead the business now and in the future?
Will they be the best person to help the business grow or will you need more people to provide support?
What kind of capital does your business need?
Equity partners might help you reach your business goals.
Make sure you have identified the amount of equity you are prepared to give to others before engaging in partnership discussions.
Your staff are vital to your business success.
Both managers and general staff are needed to lead and operate the business.
Think about the staff you have and the staff you may need in the future.
Independent contractors can help you meet specialist needs in both the short and long term.
Consider the potential skills gaps within your business and opportunities for outsourcing.

Other key people may benefit your business and help you build capacity for growth and improvement, such as:

researchers
financial advisers
intellectual property specialists
accountants
bookkeepers
IT specialists
advertising and marketing managers.

Also consider...

Learn about marketing and customer research .
Understand the process of researching customers .
Read customer stories from the Entrepreneurs’ Programme .
Find out about Australian Government grants and programs .
Read about the Advance Queensland initiative .
Get export support .
Learn about grants for innovation .
Take the business readiness health check .
Understand patents .
Last reviewed: 10 Oct 2022
Last updated: 10 Oct 2022

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What Is a Feasibility Study? How to Conduct One for Your Project

Why is a feasibility study so important in project management? For one, the feasibility study or feasibility analysis is the foundation upon which your project plan resides. That’s because the feasibility analysis determines the viability of your project. Now that you know the importance, read on to learn what you need to know about feasibility studies.

What Is a Feasibility Study?

A feasibility study is simply an assessment of the practicality of a proposed project plan or method. This is done by analyzing technical, economic, legal, operational and time feasibility factors. Just as the name implies, you’re asking, “Is this feasible?” For example, do you have or can you create the technology that accomplishes what you propose? Do you have the people, tools and resources necessary? And, will the project get you the ROI you expect?

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Feasibility study template

Use this free Feasibility Study Template for Word to manage your projects better.

What’s the Importance of a Feasibility Study?

A project feasibility study should be done during the project management life cycle after the business case has been completed. So, that’s the “what” and the “when” but how about the “why?” Why is it important to conduct a feasibility study?

An effective feasibility study points a project in the right direction by helping decision-makers have a holistic view of the potential benefits, disadvantages, barriers and constraints that could affect its outcome. The main purpose of a feasibility study is to determine whether the project can be not only viable but also beneficial from a technical, financial, legal and market standpoint.

What Is Included in a Feasibility Study Report?

The findings of your project feasibility study are compiled in a feasibility report that usually includes the following elements.

Executive summary
Description of product/service
Technology considerations
Product/service marketplace
Marketing strategy
Organization/staffing
Financial projections
Findings and recommendations

Free Feasibility Study Template

Use this free feasibility study template for Word to begin your own feasibility study. It has all the fundamental sections for you to get started, and it’s flexible enough to adapt to your specific needs. Download yours today.

Types of Feasibility Study

There are many things to consider when determining project feasibility, and there are different types of feasibility studies you might conduct to assess your project from different perspectives.

Pre-Feasibility Study

A pre-feasibility study, as its name suggests, it’s a process that’s undertaken before the feasibility study. It involves decision-makers and subject matter experts who will prioritize different project ideas or approaches to quickly determine whether the project has fundamental technical, financial, operational or any other evident flaws. If the project proposal is sound, a proper feasibility study will follow.

Technical Feasibility Study

A technical feasibility study consists in determining if your organization has the technical resources and expertise to meet the project requirements . A technical study focuses on assessing whether your organization has the necessary capabilities that are needed to execute a project, such as the production capacity, facility needs, raw materials, supply chain and other inputs. In addition to these production inputs, you should also consider other factors such as regulatory compliance requirements or standards for your products or services.

Economic Feasibility Study

Also called financial feasibility study, this type of study allows you to determine whether a project is financially feasible. Economic feasibility studies require the following steps:

Before you can start your project, you’ll need to determine the seed capital, working capital and any other capital requirements, such as contingency capital. To do this, you’ll need to estimate what types of resources will be needed for the execution of your project, such as raw materials, equipment and labor.
Once you’ve determined what project resources are needed, you should use a cost breakdown structure to identify all your project costs.
Identify potential sources of funding such as loans or investments from angel investors or venture capitalists.
Estimate the expected revenue, profit margin and return on investment of your project by conducting a cost-benefit analysis , or by using business forecasting techniques such as linear programming to estimate different future outcomes under different levels of production, demand and sales.
Estimate your project’s break-even point.
Conduct a financial benchmark analysis with industrial averages and specific competitors in your industry.
Use pro forma cash flow statements, financial statements, balance sheets and other financial projection documents.

Cost-benefit analysis template Free download

Legal Feasibility Study

Your project must meet legal requirements including laws and regulations that apply to all activities and deliverables in your project scope . In addition, think about the most favorable legal structure for your organization and its investors. Each business legal structure has advantages and disadvantages when it comes to liability for business owners, such as limited liability companies (LLCs) or corporations, which reduce the liability for each business partner.

Market Feasibility Study

A market feasibility study determines whether your project has the potential to succeed in the market. To do so, you’ll need to analyze the following factors:

Industry overview: Assess your industry, such as year-over-year growth, identify key direct and indirect competitors, availability of supplies and any other trends that might affect the future of the industry and your project.
SWOT analysis: A SWOT analysis allows organizations to determine how competitive an organization can be by examining its strengths, weaknesses and the opportunities and threats of the market. Strengths are the operational capabilities or competitive advantages that allow an organization to outperform its competitors such as lower costs, faster production or intellectual property. Weaknesses are areas where your business might be outperformed by competitors. Opportunities are external, such as an underserved market, an increased demand for your products or favorable economic conditions. Threats are also external factors that might affect your ability to do well in the market such as new competitors, substitute products and new technologies.
Market research: The main purpose of market research is to determine whether it’s possible for your organization to enter the market or if there are barriers to entry or constraints that might affect your ability to compete. Consider variables such as pricing, your unique value proposition, customer demand, new technologies, market trends and any other factors that affect how your business will serve your customers. Use market research techniques to identify your target market, create buyer personas, assess the competitiveness of your niche and gauge customer demand, among other things.

7 Steps to Do a Feasibility Study

If you’re ready to do your own feasibility study, follow these 7 steps. You can use this free feasibility study template to help you get started.

1. Conduct a Preliminary Analysis

Begin by outlining your project plan . You should focus on an unserved need, a market where the demand is greater than the supply and whether the product or service has a distinct advantage. Then, determine if the feasibility factors are too high to clear (i.e. too expensive, unable to effectively market, etc.).

2. Prepare a Projected Income Statement

This step requires working backward. Start with what you expect the income from the project to be and then what project funding is needed to achieve that goal. This is the foundation of an income statement. Factor in what services are required and how much they’ll cost and any adjustments to revenues, such as reimbursements, etc.

Related: Free Project Management Templates

3. Conduct a Market Survey or Perform Market Research

This step is key to the success of your feasibility study, so make your market analysis as thorough as possible. It’s so important that if your organization doesn’t have the resources to do a proper one, then it is advantageous to hire an outside firm to do so.

Market research will give you the clearest picture of the revenues and return on investment you can realistically expect from the project. Some things to consider are the geographic influence on the market, demographics, analyzing competitors, the value of the market and what your share will be and if the market is open to expansion (that is, in response to your offer).

4. Plan Business Organization and Operations

Once the groundwork of the previous steps has been laid, it’s time to set up the organization and operations of the planned project to meet its technical, operational, economic and legal feasibility factors. This isn’t a superficial, broad-stroke endeavor. It should be thorough and include start-up costs, fixed investments and operating costs. These costs address things such as equipment, merchandising methods, real estate, personnel, supply availability, overhead, etc.

5. Prepare an Opening Day Balance Sheet

This includes an estimate of the assets and liabilities, one that should be as accurate as possible. To do this, create a list that includes items, sources, costs and available financing. Liabilities to consider are such things as leasing or purchasing land, buildings and equipment, financing for assets and accounts receivables.

6. Review and Analyze All Data

All of these steps are important, but the review and analysis are especially important to ensure that everything is as it should be and that nothing requires changing or tweaking. Take a moment to look over your work one last time.

Reexamine your previous steps, such as the income statement, and compare them with your expenses and liabilities. Is it still realistic? This is also the time to think about risk and come up with any contingency plans .

7. Make a Go/No-Go Decision

You’re now at the point to make a decision about whether or not the project is feasible. That sounds simple, but all the previous steps lead to this decision-making moment. A couple of other things to consider before making that binary choice are whether the commitment is worth the time, effort and money and whether it aligns with the organization’s strategic goals and long-term aspirations.

Feasibility Study Examples

Here are some simple feasibility study examples so you have a better idea of what a feasibility study is used for in different industries.

Construction Feasibility Study

For this construction feasibility study example, let’s imagine a large construction company that’s interested in starting a new project in the near future to generate profits.

Pre-Feasibility Study: The first step is to conduct a preliminary feasibility study. It can be as simple as a meeting where decision-makers will prioritize projects and discuss different project ideas to determine which poses a bigger financial benefit for the organization.
Technical Feasibility Study: Now it’s time to estimate what resources are needed to execute the construction project, such as raw materials, equipment and labor. If there’s work that can’t be executed by the company with its current resources, a subcontractor will be hired to fill the gap.
Economic Feasibility Study: Once the construction project management team has established what materials, equipment and labor are needed, they can estimate costs. Cost estimators use information from past projects, construction drawings and documents such as a bill of quantities to come up with an accurate cost estimate. Then, based on this estimate, a profit margin and financial forecasts will be analyzed to determine if there’s economic feasibility.
Legal Feasibility Study: Now the company needs to identify all potential regulations, building codes and laws that might affect the project. They’ll need to ask for approval from the local government so that they can begin the construction project .
Market Feasibility Study: Market feasibility will be determined depending on the nature of the project. For this feasibility example, let’s assume a residential construction project will be built. To gauge market potential, they’ll need to analyze variables such as the average income of the households in the city, crime rate, population density and any trends in state migration.

Manufacturing Feasibility Study

Another industry that uses feasibility studies is manufacturing. It’s a test run of the steps in the manufacturing production cycle to ensure the process is designed properly. Let’s take a look at what a manufacturing feasibility study example would look like.

Feasibility Study: The first step is to look at various ideas and decide which is the best one to pursue. You don’t want to get started and have to stop. That’s a waste of time, money and effort. Look at what you intend to manufacture, does it fill an unserved need, is the market able to support competition and can you manufacture a quality product on time and within your budget?
Financial Feasibility Study: Find out if your estimated income from the sale of this product is going to cover your costs, both direct and indirect costs. Work backward from the income you expect to make and the expenses you’ll spend for labor, materials and production to determine if the manufacturing of this product is financially feasible.
Market Feasibility Study: You’ve already determined that there’s a need that’s not being served, but now it’s time to dig deeper to get realistic projections of revenue. You’ll want to define your target demographic, analyze the competitive landscape, determine the total market volume and what your market share will be and estimate what market expansion opportunities there are.
Technical Feasibility Study: This is where you’ll explore the production , such as what resources you’ll need to produce your product. These findings will inform your financial feasibility study as well as labor, material, equipment, etc., costs have to be within your budget. You’ll also figure out the processes you’ll use to produce and deliver your product to the market, including warehousing and retail distribution.

There could be other feasibility studies you’ll have to make depending on the product and the market, but these are the essential ones that all manufacturers have to look at before they can make an educated decision as to whether to go forward or abandon the idea.

Best Practices for a Feasibility Study

Use project management software like ProjectManager to organize your data and work efficiently and effectively
Use templates or any data and technology that gives you leverage
Involve the appropriate stakeholders to get their feedback
Use market research to further your data collection
Do your homework and ask questions to make sure your data is solid

If your project is feasible, then the real work begins. ProjectManager helps you plan more efficiently. Our online Gantt chart organizes tasks, sets deadlines, adds priority and links dependent tasks to avoid delays. But unlike other Gantt software, we calculate the critical path for you and set a baseline to measure project variance once you move into the execution phase.

ProjectManager's Gantt chart is ideal for tracking feasibility studies

Watch a Video on Feasibility Studies

There are many steps and aspects to a project feasibility study. If you want yours to be accurate and forecast correctly whether your project is doable, then you need to have a clear understanding of all its moving parts.

Jennifer Bridges, PMP, is an expert on all aspects of project management and leads this free training video to help you get a firm handle on the subject.

Here’s a screenshot for your reference!

feasibility study definition and template

Pro tip: When completing a feasibility study, it’s always good to have a contingency plan that you test to make sure it’s a viable alternative.

ProjectManager Improves Your Feasibility Study

A feasibility study is a project, so get yourself a project management software that can help you execute it. ProjectManager is an award-winning software that can help you manage your feasibility study through every phase.

Once you have a plan for your feasibility study, upload that task list to our software and all your work is populated in our online Gantt chart. Now you can assign tasks to team members, add costs, create timelines, collect all the market research and attach notes at the task level. This gives people a plan to work off of, and a collaborative platform to collect ideas and comments.

ProjectManager's Gantt chart, ideal to track your feasibility study

If you decide to implement the project, you already have it started in our software, which can now help you monitor and report on its progress. Try it for yourself with this free 30-day trial.

Transcription

Today we’re talking about How to Conduct A Feasibility Study, but first of all, I want to start with clarifying what a feasibility study is.

Feasibility Analysis Definition

Basically, it’s an assessment of the practicality of a proposed plan or method. Basically, we’ll want to want to know, is this feasible. Some of the questions that may generate this or we can hear people asking are, “Do we have or can we create the technology to do this? Do we have the people resource who can produce this and will we get our ROI, our Return On Investment?”

When to Do a Feasibility Study

So when do we do the feasibility study? So it’s done during a project lifecycle and it’s done after the business case because the business case outlines what we’re proposing. Is it a product or service that we’re proposing?

So why do we do this? The reason we do this is that we need to determine the factors that will make the business opportunity a success.

How to Conduct a Feasibility Study

Well, let’s talk about a few steps that we do in order to conduct the feasibility study.

Well, first of all, we conduct a preliminary analysis of what all’s involved in the business case and what we’re analyzing and what we’re trying to determine is feasible.

Then we prepare a projected income statement. We need to know what are the income streams, how are we gonna make money on this. Where’s the revenue coming from? We also need to conduct a market survey.

We need to know, is this a demand? Is there a market for this? Are customers willing to use this product or use this service?

The fourth one is to plan the business organization and operations. What is the structure, what kind of resources do we need? What kind of staffing requirements do we have?

We also want to prepare an opening day balance sheet. What are the…how again, what are the expenses, what’s the revenue and to ensure that being able to determine if we’re gonna make our ROI.

So we want to review and analyze all of the data that we have and with that, we’re going to determine, we’re going to make a go, no-go decision. Meaning, are we going to do this project or this business opportunity or not.

Well, here are some of the best practices to use during your feasibility study.

One is to use templates, tools and surveys that exist today. The great news is, data is becoming more and more prevalent. There are all kinds of technologies. There are groups that they do nothing but research. Things that we can leverage today.

We want to involve the appropriate stakeholders to ensure that input is being considered from the different people involved.

We also want to use again the market research to ensure we’re bringing in good, reliable data.

Do your homework, meaning act like is if this is your project, if it’s your money. So do your homework and do it well and make sure you give credible data.

What Is a Feasibility Report?

So ultimately in the end what we’re doing is, we’re producing and we’re providing a feasibility report. So in that report, think of this is like a template.

So what you’re gonna do is give it an executive summary of the business opportunity that you’re evaluating and the description of the product or the service.

You want to look at different technology considerations. Is it technology that you’re going to use? Are you going to build the technology?

What kind of product and service marketplace and being able again, to identify the specific market you’re going to be targeting? Also, what is the marketing strategy you’re going to use to target the marketplace?

And also what’s the organizational structure? What are the staffing requirements? What people do you need to deliver the product or service and even support it?

So also we want to know the schedule to be able to have the milestones to ensure that as we’re building things, that as we’re spending money that we’re beginning to bring in income to pay and knowing when we’re going to start recuperating some of the funding. Again, which also ties into the financial projections.

Ultimately in this report, you’re going to provide the findings and the recommendations.

Again, we’ll probably talk about technology. Are you going to build it? Are you going to buy it? What are the marketing strategies for the specific marketplace organization? You may have some recommendations for whether you’re going to insource the staff, maybe you are going to outsource some staff and what that looks like and also financial recommendation.

If you’ve been looking for an all-in-one tool that can help with your feasibility study, consider ProjectManager. We offer five project views and countless features that make it seamless to plan projects, organize tasks and stay connected with your team. See what our software can do for you by taking this free 30-day trial.

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What is a feasibility study, understanding a feasibility study, types of feasibility study, importance of feasibility study, benefits of a feasibility study, what is included in a feasibility study report, tools for conducting a feasibility study, examples of a feasibility study, what is the purpose of a feasibility study, how do you write a feasibility study, 7 steps to do a feasibility study, how to conduct a feasibility study, feasibility study vs. business plan, reasons to do or not to do a feasibility study, enroll today with these pgp on project management to enhance your skills, what is a feasibility study a comprehensive guide.

Reviewed and fact-checked by Sayantoni Das

The growth and recognition of project management training have changed significantly over the past few years, and these changes are expected to continue and expand. And with the rise of project management comes the need for a feasibility study.

It can be thrilling to start a complex, large-scale project with a significant impact on your company. You are creating real change. Failure can be scary. This article will help you get started if you have never done a feasibility study on project management.

Getting certified as a project management professional is simple with Simplilearn's PMP Certification . Take advantage of this opportunity by enrolling now.

A feasibility study is a comprehensive evaluation of a proposed project that evaluates all factors critical to its success in order to assess its likelihood of success. Business success can be defined primarily in terms of ROI, which is the amount of profits that will be generated by the project.

A feasibility study evaluates a project's or system's practicality. As part of a feasibility study, the objective and rational analysis of a potential business or venture is conducted to determine its strengths and weaknesses, potential opportunities and threats, resources required to carry out, and ultimate success prospects. Two criteria should be considered when judging feasibility: the required cost and expected value.

As the name implies, a feasibility analysis is used to determine the viability of an idea, such as ensuring a project is legally and technically feasible as well as economically justifiable. It tells us whether a project is worth the investment—in some cases, a project may not be doable. There can be many reasons for this, including requiring too many resources, which not only prevents those resources from performing other tasks but also may cost more than an organization would earn back by taking on a project that isn’t profitable.

A well-designed study should offer a historical background of the business or project, such as a description of the product or service, accounting statements, details of operations and management, marketing research and policies, financial data, legal requirements, and tax obligations. Generally, such studies precede technical development and project implementation.

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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.
Digital Project Manager: This program will help you move from technical to managerial positions. This certification is recognized internationally and can open up exciting career opportunities in IT management.
Post Graduate Program in Project Management: This project management certification course aligns with PMI-PMP(r) and IASSC -Lean Six Sigma. You can attend live online interactive classes and masterclasses.

Program Name PMP® Certification Training Course PMP Plus Post Graduate Program In Project Management glyph Icons All Geos All Geos All Geos University PMI Simplilearn University of Massachusetts Amherst Course Duration 90 Days of Flexible Access to Online Classes 36 Months 6 Months Coding experience reqd No No No Skills you wll learn 8+ PM skills including Work Breakdown Structure, Gantt Charts, Resource Allocation, Leadership and more. 6 courses including Project Management, Agile Scrum Master, Implementing a PMO, and More 9+ skills including Project Management, Quality Management, Agile Management, Design Thinking and More. Additional Benefits -Experiential learning through case studies -Global Teaching Assistance -35PDUs -Learn by working on real-world problems -24x7 Learning support from mentors -Earn 60+ PDU’s -3 year course access Cost $$ $$$$ $$$$ Explore Program Explore Program Explore Program

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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CHAPTER 4 PRODUCTION FEASIBILITY

This chapter discusses about the processes of production and activities of the proposed business. It states also the machineries and equipment used in service and other aspects to satisfy the customers. Project layout, size and production schedule are all presented for the purpose of identifying the business operation. It also provides the analysis of technical aspect of the proposed business. The technical aspect helps to determine the capacity of the project. The technical study will provide information in service activity and the raw materials to be used in providing activity this product as well as their resources. It is also determine the utilities and equipment to be acquired in showing the location and layout of the project.

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Production Company Business Plan Template

Written by Dave Lavinsky

Production Company Business Plan

Over the past 20+ years, we have helped over 500 entrepreneurs and business owners create business plans to start and grow their production companies.

If you’re unfamiliar with creating a production company business plan, you may think creating one will be a time-consuming and frustrating process. For most entrepreneurs it is, but for you, it won’t be since we’re here to help. We have the experience, resources, and knowledge to help you create a great business plan.

In this article, you will learn some background information on why business planning is important. Then, you will learn how to write a production company business plan step-by-step so you can create your plan today.

Download our Ultimate Business Plan Template here >

What is a Production Company Business Plan?

A business plan provides a snapshot of your production company as it stands today, and lays out your growth plan for the next five years. It explains your business goals and your strategies for reaching them. It also includes market research to support your plans.

Why You Need a Business Plan for a Production Company

If you’re looking to start a production company or grow your existing production company, you need a business plan. A business plan will help you raise funding, if needed, and plan out the growth of your production company to improve your chances of success. Your production company business plan is a living document that should be updated annually as your company grows and changes.

Sources of Funding for Production Companies

With regards to funding, the main sources of funding for a production company are personal savings, credit cards, bank loans, and angel investors. When it comes to bank loans, banks will want to review your business plan and gain confidence that you will be able to repay your loan and interest. To acquire this confidence, the loan officer will not only want to ensure that your financials are reasonable, but they will also want to see a professional plan. Such a plan will give them the confidence that you can successfully and professionally operate a business. Personal savings and bank loans are the most common funding paths for production companies.

Finish Your Business Plan Today!

How to write a business plan for a production company.

If you want to start a production company or expand your current one, you need a business plan. The guide below details the necessary information for how to write each essential component of your production company business plan.

Executive Summary

Your executive summary provides an introduction to your business plan, but it is normally the last section you write because it provides a summary of each key section of your plan.

The goal of your executive summary is to quickly engage the reader. Explain to them the kind of production company you are running and the status. For example, are you a startup, do you have a production company that you would like to grow, or are you operating a chain of production companies?

Next, provide an overview of each of the subsequent sections of your plan.

Give a brief overview of the production industry.
Discuss the type of production company you are operating.
Detail your direct competitors. Give an overview of your target customers.
Provide a snapshot of your marketing strategy. Identify the key members of your team.
Offer an overview of your financial plan.

Company Overview

In your company overview, you will detail the type of production company you are operating.

For example, your production company might specialize in one of the following types of production companies:

Feature Film Production Company : this type of production company handles all of the necessities that go with producing a major film – hiring on-screen and off-screen talent, writers, musicians, location scouts, a team for pre-production, post-production, legal, etc.
Commercial Production Company: this type of production company can produce stock footage, short corporate videos, training videos, and creative projects such as music videos and short films
Post Production Company: this type of production company handles video editing, special effects, color correction, sound mixing, and editing to eventually produce the final video.
Niche Production Company: this type of production company focuses on one specific niche that it has perfected. They often combine the best of animation, commercial, and post-production companies.

In addition to explaining the type of production company you will operate, the company overview needs to provide background on the business.

Include answers to questions such as:

When and why did you start the business?
What milestones have you achieved to date? Milestones could include the number of clients served, the number of films with positive reviews, reaching X number of clients served, etc.
Your legal business structure. Are you incorporated as an S-Corp? An LLC? A sole proprietorship? Explain your legal structure here.

Industry Analysis

In your industry or market analysis, you need to provide an overview of the production industry.

While this may seem unnecessary, it serves multiple purposes.

First, researching the production industry educates you. It helps you understand the market in which you are operating.

Secondly, market research can improve your marketing strategy, particularly if your analysis identifies market trends.

The third reason is to prove to readers that you are an expert in your industry. By conducting the research and presenting it in your plan, you achieve just that.

The following questions should be answered in the industry analysis section of your production company business plan:

How big is the production industry (in dollars)?
Is the market declining or increasing?
Who are the key competitors in the market?
Who are the key suppliers in the market?
What trends are affecting the industry?
What is the industry’s growth forecast over the next 5 – 10 years?
What is the relevant market size? That is, how big is the potential target market for your production company? You can extrapolate such a figure by assessing the size of the market in the entire country and then applying that figure to your local population.

Customer Analysis

The customer analysis section of your production company business plan must detail the customers you serve and/or expect to serve.

The following are examples of customer segments: individuals, companies, filmmakers, studios.

As you can imagine, the customer segment(s) you choose will have a great impact on the type of production company you operate. Clearly, small businesses would respond to different marketing promotions than filmmakers, for example.

Try to break out your target customers in terms of their demographic and psychographic profiles. With regards to demographics, including a discussion of the ages, genders, locations, and income levels of the potential customers you seek to serve.

Psychographic profiles explain the wants and needs of your target customers. The more you can recognize and define these needs, the better you will do in attracting and retaining your customers.

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Competitive Analysis

Your competitive analysis should identify the indirect and direct competitors your business faces and then focus on the latter.

Direct competitors are other production companies.

Indirect competitors are other options that customers have to purchase from that aren’t directly competing with your product or service. This includes social media platforms, web developers, apps and even college or university students. You need to mention such competition as well.

For each such competitor, provide an overview of their business and document their strengths and weaknesses. Unless you once worked at your competitors’ businesses, it will be impossible to know everything about them. But you should be able to find out key things about them such as

What types of clients do they serve?
What type of production company are they?
What is their pricing (premium, low, etc.)?
What are they good at?
What are their weaknesses?

With regards to the last two questions, think about your answers from the customers’ perspective. And don’t be afraid to ask your competitors’ customers what they like most and least about them.

The final part of your competitive analysis section is to document your areas of competitive advantage. For example:

Will you provide concierge services or customized packages for your clients?
Will you offer products or services that your competition doesn’t?
Will you provide better customer service?
Will you offer better pricing?

Think about ways you will outperform your competition and document them in this section of your plan.

Marketing Plan

Traditionally, a marketing plan includes the four P’s: Product, Price, Place, and Promotion. For a production company business plan, your marketing strategy should include the following:

Product : In the product section, you should reiterate the type o f production company that you documented in your company overview. Then, detail the specific products or services you will be offering. For example, will you provide video editing, music editing, pre-production, or post-production services?

Price : Document the prices you will offer and how they compare to your competitors. Essentially in the product and price sub-sections of yo ur plan, yo u are presenting the products and/or services you offer and their prices.

Place : Place refers to the site of your production company. Document where your company is situated and mention how the site will impact your success. For example, is your production company located in New York or Los Angeles, a business district, a standalone office, or purely online? Discuss how your site might be the ideal location for your customers.

Promotions : The final part of your production company marketing plan is where you will document how you will drive potential customers to your location(s). The following are some promotional methods you might consider:

Be part of filmmaker associations and networks
Reach out to websites
Distribute flyers
Engage in email marketing
Advertise on social media platforms
Improve the SEO (search engine optimization) on your website for targeted keywords

Operations Plan

While the earlier sections of your business plan explained your goals, your operations plan describes how you will meet them. Your operations plan should have two distinct sections as follows.

Everyday short-term processes include all of the tasks involved in running your production company , including client communication and interaction, planning and producing production services, billing clients, etc.

Long-term goals are the milestones you hope to achieve. These could include the dates when you expect to book your Xth client, or when you hope to reach $X in revenue. It could also be when you expect to expand your production company to a new city.

Management Team

To demonstrate your production company’s potential to succeed, a strong management team is essential. Highlight your key players’ backgrounds, emphasizing those skills and experiences that prove their ability to grow a company.

Ideally, you and/or your team members have direct experience in managing production companies. If so, highlight this experience and expertise. But also highlight any experience that you think will help your business succeed.

If your team is lacking, consider assembling an advisory board. An advisory board would include 2 to 8 individuals who would act as mentors to your business. They would help answer questions and provide strategic guidance. If needed, look for advisory board members with experience in managing a production company or successfully running a small filmmaking company.

Financial Plan

Your financial plan should include your 5-year financial statement broken out both monthly or quarterly for the first year and then annually. Your financial statements include your income statement, balance s heet, and cash flow statements.

Income Statement

An income statement is more commonly called a Profit and Loss statement or P&L. It shows your revenue and then subtracts your costs to show whether you turned a profit or not.

In developing your income statement, you need to devise assumptions. For example, will you book 5 films or videos per day, and/or offer production packages ? And will sales grow by 2% or 10% per year? As you can imagine, your choice of assumptions will greatly impact the financial forecasts for your business. As much as possible, conduct research to try to root your assumptions in reality.

Balance Sheets

Balance sheets show your assets and liabilities. While balance sheets can include much information, try to simplify them to the key items you need to know about. For instance, if you spend $50,000 on building out your production company, this will not give you immediate profits. Rather it is an asset that will hopefully help you generate profits for years to come. Likewise, if a lender writes you a check for $50,000, you don’t need to pay it back immediately. Rather, that is a liability you will pay back over time.

Cash Flow Statement

Your cash flow statement will help determine how much money you need to start or grow your business, and ensure you never run out of money. What most entrepreneurs and business owners don’t realize is that you can turn a profit but run out of money and go bankrupt.

When creating your Income Statement and Balance Sheets be sure to include several of the key costs needed in starting or growing a production company:

Cost of equipment and production studio supplies
Payroll or salaries paid to staff
Business insurance
Other start-up expenses (if you’re a new business) like legal expenses, permits, computer software, and equipment

Attach your full financial projections in the appendix of your plan along with any supporting documents that make your plan more compelling. For example, you might include your studio location lease or a list of production services you plan to offer.

Writing a business plan for your production company is a worthwhile endeavor. If you follow the template above, by the time you are done, you will truly be an expert. You will understand the production industry, your competition, and your customers. You will develop a marketing strategy and will understand what it takes to launch and grow a successful production company.

Don’t you wish there was a faster, easier way to finish your Production Company business plan?

OR, Let Us Develop Your Plan For You

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Feasibility studies and business plans

Bankers and equity investors are becoming increasingly focused on getting good insights into companies that they are involved with. Usually, companies need to have a business plan and a financial model – so that there is an external view of the business prepared to international standards and in an international format.

PwC team is ready to help you develop your business plans and conduct feasibility studies to adapt to new market conditions and gain visibility of the future.

You are developing and expanding business and third-party support requires a standardised presentation of your business, so that your deal can be properly understood and compared with others.
Your business partners or investors require a third-party review.
You need advice and guidance from a professional team who understands your business and can present it externally, such as rehearsing the questions you will face and improving the robustness of the plan throughout the process.

As a result of our services:

You execute transactions quicker, easier, and likely with broader access to market participants for both debt and equity.
You present a stronger proposition to your market – our involvement leads clients to a better understanding of their business, and often inspires them to change their approach.

Solutions offered by PwC

Business plan development and monitoring, ensuring compliance, independent assessment of business plan assumptions.

We manage the production of business plans in a standard format, as expected and required by investors and bankers. Our business plan development solutions include: (1) External analysis (business environment analysis, industry background, market analysis, competitor analysis); (2) Business analysis (e.g. health checks); (3) Business / cash flow plan; (4) Action(able) plans.

We ensure compliance with the requirements of Latvian and international institutions – whether these are state banks, private banks, export credit agencies or international commercial banks.

We work closely with commercial due diligence teams who can provide independent assessment of business plan assumptions, and support plans with market analysis, forecasts and commentaries.

Full range of consulting services

Raimonds Dauksts

Director, Head of Advisory, PwC Latvia

Roberts Berzins, CFA

Manager, Management Consulting, PwC Latvia

Silga Gintere

Līga Vilkāja

Project manager in Advisory, PwC Latvia

Tel: +371 6709 4400

Ramona Daukste

© 2018 - 2024 PwC. All rights reserved. PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see www.pwc.com/structure for further details.

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Feasibility Analysis
How to make Manufacturing Feasibility Study?
What is a feasibility study? Definition and examples
How to Write a Feasibility Business Plan
How to Determine the Feasibility of a Business Idea?
Feasibility Study Templates For Different Projects Production Costs And

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Writing a Feasibility Study / Business Plan
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COMMENTS

Production Plan in Business Plan: A Comprehensive Guide to Succes
A production plan serves as a roadmap that outlines the steps, resources, and strategies required to manufacture products or deliver services efficiently. By carefully crafting a production plan within a business plan, entrepreneurs can ensure optimal utilisation of resources, timely delivery, cost efficiency, and customer satisfaction.
How to conduct a feasibility study: Template and examples
Here are some basic steps to conduct and report a feasibility study for major product opportunities or features: 1. Clearly define the opportunity. Imagine your user base is facing a significant problem that your product doesn't solve. This is an opportunity.
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.
Examples of Business Feasibility Reports
A feasibility study starts with a description of the products or services to be marketed, and it outlines a model of how the business intends to make a profit. It describes the types and quality ...
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 ...
5.11.4: 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 $\PageIndex{2}$: An analysis of financial feasibility focuses on expenses, cash flow, and projected revenue.
11.3 Conducting a Feasibility Analysis
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 .
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.
10 Feasibility study and business plan differences you should know
Feasibility study and business plan differences are subtle. In this post we will discuss 10 differences will help you to evaluate and differentiate between a feasibility study and a business plan. ... Assists in cost estimation, describe the production site, required inputs, and sourcing region. Physical description of the factory, including ...
How To Make A Business Plan: Step By Step Guide
The steps below will guide you through the process of creating a business plan and what key components you need to include. 1. Create an executive summary. Start with a brief overview of your entire plan. The executive summary should cover your business plan's main points and key takeaways.
Feasibility Study
A feasibility study is part of the initial design stage of any project/plan. It is conducted in order to objectively uncover the strengths and weaknesses of a proposed project or an existing business. It can help to identify and assess the opportunities and threats present in the natural environment, the resources required for the project, and ...
What is a Feasibility Study and How to Conduct It? (+ Examples)
A feasibility study is a systematic and comprehensive analysis of a proposed project or business idea to assess its viability and potential for success. It involves evaluating various aspects such as market demand, technical feasibility, financial viability, and operational capabilities.
Feasibility study: definition, benefits and differences with a Business
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.
How to Write a Good Feasibility Report (Format & Template)
Below are the feasibility report format. A typical feasibility report format is as below: The nature of the business, Management, Teams, Financial and Economic Analysis, and Marketing plan. In other words, the major areas covered by the feasibility study can be divided into nine major areas namely: Introduction. Description of the business.
Feasibility analysis for new businesses
To conduct a feasibility analysis, you will need a detailed understanding of: your business idea, product or service. the nature of the market. the needs of your customers. the costs involved and the revenue you are forecasting. your business model and plan. the human resources and skills available to support the business.
Feasibility analysis and business plan
1. Introduction. A feasibility study is an analysis that considers all of a project's relevant factors—including economic, legal, technical, and scheduling considerations—to ascertain the likelihood of completing the business project successfully [1].. "The feasibility study is a procedure to predict an outcome of an investigation examination, or assessment of a planned scheme along ...
What Is a Feasibility Study? How to Conduct One for Your Project
3. Conduct a Market Survey or Perform Market Research. This step is key to the success of your feasibility study, so make your market analysis as thorough as possible. It's so important that if your organization doesn't have the resources to do a proper one, then it is advantageous to hire an outside firm to do so.
How to Conduct a Feasibility Study: Key Steps & Examples
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 ...
(DOC) CHAPTER 4 PRODUCTION FEASIBILITY
CHAPTER 4 PRODUCTION FEASIBILITY. Dan Christian Jani. This chapter discusses about the processes of production and activities of the proposed business. It states also the machineries and equipment used in service and other aspects to satisfy the customers. Project layout, size and production schedule are all presented for the purpose of ...
Production Company Business Plan Template
Production Company Business Plan. Over the past 20+ years, we have helped over 500 entrepreneurs and business owners create business plans to start and grow their production companies. If you're unfamiliar with creating a production company business plan, you may think creating one will be a time-consuming and frustrating process.
Feasibility Study
A feasibility study is an assessment of the practicality of a proposed plan or project. A feasibility study analyzes the viability of a project to determine whether the project or venture is ...
Feasibility studies and business plans
Feasibility studies and business plans. Bankers and equity investors are becoming increasingly focused on getting good insights into companies that they are involved with. Usually, companies need to have a business plan and a financial model - so that there is an external view of the business prepared to international standards and in an ...

Production Plan in Business Plan: A Comprehensive Guide to Success

Key Takeaways on Production Plans in Business Planning

What is a Production Plan?

Why is a Production Plan Important in a Business Plan?

Key Components of a Production Plan

Demand Forecasting

Capacity Planning

Inventory Management

Resource Allocation

Quality Assurance

Strategies for Developing an Effective Production Plan

Lean Manufacturing

Just-in-Time (JIT) Inventory

Automation and Technology Integration

Continuous Improvement

Frequently Asked Questions (FAQs)

How does a production plan affect overall business profitability?

What are the common challenges faced in production planning?

What is the difference between short-term and long-term production planning?

How can a production plan be adjusted to accommodate changes in demand?

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How to conduct a feasibility study: Template and examples

What is a feasibility study?

What are feasibility analyses used for?

How to conduct a feasibility study

1. Clearly define the opportunity

2. Define the objective and scope

3. Conduct market and user research

4. Analyze technical feasibility

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5. Assess financial viability

6. Evaluate potential risks

7. Decide, prepare, and share

Feasibility study template

Feasibility study example

8. Executive summary

Mock feasibility study report

Introduction

Market and user research

Technical feasibility

Financial analysis

Risk assessment

Conclusion and recommendations

Overcoming stakeholder management challenges

Final thoughts

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How to conduct a feasibility study: Templates and examples

What is a feasibility study?

Benefits of conducting a feasibility study

When should you conduct a feasibility analysis?

Types of feasibility studies

Technical feasibility

Financial feasibility

Market feasibility

Operational feasibility

Legal feasibility

Feasibility assessment checklist

6 steps to conduct a feasibility study

1. Run a preliminary analysis

2. Evaluate financial feasibility

3. Run a market assessment

4. Consider technical and operational feasibility

5. Review project points of vulnerability

6. Propose a decision

Feasibility study examples

Example 1: New product development

Example 2: Real estate development deal

Which phase of the project management process involves feasibility studies?

Feasibility study vs. project charter

Feasibility study vs. business case