Feasibility Study in Tourism and Hospitality

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Questions and Answers

What is the primary function of a business plan?

To provide a financial projection

To conduct a feasibility study

To provide planning (correct)

To define the project scope

Which module of a feasibility study focuses on the suitability of production technology?

Organizational/Managerial Feasibility

Financial/Economic Feasibility

Market Feasibility

Technical Feasibility (correct)

What is the primary focus of the Market Feasibility module of a feasibility study?

Industry description and market potential (correct)

Business Structure and Founders

Determining the facility needs

Estimating the total capital requirements

Which of the following is NOT a part of the Technical Feasibility module of a feasibility study?

Business Structure and Founders Signup and view all the answers

What is the primary focus of the Financial/Economic Feasibility module of a feasibility study?

Estimating the total capital requirements Signup and view all the answers

What is the main purpose of a feasibility study?

To identify potential problems and determine if an idea is viable Signup and view all the answers

What is the outcome of a successful feasibility study?

A decision to proceed or reject the idea is made Signup and view all the answers

What is the primary difference between a feasibility study and a business plan?

A feasibility study is conducted before a business plan Signup and view all the answers

What is one of the key benefits of conducting a feasibility study?

It serves as a solid foundation for developing a business plan Signup and view all the answers

What is the focus of a feasibility study?

Identifying business-related problems and solutions Signup and view all the answers

Why is a feasibility study important for an entrepreneur?

It helps to identify potential problems and solutions Signup and view all the answers

What is the primary purpose of a feasibility study?

To determine whether a business idea is viable and worth pursuing Signup and view all the answers

In which of the following scenarios is a feasibility study particularly valuable?

When starting a new business, expanding an existing business, or adding an enterprise to an existing business Signup and view all the answers

What is a characteristic of a feasible business?

It generates adequate cash flow and profits, withstands risks, and remains viable in the long-term Signup and view all the answers

What is one of the benefits of conducting a feasibility study?

It increases the probability of business success by identifying weaknesses early Signup and view all the answers

What is a reason why a feasibility study is useful for attracting funding?

It provides documentation that the idea was thoroughly investigated Signup and view all the answers

What is the potential outcome of not conducting a feasibility study?

The business may waste hundreds of thousands of dollars further down the road Signup and view all the answers

Study Notes

Definition and Importance of Feasibility Study

A feasibility study is a study that examines the viability of an idea, identifying potential problems and answering the question: Will the idea work and should you proceed with it?
The study helps identify business-related problems and solutions, and serves as a solid foundation for developing a business plan.
It provides valuable information for the "go/no go" decision and increases the probability of business success by identifying weaknesses early.

Purpose of Feasibility Study

To identify how, where, and to whom to sell a service or product.
To assess competition and determine the necessary startup and running costs.

Comparison with Business Plan

A feasibility study is conducted before deciding to proceed with a business idea (go/no go).
A business plan is prepared after deciding to proceed with the idea.
A feasibility study provides an investigative function, while a business plan provides a planning function.

Feasibility Study Outline (5 Modules)

Module 1: Description of the Process

Identification and exploration of business scenarios.
Definition of the project and alternative scenarios.
Relationship to the surrounding geographical area.

Module 2: Technical Feasibility

Determination of facility needs.
Suitability of production technology.
Availability and suitability of site.
Availability of raw materials and other inputs.

Module 3: Organizational/Managerial Feasibility

Business structure.
Business founders.

Module 4: Market Feasibility

Industry description.
Industry competitiveness.
Market potential.
Access to market outlets.
Sales projection.

Module 5: Financial/Economic Feasibility

Estimation of total capital requirements.
Estimation of equity and credit needs.
Budgeting of expected costs and returns.

Feasibility Study for Tourism and Hospitality Projects

A feasibility study helps answer the question of whether to go forward with a business idea.
It is valuable for starting a new business, expanding an existing business, adding an enterprise to an existing business, or purchasing an existing business.

Reasons to Conduct a Feasibility Study

Gives focus to the project.
Narrows the business alternatives.
Identifies new opportunities.
Identifies reasons not to proceed.
Provides valuable information for the "go/no go" decision.
Increases the probability of business success by identifying weaknesses early.
Provides documentation that the idea was thoroughly investigated.
Helps attract funding from lenders, grant providers, etc.
Helps attract equity investment.

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Description

Discover the importance of a feasibility study in determining the viability of a business idea in the tourism and hospitality industry. Learn how it helps in assessing the potential of a new business, expansion, or purchase of an existing business. Understand the key characteristics of a feasible business.