17 Questions
What is the primary function of a business plan?
To provide planning
Which module of a feasibility study focuses on the suitability of production technology?
Technical Feasibility
What is the primary focus of the Market Feasibility module of a feasibility study?
Industry description and market potential
Which of the following is NOT a part of the Technical Feasibility module of a feasibility study?
Business Structure and Founders
What is the primary focus of the Financial/Economic Feasibility module of a feasibility study?
Estimating the total capital requirements
What is the main purpose of a feasibility study?
To identify potential problems and determine if an idea is viable
What is the outcome of a successful feasibility study?
A decision to proceed or reject the idea is made
What is the primary difference between a feasibility study and a business plan?
A feasibility study is conducted before a business plan
What is one of the key benefits of conducting a feasibility study?
It serves as a solid foundation for developing a business plan
What is the focus of a feasibility study?
Identifying business-related problems and solutions
Why is a feasibility study important for an entrepreneur?
It helps to identify potential problems and solutions
What is the primary purpose of a feasibility study?
To determine whether a business idea is viable and worth pursuing
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
What is a characteristic of a feasible business?
It generates adequate cash flow and profits, withstands risks, and remains viable in the long-term
What is one of the benefits of conducting a feasibility study?
It increases the probability of business success by identifying weaknesses early
What is a reason why a feasibility study is useful for attracting funding?
It provides documentation that the idea was thoroughly investigated
What is the potential outcome of not conducting a feasibility study?
The business may waste hundreds of thousands of dollars further down the road
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.
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.
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