Feasibility Study Overview

Study Notes

Technical: Hardware, software, existing or new, staffing skills
Financial: Initial and future investors, ROI benchmarks
Market: Industry type, marketing characteristics, market growth, competition, environment, sales projections
Organizational: Structure, legal, management team's competency

Preliminary Analysis: Evaluates alternative business ideas. Reduces the number of business options considered. This involves initial investigation of ways to organize the business and/or position the product.
Market Assessment: Determines if there is demand for the product/service. Evaluates price. Identifies and prioritizes opportunities to investigate.
Organizational Structures: Analyses the organization's structure, including staffing requirements and resource needs. Considers management and labor alignment.
Financial Controls: Formalizes an opening day balance sheet. Details projected revenue and expenses.

Points of Vulnerability: Identifies and analyzes factors that could negatively impact the project's short- or long-term success.
Results and Conclusions: Outlines various scenarios examined. Project leaders need to carefully examine the underlying assumptions of the feasibility study, critically analyzing them.
Go/No-Go Decision: This is a critical business decision point; this is where the project is either pursued or not. The feasibility study is a major information source in making this critical decision.

An in-depth research and financial analysis to determine if pursuing a business idea or product is a good decision.
Estimates income, costs, obstacles, and technical challenges.

Time commitment can vary depending on complexity and scope (weeks to months).
Business owners can conduct studies on their own using templates or programs.
Experts are often hired due to the in-depth research and financial projections.
Feasibility studies do not make the final decision but provide evidence and recommendations. Ultimately, the entrepreneur, stakeholders, and/or other authorities decide how to proceed.

Small business owners considering launching a new business, product, or project.
Those who are expanding their business, changing product lines, opening new locations, or making significant investments in technology or markets.

The feasibility study comes before the business plan as it examines the viability of the idea before creating detailed steps to proceed.
Information from the feasibility study is included in the business plan.
A negative feasibility study result may indicate the need to revise the idea or product before further developing a plan.

Executive Summary: Summarizes the project and business, usually about a page long.
Demand: Analyses the market need for your product/service. Includes consideration of online aspects even for brick-and-mortar businesses.
Technical Issues: Outlines the needed technology (tools, equipment, facilities). Includes layout, shelving, offices and manufacturing space.
Logistics Issues: Details vendors, pricing schedules, exclusive agreements and shipping needs.
Legal Concerns: Evaluates necessary permits, regulations, and potentially historical or environmental issues.
Marketing Strategy: Defines the target market and how to meet their needs.
Required Staffing: Forecasts staffing needs (personnel, qualifications, salary expectations and organizational structure).
Scheduling: Creates a timeline for project completion, outlining milestones for financials and physical projects.
Financial Controls: Considers anticipated expenses and profits with projections to assist in deciding if the ROI is viable. A balance sheet for the first day of operation is included.
Return on Investment(ROI): Analysis to assess profit.
Analysis: Evaluation of realistic feasibility based on information gathered and analysis.
Analysis considering worst-case scenarios.
Recommendations: Presents clear go/no-go recommendations and additional alternatives should the feasibility study be deemed unprofitable.

Technical: Assesses the technical resources in the organization to determine if the idea can be implemented.
Financial: Determines the cost-benefit analysis of the idea to evaluate profitability.
Market: Evaluates the industry, competition, and target market to ascertain if the product/service will be successful.
Organizational: Evaluates the organizational structure, legal, and management competency to determine if the company is capable of implementing the idea.