A Feasibility Study can be defined as a controlled process for identifying problems and opportunities, determining objectives, describing situations, defining successful outcomes and assessing the range of costs and benefits associated with several alternatives for solving a problem. If a project is seen to be feasible from the results of the study, the next logical step is to proceed with it. The research and information uncovered in the feasibility study will support the detailed planning and reduce the research time.
A feasibility study looks at the viability of an idea with an emphasis on identifying potential problems and attempts to answer one main question:
“Will the idea work and should someone proceed with it?”
Feasibility studies contain comprehensive, detailed information about business structure, products and services, market, logistics, resources that are needed to make the business run efficiently, as well as other information about the business.
- Description of the Business:
The product or services to be offered and how they will be delivered.
- Market feasibility:
Includes a description of the industry, current market, anticipated future market potential, competition, sales projections, potential buyers, etc.
- Technical feasibility:
Details how you will deliver a product or service (i.e. materials, labour, transportation, where your business will be located, technology needed, etc.).
- Financial feasibility:
Projects how much start-up capital is needed,sources of capital, returns on investment, etc.
- Organizational feasibility:
Defines the legal and corporate structure of the business (may also include professional background information about the founders and what skills they can contribute to the business).
Discusses how the business can succeed. Be honest in your assessment because investors won’t just look at your conclusions they will also look at the data and will question your conclusions if they are unrealistic.