A Simple Guide to Feasibility Studies | iCert Global

Training in project management has grown considerably in recent years, and it will keep on expanding even further. As more individuals are utilizing project management, a feasibility study is becoming increasingly vital. Starting a big project can be exciting because it can really do some good for your business. However, it can be a bit daunting if it does not go as planned. If you have never done a feasibility study in your life, don't panic—this article will walk you through how to get started.

What is a feasibility study?

A feasibility study is one method of determining if a concept or a project will likely succeed. It is also referred to as a feasibility report or a feasibility analysis.

This analysis looks at all the important aspects of a project—such as money, time, materials, and talent—to determine if the project will be successful. It informs a company whether the project will give quality output, such as a profit (which is referred to as ROI, or return on investment).

A feasibility study investigates whether the project can be done in the real world or not. It investigates the cost implications of the idea, what it will take to succeed, and what problems it may face. The two most important questions it asks are: How much is it going to cost? and Is it worth it?

Types of Feasibility Studies

There are five broad categories of feasibility studies. A detailed study will examine all of them:

1. Technical Feasibility

This verifies if your team possesses the necessary technology and capability for the project. It considers if the equipment, tools, and software you require are present and operational.

For instance: You wouldn't attempt to construct a Star Trek teleporter today because we don't have the technology. That is not something you can do.

2. Economic viability

This kind of analysis is cost versus benefit analysis. This determines whether the project is worth undertaking in terms of how much money it will make. It informs you whether the project is a good money choice before money is invested.

3. Legal Feasibility

This is to see if the project complies with all the laws and regulations. For instance, if an organization is interested in constructing an office within a specific location, a survey may indicate that the land is not suitable for office construction. This saves the company time and money before they embark on something that is not permitted.

4. Operational Feasibility

This verifies whether the project will be effective in real life. It queries, "Will the project meet the needs of the company?" It also asks whether the project will adhere to the plans that were established during the early planning phase.

5. Scheduling Feasibility

This is all about time. It is helpful to know how long it will take to get the job done and whether it can be completed on time. Even if everything else goes well, the project might not work if it's not completed on time. That is why planning is extremely important.

What does a Feasibility Study Report contain?

It is recommended that you do a feasibility study before starting a business or a big project. It helps you decide if your idea can actually be successful and profitable.

In doing this, you have to consider things like:

• Will somebody compensate you for your product or service?

• Who are your competitors?

• Does the firm have adequate resources and money to make that feasible?

• What equipment and technology do you require?

• What is your anticipated return (ROI)?

Tools Used to Carry Out a Feasibility Study

In order to make a successful feasibility study, the following is helpful advice:

• Start with a speedy check – Talk to the individuals involved and explore other options.

• Ask questions – Ensure your data is strong and reliable.

• Survey – Find out whether individuals desire what you are offering.

• Plan ahead on the budget – Note down the cost, the duration it will last, and the number of individuals you will require.

• Create financial records – For example, how much money you make and spend.

• Look for risks – Find out what could go wrong and how to deal with it if it happens.

• Decide to proceed – Once all the research.

The principal elements of a feasibility study

Here is a short list of the most important works:

• Executive Summary – What's the idea?

• Technology – What do you need, and can you afford it?

• Market Research – Do you need it?

• Marketing Plan – How will you get customers to come?

• Staffing – Who should get the job done

• Timeline – When will all this happen?

• Money – How much will you earn and spend?

7 Easy Steps to Conduct a Feasibility Study

1. Begin with a quick assessment (first analysis).

Take a moment to look over your idea before you start.

Ask questions like:

• Is it possible?

• Is it better to know more?

You can:

• Talk to people who know the business.

• Look at similar projects

• Get feedback from potential consumers.

2. Make a Money Plan (Estimated Income Statement)

Sketch a basic diagram to illustrate:

• How much you would earn

• What you can afford

This assists you in determining if your business can earn profits.

3. Verify the Marketplace (Market Research)

You need to figure out:

Who will purchase your product or service?

• What do human beings actually want?

• Who are your competitors with similar experience?

Survey, interview, or focus groups to find out. Then create a profile of your ideal customer.

4. Plan Out How the Business Will Operate

Select how you will run the business:

• Will you work alone or in groups?

·  Are you planning to open a shop or sell online?

• How would you let others know about your venture (marketing)?

5. Record What You Have on the First Day (Beginning Balance Sheet)

This is a declaration of your company's assets and cash at day one.

It should depict such as

• Money

• Tools

• Payments to make

• tax owed to you

This allows you to understand how your business evolves or transforms.

6. Read All the Information

Double-check all carefully:

• Does the information seem true?

• What can go wrong?

• What are the good and bad sides of this plan?

Make your employees read it and ensure that they grasp the money plans and the risks in plain language.

7. Decide: Yes or No (Go/No-Go Decision)

Finally it's time for the decision:

• Do you carry on with the concept?

• Are the threats extremely high?

• Is the reward worth the risk?

• If it does feel right, then go. If not, then it is okay to stop and rethink.

• Feasibility Study and Business Plan – What's the Difference?

• When you start a business, you will need two important documents:

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Conclusion

A feasibility study helps you determine if a business or project idea is worth investing in before spending time, energy, and funds. It checks such vital items as cost, timeline, risk, and if and when individuals really want what you are offering. Doing the study helps you make informed decisions and avoid blunders.

We hope you were able to understand feasibility studies. To learn more about project management and how to implement successful projects, continue reading articles or enroll in iCert Global's Postgraduate Program in Project Management.

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