Table of Content

What is a Feasibility Study?

Why is it important?

What do the results of a feasibility study show?

Benefits of a Feasibility Study

Phases of a Feasibility Study

When to Conduct a Feasibility Study?

What are the steps in a feasibility study?

Purpose of a Feasibility Study?

Conclusion

What is a Feasibility Study?

A feasibility study is a business plan that describes how a new idea will be implemented, what resources are needed, and how much it will cost. The term "feasibility" means the study has been done, and the project is possible.

A feasibility study can evaluate an idea's viability before investing substantial time and money into developing it further.

For example, suppose a company has an idea for a new product or service but does not have enough information to make a business case for its development. In that case, it may need to conduct feasibility studies first.

A feasibility study will typically include:

• An evaluation of existing products and services in your market space
• A description of existing clientele and target audience
• Existing competition in your market space (if any)
• Current market conditions and trends (e.g., economic conditions)
• The results from previous feasibility studies on similar projects (if any)

Why is it important?

• A feasibility study is an essential part of project management. It helps in determining whether a project will be successful or not.
• A feasibility study also determines the cost and time element of the project, which are essential to determine whether a project is feasible.
• A feasibility study is essential to determine if a project can be completed on time, within budget, and within scope.
• It also helps determine the number of resources required to complete the project.

What do the results of a feasibility study show?

The results of a feasibility study can show project managers what the project will cost, how long it will take, and which products or services they should produce.

The results give you an idea of what it will take to produce the project, and whether it is worth doing it's not worth doing; There is no point in continuing with it.

If the company wants to build a new factory, it must consider cost, time, and quality before making any decisions. The feasibility study will give them the necessary information to make those decisions.

Benefits of a Feasibility Study

Feasibility studies are essential to project management because they help you evaluate your project against the criteria in your project plan.

A feasibility study is a process that involves evaluating your project against the criteria set out in your project plan. It helps you determine whether the risks and rewards of starting or continuing a project outweigh any potential benefits or costs.

Benefits of Using Feasibility Study in Project Management:

• Feasibility Studies help predict the results of a business, financial or operational activity.
• Feasibility studies help determine whether a business, financial or operational activity can be implemented successfully.
• The results from feasibility studies are used as inputs when making project decisions.
• A feasibility study helps determine whether there would be an increase in profits by implementing a new product line or service offered by an organization.

Phases of a Feasibility Study

The phases of a feasibility study are:

Pre-Feasibility Study

In this stage, you will need to establish the project objectives and determine if it is possible to achieve them. This is done by gathering information about the market, competitors, customers, and other relevant information. It would help if you also considered the financial implications of your project and how best to finance it.

Feasibility Study

The feasibility study phase looks at your proposed project's feasibility from an economic point of view, considering such things as investment costs, financing arrangements, technical specifications, and related costs. You can also conduct surveys with potential partners or suppliers for their opinions on whether or not they would participate in the project.

Scoping Study

The scoping study phase involves gathering information about your proposed project and identifying all its essential aspects. Then, it determines the scope and cost of each component of the project. The purpose of this phase is to provide you with a clear idea of how much time and effort you need to put into each component of the project so that you can ensure that everything fits into one schedule as far as possible.

Detailed Feasibility Study

A detailed feasibility study is a process that helps you to understand the pros and cons of your idea. In this study, you will be able to identify whether your idea is financially viable or not.

You can use this study as a guide for future projects. By doing this, you will be able to plan and avoid unnecessary expenses in the future.

When to Conduct a Feasibility Study?

It is essential to conduct feasibility studies, especially when starting a new project. This is because the availability of resources and the costs will determine whether the project can be completed successfully.

Projects that are too big, too high-risk, or too complex for the budget cannot be carried out successfully. A feasibility study will help you establish whether or not your project has been planned correctly and how it can be achieved based on available resources.

You should also conduct feasibility studies if you want to implement new technology, such as a new software application or web platform. In this case, you need to determine whether or not your business can adopt this new technology and if it meets your needs.

What are the steps in a feasibility study?

The steps in a feasibility study are:

Conduct a Preliminary Analysis

The purpose of this step is to identify the need for further investigation. You need to determine if the project will be profitable or if it will have a negative impact on your company's finances. The reason that you should conduct a preliminary analysis is that you want to make sure that any project will have a positive impact on your company's bottom line.

Prepare a Projected Income Statement

The projected income statement shows what you expect to earn from the completed project and how much of that you expect to spend on materials, labor, and other costs. If you're going to spend $10,000 on materials but only expect $6,000 in revenue from selling the completed product, then your projected income statement would look like this:

$10,000 - $6,000 = $4,000

You can use this projected income statement later in the planning process when it comes time to determine how much money is available for spending on additional projects.

Conduct a Market Survey

The first step in a feasibility study is to conduct market research. This will help you understand your customers, competitors, and the market as a whole. You can also use this information to determine how much of your business you can expect to generate and how much it will cost to produce.

Plan Business Organization and Operations

Once you have gathered all the information you need, you must decide on the business model for your new venture. This involves determining what type of organization will work best for your experience. Combining two or more models may be necessary to create a successful business plan.

Determine Marketing and Sales Strategies

Your next step is determining how much money you need for marketing and sales strategies. It would help if you also considered how much money will be required for advertising and other promotional activities. Once you have determined these numbers, it's time to develop marketing strategies that will help drive sales and maximize profits at launch time.

Review and Analyze All Data

The most important part of your feasibility study is to review and analyze all your data. You want to ensure that you have collected enough data, that the data are correct and that there are no missing or incorrect pieces of information in your information collection process. This can be done by using a checklist or by having someone else review the data with you and ensure that everything is accurate and up-to-date.

Make a Go/No-Go Decision

After reviewing all your data, it's time to decide whether or not this idea will work for your business plan. You may determine that this project does not fit your current schedule or budget. Still, you do want to keep it on file as an option for future consideration. For example, suppose this project does not fit your current schedule, budget, or timeline. In that case, you should move on with another idea (or ideas).

Purpose of a Feasibility Study

The purpose of a feasibility study is to analyze the business and technical requirements of an idea. In addition, the study helps determine if there is a market for the developed product or service.

A feasibility study also looks at all aspects of the project, including finances and management skills.

The feasibility study should be performed by someone who knows about the particular field and industry.

The person conducting the survey should be able to answer questions like "What are the advantages of this particular idea?" and "Is this something that people will want?"

Conclusion

A feasibility study is a preliminary assessment to determine if the project can succeed. This usually involves a thorough analysis of the objectives and requirements, examining the available resources and constraints, and some financial assessment or projection.

In most cases, a feasibility study will identify potential problems before they occur, saving valuable time and money in the long run. After all, with so many options on the table, it's always better to make an educated decision than risk a potentially poor or unsuccessful outcome.