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What is a Feasibility Study and When to Do it ?

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3_23 What is a Feasibility Study? As the name implies, a Feasibility study is an analysis of the viability of an idea. The feasibility study focuses on helping answer the essential question of “should we proceed with the proposed project idea?” All activities of the study are directed toward helping answer this question. Feasibility studies can be used in many ways but primarily focus on proposed business ventures. Farmers and others with a business idea should conduct a feasibility study to determine the viability of their idea before proceeding with the development of a business. Determining early that a business idea will not work saves time ,money and heartache later. A feasible business venture is one where the business will generate adequate cash-flow and profits, withstand the risks it will encounter, remain viable in the long-term and meet the goals of the founders. The venture can be either a start-up business, the purchase of an existing business, an expansion of current business operations or a new enterprise for an existing business. Feasibility Study Outline is provided to give you guidance on how to proceed with the study and what to include. . A feasibility study is only one step in the business idea assessment and business development process . Reviewing this process and reading the information below will help put the role of the feasibility study in perspective.

When to do a study? The decision to conduct a feasibility study should not be taken lightly. It is an expensive and time consuming process. However, not doing a feasibility analysis can be even more expensive in terms of the poor decisions you may make from not conducting the proper analysis. You need to be far enough along in the deliberation process of your business idea to make the best use of a feasibility study. So you need to have a clearly defined outline of one or more alternative business models or scenarios that you want to explore. And you want to have conducted sufficient initial investigation of these alternatives to determine if they have the potential of being viable. You don’t want to spend your feasibility money investigating ideas that you can determine are not feasible by just making a few phone calls. This means that you will need to have already done much of the early investigation and exploration of your business idea before you schedule a full blown study. This early investigation or pre-feasibility analysis can be done by members of your committee or with the help of a consultant. You may start by doing a marketing study to determine if the business idea has market viability. If it does not, you have saved time and money by not commissioning a comprehensive feasibility study. If the idea has market viability, you can move forward with the feasibility analysis and use the market analysis in the feasibility study.

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