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7 Steps For A Feasibility Study: Tools and The Resources

A feasibility study assesses the practicality of a proposed plan or project by determining if required resources exist or can be created, if the project will achieve expected ROI, and other factors for success. It should be conducted after a business case is completed. The feasibility study involves preliminary analysis, creating income statements and balance sheets, thorough market research, planning operations, reviewing all data, and deciding whether to proceed with the project. It determines the viability of a business opportunity.

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Rica Ravia
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30 views

7 Steps For A Feasibility Study: Tools and The Resources

A feasibility study assesses the practicality of a proposed plan or project by determining if required resources exist or can be created, if the project will achieve expected ROI, and other factors for success. It should be conducted after a business case is completed. The feasibility study involves preliminary analysis, creating income statements and balance sheets, thorough market research, planning operations, reviewing all data, and deciding whether to proceed with the project. It determines the viability of a business opportunity.

Uploaded by

Rica Ravia
Copyright
© © All Rights Reserved
Available Formats
Download as DOC, PDF, TXT or read online on Scribd
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Let’s begin by clarifying what a feasibility study is.

A feasibility
study is simply an assessment of the practicality of a proposed
plan or method. Just as the name implies, you’re asking, “Is this
feasible?”

For example, do you have or can you create the technology to do


what you propose? Do you have the people, tools and the
resources necessary? And, will the project get you the ROI you
expect?

When should you do a feasibility study? It should be done during


that point in the project life cycle after the business case has been
completed.

So, that’s the “what” and the “when” but how about the “why?”
Meaning, why do you need a feasibility study? Well, it determines
the factors that will make the business opportunity a success,
making it pretty important.

7 Steps for a Feasibility Study


Follow these steps when conducting a feasibility study:

1. Conduct a Preliminary Analysis

Begin by outlining your plan. You should focus on an unserved


need, a market where the demand is greater than the supply, and
whether the product or service has a distinct advantage. Then
you need to determine if the hurdles are too high to clear (i.e. too
expensive, unable to effectively market, etc.).

2. Prepare a Projected Income Statement


This step requires you to work backwards. Start with what you
expect the income from the project to be and then what
investment is needed to achieve that goal. This is the foundation
of an income statement. Things to take into account here include
what services are required and how much they’ll cost, any
adjustments to revenues, such as reimbursements, etc.

3. Conduct a Market Survey, or Perform Market


Research

This step is key to the success of your feasibility study, so make


it as thorough as possible. It’s so important that if your
organization doesn’t have the resources to do a proper one, then
it is advantageous to hire an outside firm to do so. The market
research is going to give you the clearest picture of the revenues
you can realistically expect from the project. Some things to
consider are the geographic influence on the market,
demographics, analyzing competitors, value of market and what
your share will be and if the market it open to expansion (that is,
response to your offer).

4. Plan Business Organization and Operations

Once the groundwork of the previous steps has been laid, it’s
time to set up the organization and operations of the planned
business venture. This is not a superficial, broadstroke endeavor.
It should be thorough and include start-up costs, fixed
investments and operation costs. These costs address things such
as equipment, merchandising methods, real estate, personnel,
supply availability, overhead, etc.

5. Prepare an Opening Day Balance Sheet


This includes an estimate of the assets and liabilities, one that
should be as accurate as possible. To do this, create a list that
includes item, source, cost and available financing. Liabilities to
consider are such things as leasing or purchasing of land,
buildings and equipment, financing for assets and accounts
receivables.

6. Review and Analyze All Data

All these steps are important, but the review and analysis are
especially important to make sure that everything is as it should
be and nothing requires changing or tweaking. So, take a
moment to look over your work one last time. Reexamine your
previous steps, such as the income statement, and compare it
with your expenses and liabilities. Is it still realistic? This is also
the time to think about risk, analyzing and managing, and come
up with any contingency plans.

7. Make a Go/No-Go Decision

You’re now at the point to make a decision about whether the


project is feasible or not. That sounds simple, but all the previous
steps we’re leading to this decision-making moment. A couple of
other things to consider before making that binary choice is
whether the commitment is worth the time, effort and money and
is it aligned with the organization’s strategic goals and long-term
aspirations.

Best Practices for a Feasibility Study

 Use templates/tools/surveys, or any data and technology that


gives you leverage

 Involve the appropriate stakeholders to get their feedback


 Use market research to further your data collection

 Do your homework and ask questions to make sure your


data is solid

Feasibility Report Template

Finally, here is an outline for the nine parts of a feasibility report:

1. Executive summary

2. Description of product/service

3. Technology considerations

4. Product/service marketplace

5. Marketing strategy

6. Organization/staffing

7. Schedule

8. Financial projections

9. Findings and recommendations

That final item is broken down into subsets of technology,


marketing, organization and financial findings and
recommendations.

ProjectManager.com Improves Your


Feasibility Study
A feasibility study is a project, so get yourself a project
management software that can help you execute
it. ProjectManager.com is an award-winning software that can help
you manage your feasibility study through every phase.
Once you have a plan for your feasibility study, upload that task
list to our software and all your work is populated in our online
Gantt chart. Now you can assign tasks to team members, add
costs, create timelines, collect all the market research and attach
notes at the task level. This gives people a plan to work off of,
and a collaborative platform to collect ideas and comments.

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