Module 2 - To Feasibility Study

Module 2 -
Introduction
to Feasibility
Study
Are you Thinking of starting a Business?
 How long have you been dreaming

about starting your own business?
 What steps have you taken toward

making your dream come true?
 Do you have family support to start

your own business?
Are you Thinking of starting a
Business?
How much money do you need to make?
What kind of experience do you have in

this industry?
Will this business help you realize your

personal life goals?
Introduction
■ Suppose after graduating, you

want to establish a COFFEE
SHOP.
■ After calculating your would-be
business costs, what else do
you need?
Introduction
■ You need to know where to locate

your business and how much it
costs, the time and money on
obtaining permits, the goods to
offer and the marketing strategies
on how to get people patronize
your business.
Introduction
■ You need to determine whether

a project is workable and
financially worthwhile before you
spend large amounts on it. It
shorts, you need to conduct a
feasibility study.
Feasibility Study
■ Feasibility study, which is

synonymous with Project Study is a
systematic inquiry to determine
whether a specific business
undertaking could be implemented at
a certain acceptable profit level
(Ditablan, 2014).
Feasibility Study
■ A Project Feasibility Study is a

thorough and systematic analysis
of all factors to ascertain the
viability of an undertaking
(Mejorada, 2006).
Feasibility Study
■ It is a systematic plan and analysis of
sustainability of a project taking into
consideration factors such marketing,
production or technical issues,
organizational and management
aspects and financial implications. In
other words, feasibility study is the
evaluation and assessment of a
business or projects (Masanja, 2020).
Feasibility Study
■ It gives a “capsule view” of the

whole project by presenting its
highlights, descriptive definition,
long-range objectives, feasibility
criteria, history and basic
assumptions.
Feasibility Study
■ A business idea must be both

“possible” and “feasible”.
Feasibility Study
■ “Possible” involves the availability of

skills, technology, hardware, and
infrastructure to set up the business;
i.e., manufacture the product or offer
the service idea.
Feasibility Study
■ The word “feasibility” means the

degree or state of being easily,
conveniently, or reasonably done.
■ If something is ‘feasible,’ it means
that we can do it, make it, or achieve
it. In other words, it is “doable” and
also “viable”.
Feasibility Study
■ A viable business, for example, is

one we expect will make a profit
every year for a long time.
■ “A feasibility study is an analysis of
the viability of an idea”.
■ “Feasible” lies in the realm of
financing and profitability.
Feasibility Study
■ Before you begin writing your feasibility
study, you need to identify how, where,
and to whom you intend to sell a
service or product.
■ You also need to assess your
competition and figure out how much
money you need to start your business
and keep it running until it is
established.
Feasibility Study
■ Feasibility studies address things like

where and how the business will
operate.
■ They provide in-depth details about the
business to determine if and how it can
succeed, and serve as a valuable tool
for developing a winning feasibility study.
Feasibility Study
■ If the results show that the project is

not a sound business idea, then the
project should not be pursued.
■ Although it is difficult to accept a
feasibility study that shows these
results, it is much better to find this out
sooner rather than later, when more
time and money would have been
invested and lost.
Feasibility Study
■ Business managers and

entrepreneurs undertake feasibility
studies to determine whether a
proposed project or business venture
will be able to sustainably generate a
profit.
Feasibility Study
A feasibility study is valuable for:
 Starting a new business

 Expansion of an existing business
 Purchasing an existing business
Feasibility Study
A feasible business will:
 Generate cash flow and profits,

 Withstand risks,
 Remain viable in the long-term
 Meet the goals of the founders
Importance of Feasibility Studies
• List in detail all the things you

need to make the business
work;
• Identify logistical and other
business-related problems and
solutions;
Importance of Feasibility Studies
■ Develop marketing strategies to

convince a bank or investor that
your business is worth considering
as an investment; and
■ Serve as a solid foundation for
developing your business plan.
Components of a Feasibility
Study
 Market Feasibility
 Technical Feasibility
 Financial Feasibility
 Organizational Feasibility
 Conclusions
Components of a
Feasibility Study
■ Market Feasibility:
Includes a description of the
industry, current market,
anticipated future market
potential, competition, sales
projections, potential buyers, etc.
Components of a
Feasibility Study
 Technical Feasibility
Details how you will deliver a
product or service (i.e., materials,
labor, transportation, where your
business will be located,
technology needed, etc.).
Components of a
Feasibility Study
 Financial Feasibility
Projects how much start-up
capital is needed, sources of
capital, returns on investment,
etc.
Components of a
Feasibility Study
 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).
Reasons Given Not to Do
a Feasibility Study
■ Project leaders may find
themselves under pressure to skip
the “feasibility analysis” step and go
directly to building a business.
■ Individuals from within and outside
of the project may push to skip this
step.
a Feasibility Study
• We know it’s feasible. An existing
business is already doing it.
• Why do another feasibility study
when one was done just a few years
ago?
• Feasibility studies are just a way for
consultants to make money.
a Feasibility Study
• Feasibility studies are a waste of
time. We need to buy the building, tie
up the site and bid on the equipment.
Reasons to Do a Feasibility Study
 Gives focus to the project.

 Narrows the business alternatives.
 Identifies new opportunities.
 Provides valuable information for
“go/no go” decision.
Reasons to Do a Feasibility Study
 Increases probability of business

success by identifying weaknesses
early.
 Helps receive funding from lenders,
grant providers, etc.
Feasibility Study – Example
■ A hospital, for example, aiming

to expand, i.e., add an extension
to the building, may perform a
feasibility study. The study will
determine whether the project
should go ahead.
■ The people carrying out the

study will take into account labor
and material costs. They will
also take into account how
disruptive the project might be
for staff and patients.
■ The study may have to gauge

public opinion regarding the new
extension. In other words, would
the local community be in favor
or against such a project?
■ It is important to determine how

the stakeholders will respond.
■ A stakeholders is a person with
an interest or concern in a
project, business, or
organization.
■ Hospital stakeholders are, for

example, doctors, nurses, other
hospital staff, patients, hospital
visitors, and the hospital’s owner.
Members of the local community
may also be stakeholders.
■ Those conducting the study go

through all the pros and cons of
the project. They then weigh
them against each other.
■ Finally, they determine whether
it is a good idea to go ahead.
Feasibility Study Format
CHAPTER I - INTRODUCTION
Background of the Study
Statement of the Problem
Scope and Limitation
Significance of the Study
Proposed site/location
Vicinity Map
– Focuses on providing a general
idea or overview about the study
– States the brief history of the line
of business you are planning to
start
– Provides a brief but
comprehensive description of the
product or services in the feasibility
study.
– States the reason to write the
project, necessary prerequisites
and the possible results for the
completion of the project
– Related literatures or articles about
your proposed business
– In general, the background of the
feasibility study is a simple and brief
statement about the project. It
provides the rationale to conduct the
study, at the same time provides
underlying problems needs to be
addressed.
Statement of the Problem/Objectives
– This section explains the underlying
problem or challenges that have
prompted the study.
– Enumerate the questions to be
answered at the end of the
feasibility study
Statement of the Problem/Objectives
– This section explains the underlying
problem or challenges that have
prompted the study.
– Enumerate the questions to be
answered at the end of the
feasibility study
Statement of the
Problem/Objectives
– This study is conducted in
order to determine the
feasibility of establishing a
___________.
Statement of the
Problem/Objectives
– Specifically, this study aims to
answer the following
questions:
1. What organization structure
is suitable for this kind of
business?
Statement of the
Problem/Objectives
– Specifically, this study aims to
answer the following
questions:
2. What are the materials,
facilities, equipments needed
for the business to operate?
Scope and Limitation of the Study
– This sections takes the focus
of your study
– This includes what you will
and what you will not include
in your paper.
■ This section provides the
coverage and boundaries of the
feasibility study
■ It refers to the parameters or the
areas of the feasibility study will
explore and investigate. This includes
the location to conduct the
investigation and the time framework
to complete the feasibility study.
■ Provides the type of information to be
included in the study and the
limitations might include the
constraint beyond the ability of the
researchers which might jeopardize
the execution of the feasibility study.
.
■ Examples: What you will and what
you will not include in your paper.
■ You may include the
products/services that you will/will not
offer in your business.
■ Examples:
■ This study is only limited to the six
areas namely: Management,
Technical, Marketing, Financial,
Socio-economic and environmental
aspects of the feasibility study.
■ Examples:
■ The respondents of the study were
_______ OM students.
■ Provides the contribution of the
problem or broad problem in
education and knowledge in
general.
■ Provides the benefits of the
study to different parties and
stakeholders.
■ States who will benefit from the
feasibility study and what they
hope to benefit from the
feasibility study.
Examples:
– Academe. The study is significant to
the academe because ________.
– Investors
– Customers
– Researchers
– Future Researchers
THANK YOU
AND
GOD BLESS

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Module 2 -

 How long have you been dreaming

 What steps have you taken toward

 Do you have family support to start

How much money do you need to make?

What kind of experience do you have in

Will this business help you realize your

■ Suppose after graduating, you

■ You need to know where to locate

■ You need to determine whether

■ Feasibility study, which is

■ A Project Feasibility Study is a

■ It gives a “capsule view” of the

■ A business idea must be both

■ “Possible” involves the availability of

■ The word “feasibility” means the

■ A viable business, for example, is

■ Feasibility studies address things like

■ If the results show that the project is

■ Business managers and

 Starting a new business

 Generate cash flow and profits,

• List in detail all the things you

■ Develop marketing strategies to

 Gives focus to the project.

 Increases probability of business

■ A hospital, for example, aiming

■ The people carrying out the

■ The study may have to gauge

■ It is important to determine how

■ Hospital stakeholders are, for

■ Those conducting the study go

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