Chapter 7:

Writing a Feasibility Study/

Business Plan
This chapter describes the form of business organization that is best
suited for the proposed project, the organizational structure, the number
of personnel needed, their qualifications, their compensation, and the
projected time table before the project is implemented.
RECOMMENDED OUTLINE FOR ACADEMIC PROJECT FEASIBILITY STUDY
 PRELIMINARIES OF A PROJECTED FEASIBILITY STUDY

Title Page
• This title page presents the title of the project feasibility study and the submission requirement
which includes the school, the degree sought the full name of the writer and the year in which the
degree is to be granted if it is a thesis.
Approval Sheet
• The approval sheet provides spaces for the signature of the adviser, the panel of oral examiners, the
department chair, and the dean indicating their acceptance of the work.
Abstract
• This part presents a brief descriptive summary of the project feasibility study.
Dedication
• The dedication page is a brief statement of devotion of the author to a person or persons,
organizations, or institutions. No matter how short it may be, it is usually written on a separate
page.
 PRELIMINARIES OF A PROJECTED FEASIBILITY STUDY

Acknowledgements
Writing a project Feasibility study is a difficult task. It involves the assistance of
people, private offices, government, financial sources, and others. The
acknowledgement section is one of the preliminaries in which the writer expresses
his gratitude and appreciation to important people for the courtesy, help, and
assistance extended to him.
Table of contents
The table of contents presents the content or the outline of the Project Feasibility
Study including the page numbers.
List of Tables and Illustrations
• The list of tables and Illustrations are presented after the table of contents.
Writing Chapter 1 of the feasibility study: INTRODUCTION

Background of the Study

This is a short explanation on why the student chooses his subject matter for a
feasibility study. The relevance of the subject is also discussed. Since this is the
introductory part, it also includes the name of the proposed project, the proposed
location, the products, the proposed target market, and the mode of financing.
Statement of the Problem
The problem of the study can be stated in the form of a question or statement.
The statement should be broad enough which could be broken down into
specific problems and which will seek answers to crucial questions on the four
functional areas of management: Marketing, Technical/Production, Organization
and Management and Finance.
The following are examples of statements of a problem
Correctly stated:
The central problem of this study is the evaluation of the feasibility and
viability of establishing a
------------------------------------------------------------------------- in
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Poorly stated:
• The central problem of this study is to evaluate of the feasibility and
viability of establishing a
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Objectives
This refers to one’s goals in writing the project Feasibility Study. All
topics to be discussed in the text are geared toward its
accomplishment.
For example:
• The main objective of this study is to determine the feasibility and
viability of the proposed venture.
• Specially, objectives from the point of view of the four functional areas
of management are as follows:
Marketing:
1. To identify the demand and supply for the products.
2. To formulate marketing strategies for a successful business operation.
Production/Technical
3. To develop the process involved in operationalizing the project in the most effective and
economical way.
4. To know the production/technical requirement in the establishment of a (state the
nature of the business)
Organization and Management
5. To design the most appropriate business organizational set-up.
6. To determine the number of people required to manage the project effectively.
Financial Study
7. To make an estimate of the amount of total investment required to implement and
operationalize the project.
8. To evaluate the profitability, liquidity, and stability of the proposed business venture.
Significance of the study
• This tells the importance of the study to a particular group of people or
sector, such as: readers, researchers, community, etc.
Scope and Limitations
• This tells the coverage of the study, the target market; the time horizon, the
survey area, and the time the date were gathered. The researcher should
identify the specific target market covered such as: consumers, resellers,
industrial, government and non-profit organizations. The geographical and
the demographical descriptions of the target market should also be defined.
• In order for a proposal project to be proven feasible, all relevant data should
be gathered and analyzed. However, there are factors that may make it
impossible for one to get all the needed information. The student should
state in the limitations his reasons for being unable together all the necessary
data and how they may affect the conclusion of the study.
Methodology.
• The methodology describes the sources of data, research design, and the treatment of
data.
• Sources of data. There are two sources of data: (a) primary and (b) secondary.
• Primary data are usually delivered from interviews, survey questionnaire, and
observations. The survey questionnaires should be validated before it is administered.
The sample survey questionnaire and the structured interview questions should be
presented in the exhibit.
• Secondary data are usually delivered from printed materials, books, magazines,
films/video tapes, and related studies made on the subject.
• A student working on a project feasibility Study should use both the primary and the
secondary sources of data.
Research Design. Business research usually requires the use of descriptive and explanatory
methods utilizing historical trends and projections.
a. Explanatory Method. This is a process of “feeling” the situation or obtaining a “bird’s eye view”
on the total aspects. It includes a Literature Survey or the so called library tour. The researcher
should see to it that there are relevant materials that could be of help to the study. It also
includes an experience Survey. This refers to seeking the assistance of persons to give
information about their failure, success, problems, and other alternatives regarding their
businesses.
b. Descriptive Method. It establishes relationships or correlations between dependent and
independent variables. The description is based on a sample which represents the total
population.
• There are two sample techniques: (1) Restricted Sampling Technique, and (2) Unrestricted
Sampling Technique.
• A simple comparison of the said techniques is summarized below.
• From the gathering data, the level of confidence should be indicated because, rigid as it may seem
to be, error is still inevitable.
• Treatment of Data. Manual or personal method of processing is the most appropriate for the
student to use because: (a) it has simple manipulative requirements in statistical analysis, (b) time,
clarity, and accuracy are not sacrificed in communicating with computer personal and computer
instructions, or in interpreting their responses; (c) this method requires relatively low cost; and (d)
the whole direction of the processing lies entirely within the researcher’s knowledge and skill
without outside constraints.
• Comparative analysis could be used to analyze data. To forecast historical data, the student may
use any of the different methods of projections. The principle of capital budgeting should be used
to determine the earnings power of the project. Several types of financial ratios should also be used
to show how viable the project is in terms of financial soundness and condition, if implemented.
• Under the treatment of data, the student should put all the formula that he intends to use including
the rationale of choosing such.
Review of Related Literature
• This is the presentation of related studies and literature that support the
study. It also points out the difference of one’s study from other
studies.
Definition of terms
• Define the technical, scientifical, or legal terms that are used in the
study especially those which are differently explained by the
dictionary. This will help the reader understand the writer’s point of
view.
Writing Chapter 2 of the feasibility study: MARKETING STUDY

• In any project feasibility study, the marketing aspect is considered the

most important area. This is so because it describes market situations
where the product can be identified through the demand analysis. The
discussion in this chapter includes the description of the product,
industry profile, demand and supply situation, and the marketing
plans.
• The objective of the student in writing the chapter on Marketing Study
is to show that there is a market for the proposed product.
Product Description
• The primary (and secondary, if any) product/s of the proposed project is/are to be vividly described in this
section. It also discusses the difference of the products between existing products.
• If there are several products, summarize and show them in the exhibit.
Industry Profile
• The industry profile describes the general trade practices of an industry or business which sells the same
product. Some of these practices are pricing, sales, methods of transportation, promotion, channels of
distribution, supplies, packaging, resources available, the values of people, and also the opportunities,
threats, strengths and weaknesses of the industry.
• SWOT: Every product or service has its own strength, weakness, opportunity and threat. Planning should
include the improvement of the product/service in order to survive competition.
SWOT Analysis
• There is always a need to evaluate business opportunities, whether these are really economic
opportunities and whether these are profitable. To be able to translate business opportunities into profits,
the SWOT analysis is applied. It studies the financial resources, physical facilities, management
capabilities, the market, production process, information system, sources of supply and social
environment.
• SWOT analysis evaluates the strength, Weaknesses, opportunities and threats associated with a particular
product or service. SWOT is the acronym of strengths, weaknesses, opportunities and threats. Here are
indicators of SWOT:
 SWOT Analysis
Strength of a product or service Opportunities of a product or service
1. Cheap and abundant raw materials 1. Big demand for the product/service
2. Sufficient funds 2. Favorable government policy/support
3. Availability of technology
3. Scarcity of the product/service
4. Presence of skilled workers
4. Poor quality of existing product
5. Management and technical expertise of the entrepreneur
5. Absence of product/service
6. Good quality/service
7. Ease of production 6. Possibilities of goods profits
8. Small capital Threats
Weaknesses of a product or service 7. Shortage of raw materials at a given time
9. High price 8. Entry of many competitors
10. Poor quality/service 9. Increasing costs of production
11. Weak management 10. Expectation of unfavorable government laws, such
12. Lack of skilled worker as taxes
13. Irregular supply 11. Deteriorating peace and order
14. Unattractive design 12. Emergence of unfair demands of workers through
15. High costs of production labor union activities.
Demand
• In this section, the student/researcher pinpoints the specific customers who are willing
and are able to buy the proposed product/s. This could be done through segmenting the
market geographically and demographically.
• Demographical segmentation determines to whom, in a particular place, the products will
be offered. It also defines the market through (a) sex; (b) age; (c) religion; (d) educational
attainment; (e) ethic group; (f) income level; (g) occupation; and (h) credit availability.
• Geographical segmentation points out the market through regions, districts, sector cells,
towns, or imidugudu by knowing the population.
• Once the target market is determined, gather the historical population (at least 5 years)
which will be the basis for the 5-year projected population. The summary of the historical
and projected demand must be summarized on a separate table.
• After the student administering the survey questionnaire to a sample of the present
population, the result of the survey questionnaire, interview and observation will then be
used to measure the demand. Again, the historical and projected demand must be
summarized on a separate table. The tabulated result of the survey questionnaire and
structured interview should be presented in the exhibit.
Marketing plans
The marketing plans or strategies should be done in order to attract customers and even
the customers of the competitors. Before doing so, consider the six O’s of marketing:
1. Occupants. Who are the target markets? What are their values, culture, religion,
etc.?
2. Object. What makes the products attractive to the target market- packaging, color,
shape, size, etc.?
3. Objectives. What is/are their objective/s in buying the product-status symbol,
price, quality, ect.?
4. Occasion. When do the customers usually buy the products-daily, weekly, during
birthdays, anniversaries, or Christmas season?
5. Outlet. Where could the target buyers buy the products-from the wholesalers,
retailers, brokers, contractors?
6. Organization in the family. What is the customer’s role in the family-initiator,
buyer, or decision-maker?
The market plans and strategies should be based on the 5 P’s of
marketing mix:
1. Product
2. Promotion.
3. Pricing.
4. Place or the channel of Distribution.
5. People.
• Product. What should be done with the product so that it will be more
attractive that the competitors’ products? This includes research and
Development on design and Style. The budget for the initial year and the
supporting computations should be included. The said budget will be
included in the product cost.
• Promotion. What promotional activity should be done in order to
compete with the promotions of the current suppliers? Prepare also a
schedule for the initial year’s budget. The initial year’s budget is an
organizational cost which has to be capitalized. However, the
promotional expense for the succeeding year will be a part of the
operating expenses.
• Pricing. What terms of sale will increase the selling value of the
products-n/30; 2/10, n/30? What pricing technique can be used in
determining the selling price of the products?
Here are some pricing techniques:
1. Cost-Plus Method. The cost-Plus Pricing is the simplest method. The cost of
the product is figured out and tacked on a little something for profit. It is the
favorite technique of firms who aim to tap a particular segment of market.
2. Market-oriented Method. This is not based on cost, but on the interaction of
demand and supply.  
3. “Loss” Leader Strategy. Some products may be sold at a losing proposition to
attract customers to go to their stores. The mark-up is taken from other products.
4. Psychological pricing. Stating the price on a lower scale. For example rwf295
instead of rwf300.
5. Value for Money Pricing. This pricing approach is not aimed at maximizing
profit per single purchasing but in bulk or quantity/frequent sale. This sale
tactics is an ideal mechanism in tapping potential sales through more purchases,
thus, clearing inventory gluts and creating an image of fresh supply. This pricing
concept targets either or both the diet and price conscious consumers
Writing Chapter 3 of the Feasibility study: TECHNICAL STUDY

• The technical study discuses how the products are to be produced,

when these products are to be produced, how much will it cost to
produce the products, where to produce the products, and what
technology is to be used.
• The objective of the student in writing this chapter is to show that the
product can be produced at a reasonable cost in the proposed location.
Production Process/Process flow
• The production process discusses how the products will be produced, specifying each step that will
be involved, and the time involved.
Equipment, Machinery, Furniture and Fixtures
• This part discusses or describes the technology that will be used-manual, mechanical, automated,
or robotics.
• If production process is done manually, then the use of equipment, machinery, furniture and fixture
will be limited. However, the student will still make a list of all the needed equipment, and other
facilities. The list should include the description, the specification, and the prices of the listed
assets. If it is mechanical, automated, or robotics, the student will also do the same.
Building
• The student should determine whether it is necessary to put up, to rent, or to lease a building. If a
building is to be constructed, he should provide a computation for the cost of the building. This
includes the determination of the life of the building as well as the depreciation method to be used.
• If the student proposes to rent a building, he should determine the historical and the current rent so
that he will be able to project the rentals. When it is necessary to renovate the building to fit the
requirements of the production process, the cost of renovation should likewise be included.
• The reasons for constructing or renting a building should be indicated.
Location
• The student is required to gather maps I order to show where the proposed project
will be located. In the discussion, the student should also describe the distance of the
proposed project from its competitors as well as its supply of raw materials, public
markets, roads, communication facilities, etc. He is to discuss also the environmental
conditions of the place whether it is rural, urban, or near schools, hospitals, etc.
Layout/Floor Plan
• This topic specifically discusses how the place (factory, store, or office) looks like
and how it is arranged.
• It is recommended that the student presents the drawings including dimensions so
that readers could easily visualize how the proposed venture will be.
Capacity/Scheduling
• The student, after describing the location, layout, building, equipment, machineries,
furniture and fixture, can now discuss its capacity. He should be able to determine the
maximum capacity, the production schedule, the number of shifts per day, number of
working hours per day, etc.
Waste Disposal
• There are some processes that produce unhealthful wastes. Here, the student should
discuss how to dispose the wastes and also the cost of disposing.
Utilities and other Operating Costs
• This part describes the amount, cost, and sources of utilities-fuel, water, and electricity. It
also includes other costs that the proposed project will incur like supplies. Telephone,
telex, maintenance, repairs, insurance, taxes, licenses, and etc. The provision for
unforeseen costs such as miscellaneous costs and contingencies is also included.
Production Costs
• Here, the monetary aspect of all the production plan is put into prospective. It includes the
initial raw material costs, labor costs, Operating costs, and other costs to produce the
product. Also indicate how much should be the minimum required level of inventory of
raw materials, finished goods or merchandise. The reorder point and safety stock levels
should likewise be identified.
• Such inventory levels should be sufficient to meet production requirements and also help
as a shock absorber for demand. Present the summary of the production cost in the exhibit.
 Writing Chapter 4 of the project Feasibility Study: Organization and Management
Study

Organization Plan describes form of ownership and lines of authority and responsibility of
members of new venture.
• When one starts to organize a business enterprise, it is presumed that he has conducted a
feasibility or market study. That is, he knows his resources, the needs of the community, the
strengths of his competitors, and so forth. However, what count most are the personal
characteristics of the entrepreneur. Hardworking, determination, creativity, enthusiasm and
human relations can make the difference between success and failure. Many successful
businessmen started from scratch. Now, they are millionaires. Some of them have not even
acquired secondary school education. We have this kind of entrepreneurs in our own
communities.
• In organizing an enterprise, there are several types of business organizations to choose from.
These are the sole or single proprietorship, partnership and corporation. The cooperative is
also considered a business organization, although its basic motive is service to the members
and the community.
Form of Business Organization
• There four types of business organizations. These are: (1) single proprietorship,
(2) partnership, (3) corporation, and (4) cooperatives. The student should now
choose the best form suited for the proposed project. He should also include the
rationale for choosing it.
 Proprietorship: Form of business with single owner who has unlimited liability, controls
all decisions, and receives all profits.
 Corporation: Separate legal entity that is run by stockholders having limited liability.
 Partnership: Two or more individuals having unlimited liability who have pooled
resources to own a business.
 Cooperative: an enterprise owned and operated by its members.
• The following table describes the legal factors involved in each of these forms.
These three basic legal forms are compared with regard to ownership, liability,
start-up costs, continuity, transferability of interest, capital requirements,
management control, distribution of profits, and attractiveness for raising
capital.
Organizational Structure
• Here, the student should be able to enumerate the positions needed and
their respective job descriptions and job specifications. The job
specifications for the various positions will be the basis for recruitment
and placement of workers.
• Also, the flow of authority and responsibility will be discussed and
shown in a chart the Organizational charts.
What is an organization?
• An organization is a group of two or more persons who work together to
attain a common set a goal.
• The organization plan is the part of the business plan that describes
the venture’s form of ownership that is, proprietorship, partnership,
or corporation. If the venture is a partnership, the terms of the
partnership should be included. If the venture is a corporation, it is
important to detail the shares of stocks authorized, share options,
as well as names, addresses, and resumes, of the directors and
officers of the corporation. It is also helpful to provide an
organization chart indicating the line of authority and the
responsibilities of the members of the organization.
• The following questions summarize some of the key questions the
entrepreneur needs to answer in preparing this section of the business
plan. This information provides the potential investor with a clear
understanding of who controls the organization and how other
members will interact in performing their management functions.
• Here are question you may answer in formulating Organization Structure
1. What is the form of ownership of the organization?
2. If a partnership, who are the partners and what are the terms of agreement?
3. If incorporated, who are the principal shareholders and how much stock do they own?
4. How many shares of voting or nonvoting stock have been issued and what types?
5. Who are the members of the board of directors? (Give names, addresses, and resumes.)
6. Who has check-signing authority or control?
7. Who are the members of the management team and what are their backgrounds?
8. What are the roles and responsibilities of each member of the management team?
9. What are the salaries, bonuses, or other forms of payment for each members of the
management team?
Developing the Management Team
• Investors will usually demand that the management team not attempt to operate
the business as a side-line or part-time venture while employed full time
elsewhere. It is expected that the management team be prepared to operate the
business full time and at a modest salary. It is unacceptable for the entrepreneur
to try to draw a large salary out of the new venture, and investors may perceive
any attempt to do so as a lack of psychological commitment to the business. In
addition the entrepreneur should consider the role of the board of directors
and/or a board of advisors in supporting the management of the new venture. At
this point, however, the entrepreneur needs to consider the alternative regarding
the legal form of the organization. Each of these forms has important
implications on taxes, liability, continuity, and financing the new venture.
Personnel Requirement
• Based on the organizational structure, the student should determine the number of
workers needed in the organization. There are instances wherein one person could
do three or more jobs/positions in the organizational chart. However, it is also
possible that one position would require two or more workers. Show the summary
of the personnel requirement in the exhibit.
Qualification Standards
• Here, the student discusses the qualifications of workers. There are three kinds of
qualification standards.
Personal. This refers to the personality required of a worker. His traits, manners, values, and
the way he talks.
Experience. This refers to the length of working experience required of a worker, and also
related job experiences.
Academic. This refers to the worker’s academic qualifications or the educational attainment
required to perform the job better.
The summary of the qualification requirements of workers should be shown in the exhibit.
Compensation package
• After determining the number of workers needed and their
qualifications, express their efforts in monetary form. Salaries and
wages should be set taking into consideration the minimum wage
required by law and the result of the wage survey.
• Since the law provides benefits to workers, such as allowances,
bonuses, CSR contribution, and etc., the student should not fail to
include these. The summary of the compensation package should be
shown in the exhibit.
Projected time table
During the pre-operating period, a number of studies and decisions
have to be made. Preparatory to the actual operation, the student
should enumerate several steps designed to hasten smooth
implementation of the proposed project. In every step that the student
mentions, he should indicate the length of time needed to do it, and
the amount of money to be spent. Some examples are:
Preparation of product study
1. Mapping plans and specifications
a. Layout
b. Marketing studies
c. Sources of financing
d. Others
2. Formal organization
a. Application for registration
b. Application for juridical personality
c. Payment of filing fee, license fee, and registration
3. Negotiation with the lease contractor (if you decide to lease)
4. Renovation of the place
5. Acquisition of facilities and recruitment of workers
6. Promotion
The major activities should be shown through the Gantt Chart. A sample Gatt Chart is
shown below.
The total pre-operating expense or organization cost and the necessary documents in
starting a business should be shown in the exhibit
Writing Chapter 5 of a Project Feasibility Study: FINANCIAL STUDY

• This aspect discusses the following: major assumptions, capital

required to finance the project, the sources of funds, and the financial
statement preparation and analysis. The plan in operationalizing the
proposed venture will be translated in monetary terms.
• The objectives of the student in this chapter are: to show that the
project is profitable and is capable of being financed. Projections
should show that profits will continue in the future and that the
venture will remain liquid and financially stable.
• Major Assumptions
• The student should state the major assumptions made in making the
financial projections. These assumptions should be realistic, that is
they should be based on veritable data. For example, an assumption
for sales and sales increases may be based on the demand and supply
situation and the pricing strategy discussed in the marketing study.
The salaries and benefits should be based on the organization and
management study and on the historical and current salary schemes
of the industry. The student may make general assumptions on the
following aspects:
1. Sales
2. Withdrawal of owner/owners (if partnership/sole proprietorship)
3. Cost of goods sold/Cost of sales
4. Amount or levels of inventory needed
5. Salaries, wages, benefits.
6. Repairs and maintenance
7. Rent, lease
8. Advertising/Promotion expense
9. Supplies
10. Cost of disposing wastes
11. Utilities
12. Telephone bills
13. CSR-contribution
14. Miscellaneous expenses
15. Amortization method for the intangible assets and organization costs
16. Depreciation methods for fixed assets
17. Insurance, taxes and licenses
18. Agreement of partners, if partnership
19. Etc.
Capital Requirement/Investment
The student will now make an estimated of the initial project cost. This
is the initial investment or the capital requirement which includes the
following:
1. Pre-Operating expenses. This is derived from the budget in the projected
time table of the organization and the management study.
2. Operating expense/Working Capital. In order to arrive at the working
capital, get the total current asset amount first. This includes the following:
a. Cash (minimum required level of cash to sustain operations).
b. Receivables (refers to the credit terms)
c. Raw materials includes of freight expenses (refer to the technical study)
d. Utility (refer to the technical study)
e. Maintenance and warehousing expenses (refer to the technical study)
f. Prepaid expense (refer to the technical study)
g. Salaries, wages, and fringe benefits (refer to the organization and management study)
h. Operating taxes and licenses (refer to the technical study).
i. Supplies (refer to the technical study)
j. Communication facilities (refer to the technical study).
k. Advertising/promotion (refer to the marketing study)
l. Transportation cost (refer to the technical study)
m. Provision for unforeseen costs (refer to the technical study)
n. Intangible assets (refer to the organization and management)
• The total amount of current assets are then multiplied by the current
ratio which is ideally 2:1 to arrive at the total cost of working capital.
• However, if borrowing is not necessary, there is no need to multiply
the current asset cost by the desired current ration.
3. Capital expenditure or Fixed Assets. This refers to the fixed assets
needed in the proposed business. Fixed assets include equipment,
machineries, furniture and fixtures, building and land. The cost of
these fixed assets should be referred to the technical study.
Source of Financing
• This discusses how the total capital requirement will be financed. It describes the sources of
short-term and long-term funds needed for the proposed business. Alternative sources of funds
should also be indicated in case immediate financing problems may arise.
• It is recommended that the student must show evidence of the availability of financial sources.
• In cases where there are agreements made with financiers, like interest, maturity date of money
borrowed, dividends, sharing of profits etc. the student should include the same.
Preparation of Financial Statements
• The financial statements to be presented in the project feasibility study are:
1. Income statement. It presents the project’s total revenue, the total costs, and the net income
for each of the next five years. It must be shown in schedule or in the exhibit.
2. Statement of Cash-flow. It is a systematic presentation of cash receipts and disbursements of
the operating, investing and financing activities during each of the first five years of operation
using the accrual concept of accounting. This must be shown in schedule or in the exhibit.
3. Balance Sheet. This shows the assets of the project and the corresponding liabilities and
capital. It is an overall picture of the firm’s financial condition as of the end of each of the first
five years of operation. This must be shown in a schedule or in the exhibit.
Financial analysis
• For purposes of evaluating the profitability of the proposed projects, the financial
statements should be subjected to the Net Present Value (NPV), Internal Rate of
Return (IRR), and Benefit/cost Ratio (B/CR) analysis.
• This necessary in order to determine whether the capital investment will be
recovered during the course of the project’s operations. Furthermore this analysis
will justify the costs of the investment considering the returns or profits from
operation. The computation should be shown in a schedule or in the exhibit.
• In addition to the above computations, the profitability, liquidity, and solvency
ratios should be computed and analyzed. The formula is shown in exhibit.
• 
Writing a Chapter 6 of a project feasibility study: SOCIO-ECONOMIC
DESIRABILITY.

This chapter is usually considered the easiest and the shortest, but this is a very significant chapter
especially to the economy and to the community. The student will show the desirability of the proposed
project as to the following:
a. Customer. How will the proposed venture and its product/s be of help to the customer? Are there
intangible benefits?
b. Employees. How will the proposed venture be of help to its employees, to their children, and other
dependents?
c. Creditors/Suppliers. What benefits could creditors and suppliers derive in transacting with the
proposed venture.
d. Owners/partners/Stockholders. Are there advantages in investing in the business being proposed?
e. Community/Society/Church. How will the proposed venture be of help to the community? What
contributions would it give to the church, and the society as a whole?
f. Government. How will the proposed venture be of help to the government and the national economy?
Writing Chapter 7 of a project feasibility study: FINDINGS,
CONCLUSION, AND RECOMMENDATION

Findings are the answers to the statement of the problem as to

whether or not the stated objectives are attained.
Conclusions are the brief summary of all chapters highlighting all
significant findings.
Recommendation is a one sentence statement of what the student
recommends based on the findings and conclusions.
Bibliography and Appendices
BIBLIOGRAPHY of the feasibility study
• The bibliography is a list of sources used in the preparation of the project feasibility
Study. The bibliography differs from the footnote in form and in purpose. The principal
differences in form are in indention, order of the author’s name, and punctuation. The
bibliography lists complete works, whereas, a footnote cites a specific page or pages.
APPENDIX of a project feasibility study
• The appendix is not an essential part of every paper, but is a useful device to make
available to the reader materials related to the discussion but not suitable for inclusion
in the text. Such materials may be tables too detailed for the presentation in the
discussion, technical notes on methods; and schedules and forms used in collecting
materials, copies of documents not generally available to the reader and sometimes
figures or other illustrative materials.
• Characteristics of Sound Business Plan
a. Objective
b. Clear
c. Logical and Simple
d. Flexible
e. Stable
f. Complete and Integrated
• Using and implementing the business plan
The business plan is designed to guide the entrepreneur through the first year of
operation. It is important that the implementation of the strategy contain control
points to ascertain progress and to initiate contingency plans if necessary.
Measuring Plan Progress
This feedback should be simple but should provide key members of the organization with current
information in time to correct any major deviations from the goals and objectives outlined. A brief
description of each of these is given below:
• Inventory Control. By controlling inventory, the firm can ensure maximum service to the
customer. The faster the firm gets back its investment in raw materials and finished goods, the
faster that capital can be reinvested to meet additional customer needs.
• Production control. Compare the cost figures estimated in the business plan with day-to-day
operation costs. This will help to control machine time, worker hours, process time, delay time,
and downtime cost.
• Quality control. This will depend on the type of production system but is designed to make sure
that the product performs satisfactory.
• Sales Control. Information on units, dollars, specific products sold, price of sales, meeting of
delivery dates, and credit terms is useful to get a good perspective of the sales of the new
venture. In addition, an effective collection system for accounts receivable should be set up to
avoid aging of accounts and bad debts.
• Disbursements. The new venture should also control the amount of money paid out. All bills
should be reviewed to determine how much is being disbursed and for what purpose.
Updating the Business Plan
• The most effective business plan can become out-of-date if conditions
change. Environment factors such as the economy, customers, new
technology, or competition and internal factors such as the loss or
addition of key employees can all change the direction of the business
plan. Thus, it is important to be sensitive to changes in the company,
industry, and market. If these changes are likely to affect the business
plan, the entrepreneur should determine what revisions are needed. In
this manner, the entrepreneur can maintain reasonable targets and
goals and keep the new venture on a course that will increase its
probability of success.
Why some business Plans Fail?
Generally a poorly prepared business plan can be blamed on one or more of the
following factors:
1. Goals set by entrepreneur are unreasonable.
2. Goals are not measurable.
3. The entrepreneur has not made a total commitment to the business.
4. The entrepreneur has no experience in the planning business.
5. The entrepreneur has no sense of potential threats or weaknesses to the
business.
6. No customer need was established for the proposed product or service.
End