- Step One: Conduct a Preliminary Analysis. …
- Step Two: Prepare a Projected Income Statement. …
- Step Three: Conduct a Market Survey. …
- Step Four: Plan Business Organization and Operations. …
- Step Five: Prepare an Opening Day Balance Sheet. …
- Step Six: Review and Analyze All Data.
How to Conduct a Feasibility Study – Project Management Training
When to use a feasibility study
Before making a significant strategic choice, businesses typically conduct feasibility studies to make sure the action will be completed effectively, efficiently, and with the fewest possible risks.
Some common times businesses use a feasibility study include before:
What is a feasibility study?
A feasibility study is one that a company conducts to help them decide whether a particular course of action is wise. Essentially, the purpose of these studies is to assess the operational or economic feasibility of a proposed action. Additionally, organizations use feasibility studies to better understand the risks associated with a particular action and to prepare for those risks as the action is implemented.
A feasibility study is different than a business plan. A feasibility study assists an existing business in creating a plan to improve its operations or expand into new markets, whereas a business plan outlines the steps necessary to turn a business idea into reality.
How to complete a feasibility study
You can take the following five steps to conduct a feasibility study:
1.Perform preliminary analysis
Preliminary research is where a feasibility study should begin. In this step, you’ll begin considering how feasible the action is and what it entails. Some questions youll want to answer during this stage include:
A proper feasibility study takes time and resources. To decide whether a comprehensive feasibility study is worthwhile, a preliminary analysis is conducted. You can move forward with conducting a more thorough feasibility study if you decide that the proposed course of action is worthwhile researching further.
2. Create a study outline
After that, you can draft an outline that clarifies each component of your feasibility study. The goal is to summarize the key points of your research so that you have a framework to use as you move forward. Consider how you will respond to the following inquiries during your feasibility study as you draft your outline.
Make a thorough outline that concentrates on each of these questions. Then explain how you’ll approach each of them and what kind of response you’ll need to decide whether your course of action is feasible.
3. Conduct market research
Finding out whether your proposed course of action is realistic can be accomplished by researching your competitors and the market. If another organization has carried out a comparable action, you can find out not only whether your own action is feasible but also what steps can help you achieve your goal.
Some common examples of ways to research the marketplace include:
You should be able to more fully respond to the queries in the preceding step with the aid of market research. For instance, Sunshine Toys wants to introduce a brand-new kid’s toy. Focus groups and surveys show that customers are very interested in the new toy they are proposing, they say. Additionally, they learn from looking at the websites of their biggest rivals that they do not yet have similar products, leaving the market open.
4. Conduct organizational research
The next step is to assess whether your organization can carry out your action plan if you determine that there is a market for it. The financial aspect of the desired action is one essential component to look at. You should estimate the initial cost, the kind of long-term investments, and any other costs that your organization will incur during this phase. Think about things like buying supplies or materials, investing in real estate, and hiring new staff.
Then, take into account whether your current team is capable of completing the suggested action. For instance, they might require more assistance or staff.
Lastly, determine if you have the right tools. For instance, your business may need specific tools or specialized technology. You should also consider how much this equipment will cost and whether your team will be able to use it efficiently.
You should fully grasp whether you have the requirements to complete your action by the end of this phase. This step will also show you if there are any changes you need to make before you can take the action.
5. Analyze your results
After gathering all the information, you must then analyze the findings to determine, for example, whether your organization can handle the action or whether there is a market for it. You can make sure that your findings are trustworthy, accurate, and in the best interest of your project by carefully reviewing each section of the report and making sure that you filled it out correctly.
In this step, you’ll determine whether the action plan is realistic and what kinds of risks are involved. You can use your findings to help you plan out your next steps, such as developing a product outline or initiating the hiring process, if the results indicate that your proposed course of action is feasible.
FAQ
What are the 3 parts of feasibility study?
Contents of a Feasibility Study Technology Considerations. Product or Service Marketplace. Identification of Specific Market.
