See Also:
Current Ratio Analysis
Comparison Analysis
Customer Analysis
Mixed Economy
Variance AnalysisFeasibility Study Definition
A
feasibility study, defined as the study of the feasibility of creating benefit from a given project, is one of the first steps in evaluating a business idea. Basically, a
feasibility study proposal is the analysis which establishes whether a business or project is a worthwhile investment of time.
Feasibility Study Explanation
A feasibility study, explained as the smart first step to starting any business, must be done. In regards to starting a business, a
feasibility study outline is done by asking the following questions. It all starts by asking if it is possible.
Are the business operations even possible? If so, how would the company make money? Are there customers that are willing to buy the product? Once this is established, marketing feasibility must then be studied.
How many customers are there? How much of a similar product do they buy? How much can we assume we will sell? How would the company let customers know that it exists? How would the company persuade customers to use their product? How much would the marketing and sales process cost? Will the business make enough money to support this? How much will the company charge for products? Operational questions come next when creating a
feasibility study report.
How much would the operations, which create products, cost? How many units of products will the company have to sell, with the above amount of profit from each unit, to cover marketing and operational costs? Finally, financial questions must be asked.
How much will the company make in a year? How much will the entire startup costs, with employees, equipment, and marketing expenses, be?
A feasibility study follows this method. It establishes, first, if the project is even possible. Then, if it is desired. It follows the method listed above to finally establish if there will be any benefit to owning the company after all of the effort is put forth.
Feasibility study analysis is done this way, before opening operations, to prevent an expensive mistake.
The above
feasibility study example provides the main questions to ask when considering starting a project or business. Additional questions will need to be answered based on situational needs. Though no single process decides the answer, an indication of the results can be assumed before the company is created.
A
feasibility study checklist is available in books or online. Find a few books and reports you like. By following the methods in each of these books all of the unique questions will be answered and the company concept can be proven over time.