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How to conduct a feasibility study: Template and examples

feasibility study business plan sample

Opportunities are everywhere. Some opportunities are small and don’t require many resources. Others are massive and need further analysis and evaluation.

How To Conduct A Feasibility Study: Template And Examples

One of your key responsibilities as a product manager is to evaluate the potential success of those opportunities before investing significant money, time, and resources. A feasibility study, also known as a feasibility assessment or feasibility analysis, is a critical tool that can help product managers determine whether a product idea or opportunity is viable, feasible, and profitable.

So, what is a feasibility analysis? Why should product managers use it? And how do you conduct one?

What is a feasibility study?

A feasibility study is a systematic analysis and evaluation of a product opportunity’s potential to succeed. It aims to determine whether a proposed opportunity is financially and technically viable, operationally feasible, and commercially profitable.

A feasibility study typically includes an assessment of a wide range of factors, including the technical requirements of the product, resources needed to develop and launch the product, the potential market gap and demand, the competitive landscape, and economic and financial viability.

Based on the analysis’s findings, the product manager and their product team can decide whether to proceed with the product opportunity, modify its scope, or pursue another opportunity and solve a different problem.

Conducting a feasibility study helps PMs ensure that resources are invested in opportunities that have a high likelihood of success and align with the overall objectives and goals of the product strategy .

What are feasibility analyses used for?

Feasibility studies are particularly useful when introducing entirely new products or verticals. Product managers can use the results of a feasibility study to:

  • Assess the technical feasibility of a product opportunity — Evaluate whether the proposed product idea or opportunity can be developed with the available technology, tools, resources, and expertise
  • Determine a project’s financial viability — By analyzing the costs of development, manufacturing, and distribution, a feasibility study helps you determine whether your product is financially viable and can generate a positive return on investment (ROI)
  • Evaluate customer demand and the competitive landscape — Assessing the potential market size, target audience, and competitive landscape for the product opportunity can inform decisions about the overall product positioning, marketing strategies, and pricing
  • Identify potential risks and challenges — Identify potential obstacles or challenges that could impact the success of the identified opportunity, such as regulatory hurdles, operational and legal issues, and technical limitations
  • Refine the product concept — The insights gained from a feasibility study can help you refine the product’s concept, make necessary modifications to the scope, and ultimately create a better product that is more likely to succeed in the market and meet users’ expectations

How to conduct a feasibility study

The activities involved in conducting a feasibility study differ from one organization to another. Also, the threshold, expectations, and deliverables change from role to role.

For a general set of guidelines to help you get started, here are some basic steps to conduct and report a feasibility study for major product opportunities or features.

1. Clearly define the opportunity

Imagine your user base is facing a significant problem that your product doesn’t solve. This is an opportunity. Define the opportunity clearly, support it with data, talk to your stakeholders to understand the opportunity space, and use it to define the objective.

2. Define the objective and scope

Each opportunity should be coupled with a business objective and should align with your product strategy.

feasibility study business plan sample

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feasibility study business plan sample

Determine and clearly communicate the business goals and objectives of the opportunity. Align those objectives with company leaders to make sure everyone is on the same page. Lastly, define the scope of what you plan to build.

3. Conduct market and user research

Now that you have everyone on the same page and the objective and scope of the opportunity clearly defined, gather data and insights on the target market.

Include elements like the total addressable market (TAM) , growth potential, competitors’ insights, and deep insight into users’ problems and preferences collected through techniques like interviews, surveys, observation studies, contextual inquiries, and focus groups.

4. Analyze technical feasibility

Suppose your market and user research have validated the problem you are trying to solve. The next step should be to, alongside your engineers, assess the technical resources and expertise needed to launch the product to the market.

Dig deeper into the proposed solution and try to comprehend the technical limitations and estimated time required for the product to be in your users’ hands.

5. Assess financial viability

If your company hasa product pricing team, work closely with them to determine the willingness to pay (WTP) and devise a monetization strategy for the new feature.

Conduct a comprehensive financial analysis, including the total cost of development, revenue streams, and the expected return on investment (ROI) based on the agreed-upon monetization strategy.

6. Evaluate potential risks

Now that you have almost a complete picture, identify the risks associated with building and launching the opportunity. Risks may include things like regulatory hurdles, technical limitations, and any operational risks.

7. Decide, prepare, and share

Based on the steps above, you should end up with a report that can help you decide whether to pursue the opportunity or not. Either way, prepare your findings, including any recommended modifications to the product scope, and present your final findings and recommendations to your stakeholders.

Make sure to prepare an executive summary for your C-suite; they will be the most critical stakeholders and the decision-makers at the end of the meeting.

Feasibility study example

Imagine you’re a product manager at a digital software company that specializes in building project management tools.

Your team has identified a potential opportunity to expand the product offering by developing a new AI-based feature that can automatically prioritize tasks for users based on their deadlines, workload, and importance.

To assess the viability of this opportunity, you can conduct a feasibility study. Here’s how you might approach it according to the process described above:

  • Clearly define the opportunity — In this case, the opportunity is the development of an AI-based task prioritization feature within the existing project management software
  • Define the objective and scope — The business objective is to increase user productivity and satisfaction by providing an intelligent task prioritization system. The scope includes the integration of the AI-based feature within the existing software, as well as any necessary training for users to understand and use the feature effectively
  • Conduct market and user research — Investigate the demand for AI-driven task prioritization among your target audience. Collect data on competitors who may already be offering similar features and determine the unique selling points of your proposed solution. Conduct user research through interviews, surveys, and focus groups to understand users’ pain points regarding task prioritization and gauge their interest in the proposed feature
  • Analyze technical feasibility — Collaborate with your engineering team to assess the technical requirements and challenges of developing the AI-based feature. Determine whether your team has the necessary expertise to implement the feature and estimate the time and resources required for its development
  • Assess financial viability — Work with your pricing team to estimate the costs associated with developing, launching, and maintaining the AI-based feature. Analyze the potential revenue streams and calculate the expected ROI based on various pricing models and user adoption rates
  • Evaluate potential risks — Identify any risks associated with the development and implementation of the AI-based feature, such as data privacy concerns, potential biases in the AI algorithm, or the impact on the existing product’s performance
  • Decide, prepare, and share — Based on your analysis, determine whether the AI-based task prioritization feature is a viable opportunity for your company. Prepare a comprehensive report detailing your findings and recommendations, including any necessary modifications to the product scope or implementation plan. Present your findings to your stakeholders and be prepared to discuss and defend your recommendations

Feasibility study template

The following feasibility study template is designed to help you evaluate the feasibility of a product opportunity and provide a comprehensive report to inform decision-making and guide the development process.

Remember that each study will be unique to your product and market, so you may need to adjust the template to fit your specific needs.

  • Briefly describe the product opportunity or feature you’re evaluating
  • Explain the problem it aims to solve or the value it will bring to users
  • Define the business goals and objectives for the opportunity
  • Outline the scope of the product or feature, including any key components or functionality
  • Summarize the findings from your market research, including data on the target market, competitors, and unique selling points
  • Highlight insights from user research, such as user pain points, preferences, and potential adoption rates
  • Detail the technical requirements and challenges for developing the product or feature
  • Estimate the resources and expertise needed for implementation, including any necessary software, hardware, or skills
  • Provide an overview of the costs associated with the development, launch, and maintenance of the product or feature
  • Outline potential revenue streams and calculate the expected ROI based on various pricing models and user adoption rates
  • Identify any potential risks or challenges associated with the development, implementation, or market adoption of the product or feature
  • Discuss how these risks could impact the success of the opportunity and any potential mitigation strategies
  • Based on your analysis, recommend whether to proceed with the opportunity, modify the scope, or explore other alternatives
  • Provide a rationale for your recommendation, supported by data and insights from your research
  • Summarize the key findings and recommendations from your feasibility study in a concise, easily digestible format for your stakeholders

Overcoming stakeholder management challenges

The ultimate challenge that faces most product managers when conducting a feasibility study is managing stakeholders .

Stakeholders may interfere with your analysis, jumping to conclude that your proposed product or feature won’t work and deeming it a waste of resources. They may even try to prioritize your backlog for you.

Here are some tips to help you deal with even the most difficult stakeholders during a feasibility study:

  • Use hard data to make your point — Never defend your opinion based on your assumptions. Always show them data and evidence based on your user research and market analysis
  • Learn to say no — You are the voice of customers, and you know their issues and how to monetize them. Don’t be afraid to say no and defend your team’s work as a product manager
  • Build stakeholder buy-in early on — Engage stakeholders from the beginning of the feasibility study process by involving them in discussions and seeking their input. This helps create a sense of ownership and ensures that their concerns and insights are considered throughout the study
  • Provide regular updates and maintain transparency — Keep stakeholders informed about the progress of the feasibility study by providing regular updates and sharing key findings. This transparency can help build trust, foster collaboration, and prevent misunderstandings or misaligned expectations
  • Leverage stakeholder expertise — Recognize and utilize the unique expertise and knowledge that stakeholders bring to the table. By involving them in specific aspects of the feasibility study where their skills and experience can add value, you can strengthen the study’s outcomes and foster a more collaborative working relationship

Final thoughts

A feasibility study is a critical tool to use right after you identify a significant opportunity. It helps you evaluate the potential success of the opportunity, analyze and identify potential challenges, gaps, and risks in the opportunity, and provides a data-driven approach in the market insights to make an informed decision.

By conducting a feasibility study, product teams can determine whether a product idea is profitable, viable, feasible, and thus worth investing resources into. It is a crucial step in the product development process and when considering investments in significant initiatives such as launching a completely new product or vertical.

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  • How to use a feasibility study in proje ...

How to use a feasibility study in project management

Julia Martins contributor headshot

It can be exciting to run a large, complex project that has a huge potential impact on your organization. On the one hand, you’re driving real change. On the other, failure is intimidating. 

What is a feasibility study? 

A feasibility study—sometimes called a feasibility analysis or feasibility report—is a way to evaluate whether or not a project plan could be successful. A feasibility study evaluates the practicality of your project plan in order to judge whether or not you’re able to move forward with the project. 

It does so by answering two questions: 

Does our team have the required tools or resources to complete this project? 

Will there be a high enough return on investment to make the project worth pursuing? 

Feasibility studies are important for projects that represent significant investments for your business. Projects that also have a large potential impact on your presence in the market may also require a feasibility study. 

As the project manager , you may not be directly responsible for driving the feasibility study, but it’s important to know what these studies are. By understanding the different elements that go into a feasibility study, you can better support the team driving the feasibility study and ensure the best outcome for your project.

When should you conduct a feasibility study

A feasibility study should be conducted after the project has been pitched but before any work has actually started. The study is part of the project planning process. In fact, it’s often done in conjunction with a SWOT analysis or project risk assessment , depending on the specific project. 

Feasibility studies help: 

Confirm market opportunities before committing to a project

Narrow your business alternatives

Create documentation about the benefits and detriments of your proposed initiative

Provide more information before making a go/no go decision

You likely don’t need a feasibility study if:

You already know the project is feasible

You’ve run a similar project in the past

Your competitors are succeeding with a similar initiative in market

The project is small, straightforward, and has minimal long-term business impact

Your team ran a similar feasibility study within the past three years

One thing to keep in mind is that a feasibility study is not a project pitch. During a project pitch, you’re evaluating whether or not the project is a good idea for your company, and whether the goals of the project are in line with your overall strategic plan. Typically, once you’ve established that the project is a good idea, you’d then run a feasibility study to confirm the project is possible with the tools and resources you have at your disposal. 

Feasibility study vs. project charter

A project charter is a relatively informal document to pitch your project to stakeholders. Think of the charter like an elevator pitch of your project objectives, scope, and responsibilities. Typically, your project sponsor or executive stakeholders reviews the charter before ratifying the project. 

A feasibility study should be implemented after the project charter has been ratified. This isn’t a document to pitch whether or not the project is in line with your team’s goals—rather, it’s a way to ensure the project is something you and your team can accomplish. 

Feasibility study vs. business case

A business case is a more formalized version of the project charter. While you’d typically create a project charter for small or straightforward initiatives, you should create a business case if you are pitching a large, complex initiative that will make a major impact on the business. This longer, more formal document will also include financial information, and typically involves more senior stakeholders. 

After your business case is approved by relevant stakeholders, you’d then run a feasibility study to make sure the work is doable. If you find it isn’t, you might return to your executive stakeholders and request more resources, tools, or time in order to ensure your business case is feasible.

Feasibility study vs. business plan

A business plan is a formal document of your organization’s goals. You typically write a business plan when founding your company, or when your business is going through a significant shift. Your business plan informs a lot of other business decisions, including your three to five year strategic plan . 

As you implement your business and strategic plan, you’ll invest in individual projects. A feasibility study is a way to evaluate the practicality of any given individual project or initiative. 

4 elements of a feasibility analysis

There are four main elements that go into a feasibility study: technical feasibility, financial feasibility, market feasibility (or market fit), and operational feasibility. You may also see these referred to as the four types of feasibility studies, though most feasibility studies actually include a review of all four elements. 

Technical feasibility

A technical feasibility study reviews the technical resources available for your project. This study determines if you have the right equipment, enough equipment, and the right technical knowledge to complete your project objectives . For example, if your project plan proposes creating 50,000 products per month, but you can only produce 30,000 products per month in your factories, this project isn’t technically feasible. 

Financial feasibility

Financial feasibility describes whether or not your project is fiscally viable. A financial feasibility report includes a cost/benefit analysis of the project. It also forecasts an expected return on investment (ROI), as well as outlines any financial risks. The goal at the end of the financial feasibility study is to understand the economic benefits the project will drive. 

Market feasibility

The market feasibility study is an evaluation of how your team expects the project’s deliverables to perform in the market. This part of the report includes a market analysis, market competition breakdown, and sales projections. 

Operational feasibility

An operational feasibility study evaluates whether or not your organization is able to complete this project. This includes staffing requirements, organizational structure, and any applicable legal requirements. At the end of the operational feasibility study, your team will have a sense of whether or not you have the resources, skills, and competencies to complete this work. 

Feasibility study checklist

Most feasibility studies are structured in a similar way. These documents serve as an assessment of the practicality of a proposed business idea. Creating a clear feasibility study helps project stakeholders during the decision making process. 

A feasibility study contains: 

An executive summary describing the project’s overall viability

A description of the product or service being developed during this project

Any technical considerations , including technology, equipment, or staffing

The market survey , including a study of the current market and the marketing strategy 

The operational feasibility study , evaluating whether or not your team’s current organizational structure can support this initiative

The project timeline

Financial projections based on your financial feasibility report

6 steps to conduct a feasibility study

You likely won’t be conducting the feasibility study yourself, but you will probably be called on to provide insight and information. To conduct a feasibility study, hire a trained consultant or, if you have an in-house project management office (PMO) , ask if they take on this type of work. In general, here are the steps they’ll take to complete this work: 

1. Run a preliminary analysis

Creating a feasibility study is a time-intensive process. Before diving into the feasibility study, it’s important to evaluate the project for any obvious and insurmountable roadblocks. For example, if the project requires significantly more budget than your organization has available, you likely won’t be able to complete it. Similarly, if the project deliverables need to be live and in market by a certain date, but they won’t be available for several months after the fact, the project likely isn’t feasible either. These types of large-scale obstacles make a feasibility study unnecessary, because it’s clear the project is not viable. 

2. Evaluate financial feasibility

Think of the financial feasibility study as the projected income statement for the project. This part of the feasibility study clarifies the expected project income and outlines what your organization needs to invest—in terms of time and money—in order to hit the project objectives. 

During the financial feasibility study, take into account whether or not the project will impact your business's cash flow. Depending on the complexity of the initiative, your internal PMO or external consultant may want to work with your financial team to run a cost-benefit analysis of the project. 

3. Run a market assessment

The market assessment, or market feasibility study, is a chance to identify the demand in the market. This study offers a sense of expected revenue for the project, and any potential market risks you could run into. 

The market assessment, more than any other part of the feasibility study, is a chance to evaluate whether or not there’s an opportunity in the market. During this study, it’s critical to evaluate your competitor’s positions and analyze demographics to get a sense of how the project will do. 

4. Consider technical and operational feasibility

Even if the financials are looking good and the market is ready, this initiative may not be something your organization can support. To evaluate operational feasibility, consider any staffing or equipment requirements this project needs. What organizational resources—including time, money, and skills—are necessary in order for this project to succeed? 

Depending on the project, it may also be necessary to consider the legal impact of the initiative. For example, if the project involves developing a new patent for your product, you will need to involve your legal team and incorporate that requirement into the project plan. 

5. Review project points of vulnerability

At this stage, your internal PMO team or external consultant have looked at all four elements of your feasibility study—financials, market analysis, technical feasibility, and operational feasibility. Before running their recommendations by you and your stakeholders, they will review and analyze the data for any inconsistencies. This includes ensuring the income statement is in line with your market analysis. Similarly, now that they’ve run a technical feasibility study, are any liabilities too big of a red flag? (If so, create a contingency plan !) 

Depending on the complexity of your project, there won’t always be a clear answer. A feasibility analysis doesn’t provide a black and white decision for a complex problem. Rather, it helps you come to the table with the right questions—and answers—so you can make the best decision for your project and for your team. 

6. Propose a decision

The final step of the feasibility study is an executive summary touching on the main points and proposing a solution. 

Depending on the complexity and scope of the project, your internal PMO or external consultant may share the feasibility study with stakeholders or present it to the group in order to field any questions live. Either way, with the study in hand, your team now has the information you need to make an informed decision. 

Achieve project success with Asana

Done with your feasibility study? You’re ready to run a project! Set your project up for success by tracking your progress in a work management tool , like Asana. From the small stuff to the big picture, Asana organizes work so teams know what to do, why it matters, and how to get it done. 

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Everything You Need to Know About Business Feasibility Studies

feasibility study business plan sample

  • Abstrakt Marketing
  • February 23, 2023

Studies show that of all the factors involved in new business undertakings, proper planning is the strongest indicator of project success . It’s 2023—there are mountains of research available on every topic. If you want to achieve organizational success, you have to take advantage of it.

One of the best ways to prepare your business is with a business feasibility study. A feasibility study breaks down the practicality of a project and determines how likely it is to succeed. Keep reading to learn more about feasibility studies, how they can benefit your business, and to see an example!

What Is a Feasibility Study?

A feasibility study is an in-depth analysis that examines whether or not a business can successfully pursue a project or other new process. It examines the state of your business as well as the opportunities and threats in a project to determine whether it’s worth attempting. This is accomplished by pooling together a wide array of resources to come to a definitive conclusion.

What’s the point of a feasibility study?

It’s in the name—a feasibility study determines whether or not something is feasible or realistically able to be accomplished. It’s usually prepared for high-level executives with the purpose of helping them make the most informed decision.

Feasibility studies are versatile and can be conducted for a wide range of business undertakings, including:

  • Opening a new retail location or production facility
  • Introducing a new product or adjusting your product lineup
  • Expanding into a new market sector or geographic region
  • Investing in or implementing new technology
  • Acquiring a new company or merging with a competitor

You can even conduct a feasibility study for a new business! Feasibility studies are the best way to prepare for any new business undertaking.

How’s a feasibility study relative to a business plan?

Many confuse feasibility studies with business plans. While the two are somewhat similar, they answer fundamentally different questions.

A feasibility plan answers:

Should we do this?

A business plan answers:

How do we do this?

Think of a feasibility study as a saddle and a business plan as a horse. Just like you need a saddle and stirrups to control a horse, you need a feasibility study to guide and inform your business plan. Sure, you can try to form a business plan without any prep, but just like riding a horse without a saddle, you’ll probably get bucked.

Interested in Learning More About Business Plans?

How much does a feasibility study cost.

Feasibility analysis isn’t easy—it requires time and exhaustive research to be executed correctly. It’s hard to put an exact number on the cost of a study because it’s highly dependent on factors like:

  • The type of feasibility study being conducted
  • The scope of a proposed plan
  • The size of the business involved

Generally speaking, a feasibility plan for a small business costs between $5,000 to $10,000. However, this can widely vary due to several factors.

How long does a feasibility plan take to prepare?

It takes an average of 60 to 120 days to prepare a feasibility study correctly. A properly conducted feasibility study demands an enormous amount of research.

What’s included in a feasibility study?

Now that we better understand the purpose of a feasibility study, let’s dive into what you can expect from one. A feasibility study should have these elements:

Executive Summary

Every feasibility study begins with an executive summary. This should be an easily digestible, high-level overview of the report’s findings. Keep your executive summary as short as possible and don’t forget to include your final recommendation.

Technological Considerations and Requirements

This section outlines the technological considerations and operational factors that influence your project’s success. These considerations should cover what’s necessary to execute your plan, including:

  • Tools & Equipment
  • Hardware & Software
  • Necessary Programs & Technology

This section’s objective is to answer whether or not you have the technological resources to complete a project. If the answer is no, it should find out if those resources can be acquired.

Young Man Having A Bussines Presentation With Client At The Office_

Market Research

Market research is the bulk of most business feasibility studies. This portion of the feasibility report should examine the markets involved in your project’s success. This section should include consumer attitudes and behaviors and competitive analysis. The ultimate purpose of a market research section is to better understand your position in the environment and how your project fits into it. 

Marketing Strategy

The marketing strategy section should break down specific marketing tactics. What’s your target market? It should answer questions about:

  • Demographics
  • Psychographics
  • Geographics

How do you plan on meeting their needs? What unique benefits does your company offer when compared to the competition? How do you plan on meeting your target market’s needs? This section is responsible for answering all of these questions and more.

Resource and Staffing Requirements

This portion of a business feasibility plan should examine your human capital needs. Do you have the necessary manpower to execute your project? A feasibility report should break down the required human capital to complete your project, including what specific roles are involved, how much time they have to invest, and more.

Estimated Timeline

How long would the project take to execute? Would this timeline work with your organization’s business cycle and stage of growth? What would be significant markers of progress and success toward the long-term success of the project? The timeline question should answer these questions and serve as an overarching assessment of the practicality of your project’s timeline.

Financial Details

If you don’t have the financial resources to execute a project, it simply isn’t feasible. Your study should break down the financial projections , costs, and risks associated with your project. Analysis should include costs such as:

  • Human Resources
  • Real Estate

Additionally, this section should analyze the consequences that project failure would have on your business’s overarching financial health.

Findings and Recommendations

The final portion of the feasibility study should organize all of the information above and make a final recommendation for the project. Is it feasible? If not, why? If so, what are the key takeaways?

What stage of growth is your business in? What are your goals? How are the two related? Combine this information to better understand what your KPIs should be.

Feasibility Study Sample

Still not sure how to choose the right KPI? GreenGate is here to lend a hand. We’re expert business consultants and can help your business define, achieve, and exceed its goals. Contact us today to learn how we can help take your business to the next level. Now that we understand what’s included in a feasibility study, let’s look at an example of a business feasibility study’s executive summary.

In this example, Snoop’s Unicycles (a sole proprietorship owned by Snoop Shepard) is considering expanding from its single location in St. Louis, Missouri into Armenia. All of Snoop’s European friends love unicycles, so he’s sure his business will be a hit in the untapped Armenian unicycling market. 

Fortunately, Snoop is a shrewd businessman, so he got in touch with professionals that developed a feasibility report for him. Here’s what they had to say: 

In regards to your proposal for organizational expansion into Armenia (codenamed Operation Cyclops per your insistence), we’ve deemed the project to be unfeasible and do not recommend moving forward with it. 

We reached this conclusion by analyzing relevant factors, including:

  • Technological Limitations : Your current unicycle supply chain is based entirely in St. Louis, MO. Acquiring and outfitting a manufacturer to develop unicycles in Armenia would be financially unfeasible. Additionally, unicycle importation is impossible, as you lack the technical resources to transport your Missouri-made product.
  • Market Factors: After conducting extensive research in the Armenian market, we’ve discovered that the Armenian populace is exceptionally averse to unicycles. Popular forms of Armenian transport include cars, public transportation, and cycling. While this interest in cycling seemed promising, 98.4% of Armenians flew into a violent rage and attacked the interviewer when asked about unicycles. The market is unprepared for your product at this time.
  • Lacking Resources: There are minimal commercial real estate opportunities that would meet your needs. Acquiring a suitable location without extensive retrofitting would be near impossible. Furthermore, your organization’s patented unicycle formulation relies on zinc, which we’ve learned is difficult to source in Armenia.
  • Insufficient Financing : Assuming that 2% of your uncollected accounts become bad debt, your business has $0.24 in working capital. This is not enough to finance Armenian expansion, and frankly, not enough to cover the cost of this feasibility study. 

With these factors in mind, we cannot recommend moving forward with Operation Cyclops and must relay that it is an infeasible project. We suggest improving your working capital before exploring other territories, particularly those within the Southern Caucasus.

Looks like Snoop saved himself a world of trouble! Had he not done this feasibility study, he would have gone all in on Operation Cyclops and may have gone out of business!

Get a Comprehensive Feasibility Study With GreenGate

Too many businesses attempt ambitious undertakings without the proper preparation and end up closing their doors. Give yourself a foundation for success with a business feasibility study from GreenGate. Contact us today to get started on your feasibility study!

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  • 11.3 Conducting a Feasibility Analysis
  • Introduction
  • 1.1 Entrepreneurship Today
  • 1.2 Entrepreneurial Vision and Goals
  • 1.3 The Entrepreneurial Mindset
  • Review Questions
  • Discussion Questions
  • Case Questions
  • Suggested Resources
  • 2.1 Overview of the Entrepreneurial Journey
  • 2.2 The Process of Becoming an Entrepreneur
  • 2.3 Entrepreneurial Pathways
  • 2.4 Frameworks to Inform Your Entrepreneurial Path
  • 3.1 Ethical and Legal Issues in Entrepreneurship
  • 3.2 Corporate Social Responsibility and Social Entrepreneurship
  • 3.3 Developing a Workplace Culture of Ethical Excellence and Accountability
  • 4.1 Tools for Creativity and Innovation
  • 4.2 Creativity, Innovation, and Invention: How They Differ
  • 4.3 Developing Ideas, Innovations, and Inventions
  • 5.1 Entrepreneurial Opportunity
  • 5.2 Researching Potential Business Opportunities
  • 5.3 Competitive Analysis
  • 6.1 Problem Solving to Find Entrepreneurial Solutions
  • 6.2 Creative Problem-Solving Process
  • 6.3 Design Thinking
  • 6.4 Lean Processes
  • 7.1 Clarifying Your Vision, Mission, and Goals
  • 7.2 Sharing Your Entrepreneurial Story
  • 7.3 Developing Pitches for Various Audiences and Goals
  • 7.4 Protecting Your Idea and Polishing the Pitch through Feedback
  • 7.5 Reality Check: Contests and Competitions
  • 8.1 Entrepreneurial Marketing and the Marketing Mix
  • 8.2 Market Research, Market Opportunity Recognition, and Target Market
  • 8.3 Marketing Techniques and Tools for Entrepreneurs
  • 8.4 Entrepreneurial Branding
  • 8.5 Marketing Strategy and the Marketing Plan
  • 8.6 Sales and Customer Service
  • 9.1 Overview of Entrepreneurial Finance and Accounting Strategies
  • 9.2 Special Funding Strategies
  • 9.3 Accounting Basics for Entrepreneurs
  • 9.4 Developing Startup Financial Statements and Projections
  • 10.1 Launching the Imperfect Business: Lean Startup
  • 10.2 Why Early Failure Can Lead to Success Later
  • 10.3 The Challenging Truth about Business Ownership
  • 10.4 Managing, Following, and Adjusting the Initial Plan
  • 10.5 Growth: Signs, Pains, and Cautions
  • 11.1 Avoiding the “Field of Dreams” Approach
  • 11.2 Designing the Business Model
  • 11.4 The Business Plan
  • 12.1 Building and Connecting to Networks
  • 12.2 Building the Entrepreneurial Dream Team
  • 12.3 Designing a Startup Operational Plan
  • 13.1 Business Structures: Overview of Legal and Tax Considerations
  • 13.2 Corporations
  • 13.3 Partnerships and Joint Ventures
  • 13.4 Limited Liability Companies
  • 13.5 Sole Proprietorships
  • 13.6 Additional Considerations: Capital Acquisition, Business Domicile, and Technology
  • 13.7 Mitigating and Managing Risks
  • 14.1 Types of Resources
  • 14.2 Using the PEST Framework to Assess Resource Needs
  • 14.3 Managing Resources over the Venture Life Cycle
  • 15.1 Launching Your Venture
  • 15.2 Making Difficult Business Decisions in Response to Challenges
  • 15.3 Seeking Help or Support
  • 15.4 Now What? Serving as a Mentor, Consultant, or Champion
  • 15.5 Reflections: Documenting the Journey
  • A | Suggested Resources

Learning Objectives

By the end of this section, you will be able to:

  • Describe the purpose of a feasibility analysis
  • Describe and develop the parts of a feasibility analysis
  • Understand how to apply feasibility outcomes to a new venture

As the name suggests, a feasibility analysis is designed to assess whether your entrepreneurial endeavor is, in fact, feasible or possible. By evaluating your management team, assessing the market for your concept, estimating financial viability, and identifying potential pitfalls, you can make an informed choice about the achievability of your entrepreneurial endeavor. A feasibility analysis is largely numbers driven and can be far more in depth than a business plan (discussed in The Business Plan ). It ultimately tests the viability of an idea, a project, or a new business. A feasibility study may become the basis for the business plan, which outlines the action steps necessary to take a proposal from ideation to realization. A feasibility study allows a business to address where and how it will operate, its competition, possible hurdles, and the funding needed to begin. The business plan then provides a framework that sets out a map for following through and executing on the entrepreneurial vision.

Organizational Feasibility Analysis

Organizational feasibility aims to assess the prowess of management and sufficiency of resources to bring a product or idea to market Figure 11.12 . The company should evaluate the ability of its management team on areas of interest and execution. Typical measures of management prowess include assessing the founders’ passion for the business idea along with industry expertise, educational background, and professional experience. Founders should be honest in their self-assessment of ranking these areas.

Resource sufficiency pertains to nonfinancial resources that the venture will need to move forward successfully and aims to assess whether an entrepreneur has a sufficient amount of such resources. The organization should critically rank its abilities in six to twelve types of such critical nonfinancial resources, such as availability of office space, quality of the labor pool, possibility of obtaining intellectual property protections (if applicable), willingness of high-quality employees to join the company, and likelihood of forming favorable strategic partnerships. If the analysis reveals that critical resources are lacking, the venture may not be possible as currently planned. 46

Financial Feasibility Analysis

A financial analysis seeks to project revenue and expenses (forecasts come later in the full business plan); project a financial narrative; and estimate project costs, valuations, and cash flow projections Figure 11.13 .

The financial analysis may typically include these items:

  • A twelve-month profit and loss projection
  • A three- or four-year profit-and-loss projection
  • A cash-flow projection
  • A projected balance sheet
  • A breakeven calculation

The financial analysis should estimate the sales or revenue that you expect the business to generate. A number of different formulas and methods are available for calculating sales estimates. You can use industry or association data to estimate the sales of your potential new business. You can search for similar businesses in similar locations to gauge how your business might perform compared with similar performances by competitors. One commonly used equation for a sales model multiplies the number of target customers by the average revenue per customer to establish a sales projection:

Another critical part of planning for new business owners is to understand the breakeven point , which is the level of operations that results in exactly enough revenue to cover costs (see Entrepreneurial Finance and Accounting for an in-depth discussion on calculating breakeven points and the breakdown of cost types). It yields neither a profit nor a loss. To calculate the breakeven point, you must first understand the two types of costs: fixed and variable. Fixed costs are expenses that do not vary based on the amount of sales. Rent is one example, but most of a business’s other costs operate in this manner as well. While some costs vary from month to month, costs are described as variable only if they will increase if the company sells even one more item. Costs such as insurance, wages, and office supplies are typically considered fixed costs. Variable costs fluctuate with the level of sales revenue and include items such as raw materials, purchases to be sold, and direct labor. With this information, you can calculate your breakeven point—the sales level at which your business has neither a profit nor a loss. 47 Projections should be more than just numbers: include an explanation of the underlying assumptions used to estimate the venture’s income and expenses.

Projected cash flow outlines preliminary expenses, operating expenses, and reserves—in essence, how much you need before starting your company. You want to determine when you expect to receive cash and when you have to write a check for expenses. Your cash flow is designed to show if your working capital is adequate. A balance sheet shows assets and liabilities, necessary for reporting and financial management. When liabilities are subtracted from assets, the remainder is owners’ equity. The financial concepts and statements introduced here are discussed fully in Entrepreneurial Finance and Accounting .

Market Feasibility Analysis

A market analysis enables you to define competitors and quantify target customers and/or users in the market within your chosen industry by analyzing the overall interest in the product or service within the industry by its target market Figure 11.14 . You can define a market in terms of size, structure, growth prospects, trends, and sales potential. This information allows you to better position your company in competing for market share. After you’ve determined the overall size of the market, you can define your target market, which leads to a total available market (TAM) , that is, the number of potential users within your business’s sphere of influence. This market can be segmented by geography, customer attributes, or product-oriented segments. From the TAM, you can further distill the portion of that target market that will be attracted to your business. This market segment is known as a serviceable available market (SAM) .

Projecting market share can be a subjective estimate, based not only on an analysis of the market but also on pricing, promotional, and distribution strategies. As is the case for revenue, you will have a number of different forecasts and tools available at your disposal. Other items you may include in a market analysis are a complete competitive review, historical market performance, changes to supply and demand, and projected growth in demand over time.

Are You Ready?

You’ve been hired by a leading hotel chain to determine the market and financial potential for the development of a mixed-use property that will include a full-service hotel in downtown Orlando, located at 425 East Central Boulevard, in Orlando, Florida. The specific address is important so you can pinpoint existing competitors and overall suitability of the site. Using the information given, conduct a market analysis that can be part of a larger feasibility study.

Work It Out

Location feasibility.

You’re considering opening a boutique clothing store in downtown Atlanta. You’ve read news reports about how downtown Atlanta and the city itself are growing and undergoing changes from previous decades. With new development taking place there, you’re not sure whether such a venture is viable. Outline what steps you would need to take to conduct a feasibility study to determine whether downtown Atlanta is the right location for your planned clothing store.

Applying Feasibility Outcomes

After conducting a feasibility analysis, you must determine whether to proceed with the venture. One technique that is commonly used in project management is known as a go-or-no-go decision . This tool allows a team to decide if criteria have been met to move forward on a project. Criteria on which to base a decision are established and tracked over time. You can develop criteria for each section of the feasibility analysis to determine whether to proceed and evaluate those criteria as either “go” or “no go,” using that assessment to make a final determination of the overall concept feasibility. Determine whether you are comfortable proceeding with the present management team, whether you can “go” forward with existing nonfinancial resources, whether the projected financial outlook is worth proceeding, and make a determination on the market and industry. If satisfied that enough “go” criteria are met, you would likely then proceed to developing your strategy in the form of a business plan.

What Can You Do?

Love beyond walls.

When Terence Lester saw a homeless man living behind an abandoned, dilapidated building, he asked the man if he could take him to a shelter. The man scoffed, replying that Lester should sleep in a shelter. So he did—and he saw the problem through the homeless man’s perspective. The shelter was crowded and smelly. You couldn’t get much sleep, because others would try to steal your meager belongings. The dilapidated building provided isolation away from others, but quiet and security in its own way that the shelter could not. This experience led Lester to voluntarily live as a homeless person for a few weeks. His journey led him to create Love Beyond Walls (www.lovebeyondwalls.org), an organization that aids the homeless, among other causes. Lester didn’t conduct a formal feasibility study, but he did so informally by walking in his intended customers’ shoes—literally. A feasibility study of homelessness in a particular area could yield surprising findings that might lead to social entrepreneurial pursuits.

  • What is a social cause you think could benefit from a formal feasibility study around a potential entrepreneurial solution?
  • 46 Ulrich Kaiser. “A primer in Entrepreneurship – Chapter 3 Feasibility analysis” University of Zurich Institute for Strategy and Business Economics . n.d. https://docplayer.net/7775267-A-primer-in-entrepreneurship-chapter-3-feasibility-analysis.html
  • 47 In a preliminary financial model and business plan, startup costs should be allocated, as they are intended for one-time investments in development; pre-launch costs and other necessary expenses will not carry over once the product/solution has launched.

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  • Authors: Michael Laverty, Chris Littel
  • Publisher/website: OpenStax
  • Book title: Entrepreneurship
  • Publication date: Jan 16, 2020
  • Location: Houston, Texas
  • Book URL: https://openstax.org/books/entrepreneurship/pages/1-introduction
  • Section URL: https://openstax.org/books/entrepreneurship/pages/11-3-conducting-a-feasibility-analysis

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What Is a Feasibility Study? How to Conduct One for Your Project

ProjectManager

Table of Contents

What is a feasibility study, what’s the importance of a feasibility study, what is included in a feasibility study report, types of feasibility study.

  • 7 Steps To Do a Feasibility Study

Feasibility Study Examples

Why is a feasibility study so important in project management? For one, the feasibility study or feasibility analysis is the foundation upon which your project plan resides. That’s because the feasibility analysis determines the viability of your project. Now that you know the importance, read on to learn what you need to know about feasibility studies.

A feasibility study is simply an assessment of the practicality of a proposed project plan or method. This is done by analyzing technical, economic, legal, operational and time feasibility factors. Just as the name implies, you’re asking, “Is this feasible?” For example, do you have or can you create the technology that accomplishes what you propose? Do you have the people, tools and resources necessary? And, will the project get you the ROI you expect?

feasibility study business plan sample

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Feasibility study template

Use this free Feasibility Study Template for Word to manage your projects better.

A project feasibility study should be done during the project management life cycle after the business case has been completed. So, that’s the “what” and the “when” but how about the “why?” Why is it important to conduct a feasibility study?

An effective feasibility study points a project in the right direction by helping decision-makers have a holistic view of the potential benefits, disadvantages, barriers and constraints that could affect its outcome. The main purpose of a feasibility study is to determine whether the project can be not only viable but also beneficial from a technical, financial, legal and market standpoint.

The findings of your project feasibility study are compiled in a feasibility report that usually includes the following elements.

  • Executive summary
  • Description of product/service
  • Technology considerations
  • Product/service marketplace
  • Marketing strategy
  • Organization/staffing
  • Financial projections
  • Findings and recommendations

Free Feasibility Study Template

Use this free feasibility study template for Word to begin your own feasibility study. It has all the fundamental sections for you to get started, and it’s flexible enough to adapt to your specific needs. Download yours today.

Free feasibility study template

There are many things to consider when determining project feasibility, and there are different types of feasibility studies you might conduct to assess your project from different perspectives.

Pre-Feasibility Study

A pre-feasibility study, as its name suggests, it’s a process that’s undertaken before the feasibility study. It involves decision-makers and subject matter experts who will prioritize different project ideas or approaches to quickly determine whether the project has fundamental technical, financial, operational or any other evident flaws. If the project proposal is sound, a proper feasibility study will follow.

Technical Feasibility Study

A technical feasibility study consists in determining if your organization has the technical resources and expertise to meet the project requirements . A technical study focuses on assessing whether your organization has the necessary capabilities that are needed to execute a project, such as the production capacity, facility needs, raw materials, supply chain and other inputs. In addition to these production inputs, you should also consider other factors such as regulatory compliance requirements or standards for your products or services.

Economic Feasibility Study

Also called financial feasibility study, this type of study allows you to determine whether a project is financially feasible. Economic feasibility studies require the following steps:

  • Before you can start your project, you’ll need to determine the seed capital, working capital and any other capital requirements, such as contingency capital. To do this, you’ll need to estimate what types of resources will be needed for the execution of your project, such as raw materials, equipment and labor.
  • Once you’ve determined what project resources are needed, you should use a cost breakdown structure to identify all your project costs.
  • Identify potential sources of funding such as loans or investments from angel investors or venture capitalists.
  • Estimate the expected revenue, profit margin and return on investment of your project by conducting a cost-benefit analysis , or by using business forecasting techniques such as linear programming to estimate different future outcomes under different levels of production, demand and sales.
  • Estimate your project’s break-even point.
  • Conduct a financial benchmark analysis with industrial averages and specific competitors in your industry.
  • Use pro forma cash flow statements, financial statements, balance sheets and other financial projection documents.

Legal Feasibility Study

Your project must meet legal requirements including laws and regulations that apply to all activities and deliverables in your project scope . In addition, think about the most favorable legal structure for your organization and its investors. Each business legal structure has advantages and disadvantages when it comes to liability for business owners, such as limited liability companies (LLCs) or corporations, which reduce the liability for each business partner.

Market Feasibility Study

A market feasibility study determines whether your project has the potential to succeed in the market. To do so, you’ll need to analyze the following factors:

  • Industry overview: Assess your industry, such as year-over-year growth, identify key direct and indirect competitors, availability of supplies and any other trends that might affect the future of the industry and your project.
  • SWOT analysis: A SWOT analysis allows organizations to determine how competitive an organization can be by examining its strengths, weaknesses and the opportunities and threats of the market. Strengths are the operational capabilities or competitive advantages that allow an organization to outperform its competitors such as lower costs, faster production or intellectual property. Weaknesses are areas where your business might be outperformed by competitors. Opportunities are external, such as an underserved market, an increased demand for your products or favorable economic conditions. Threats are also external factors that might affect your ability to do well in the market such as new competitors, substitute products and new technologies.
  • Market research: The main purpose of market research is to determine whether it’s possible for your organization to enter the market or if there are barriers to entry or constraints that might affect your ability to compete. Consider variables such as pricing, your unique value proposition, customer demand, new technologies, market trends and any other factors that affect how your business will serve your customers. Use market research techniques to identify your target market, create buyer personas, assess the competitiveness of your niche and gauge customer demand, among other things.

7 Steps to Do a Feasibility Study

If you’re ready to do your own feasibility study, follow these 7 steps. You can use this free feasibility study template to help you get started.

1. Conduct a Preliminary Analysis

Begin by outlining your project 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, determine if the feasibility factors are too high to clear (i.e. too expensive, unable to effectively market, etc.).

2. Prepare a Projected Income Statement

This step requires working backward. Start with what you expect the income from the project to be and then what project funding is needed to achieve that goal. This is the foundation of an income statement. Factor in what services are required and how much they’ll cost and any adjustments to revenues, such as reimbursements, etc.

Related: Free Project Management Templates

3. Conduct a Market Survey or Perform Market Research

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

Market research will give you the clearest picture of the revenues and return on investment you can realistically expect from the project. Some things to consider are the geographic influence on the market, demographics, analyzing competitors, the value of the market and what your share will be and if the market is open to expansion (that is, in 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 project to meet its technical, operational, economic and legal feasibility factors. This isn’t a superficial, broad-stroke endeavor. It should be thorough and include start-up costs, fixed investments and operating 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 items, sources, costs and available financing. Liabilities to consider are such things as leasing or purchasing land, buildings and equipment, financing for assets and accounts receivables.

6. Review and Analyze All Data

All of these steps are important, but the review and analysis are especially important to ensure that everything is as it should be and that nothing requires changing or tweaking. Take a moment to look over your work one last time.

Reexamine your previous steps, such as the income statement, and compare them with your expenses and liabilities. Is it still realistic? This is also the time to think about risk 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 or not the project is feasible. That sounds simple, but all the previous steps lead to this decision-making moment. A couple of other things to consider before making that binary choice are whether the commitment is worth the time, effort and money and whether it aligns with the organization’s strategic goals and long-term aspirations.

Here are some simple feasibility study examples so you have a better idea of what a feasibility study is used for in different industries.

Construction Feasibility Study

For this construction feasibility study example, let’s imagine a large construction company that’s interested in starting a new project in the near future to generate profits.

  • Pre-Feasibility Study: The first step is to conduct a preliminary feasibility study. It can be as simple as a meeting where decision-makers will prioritize projects and discuss different project ideas to determine which poses a bigger financial benefit for the organization.
  • Technical Feasibility Study: Now it’s time to estimate what resources are needed to execute the construction project, such as raw materials, equipment and labor. If there’s work that can’t be executed by the company with its current resources, a subcontractor will be hired to fill the gap.
  • Economic Feasibility Study: Once the construction project management team has established what materials, equipment and labor are needed, they can estimate costs. Cost estimators use information from past projects, construction drawings and documents such as a bill of quantities to come up with an accurate cost estimate. Then, based on this estimate, a profit margin and financial forecasts will be analyzed to determine if there’s economic feasibility.
  • Legal Feasibility Study: Now the company needs to identify all potential regulations, building codes and laws that might affect the project. They’ll need to ask for approval from the local government so that they can begin the construction project .
  • Market Feasibility Study: Market feasibility will be determined depending on the nature of the project. For this feasibility example, let’s assume a residential construction project will be built. To gauge market potential, they’ll need to analyze variables such as the average income of the households in the city, crime rate, population density and any trends in state migration.

Manufacturing Feasibility Study

Another industry that uses feasibility studies is manufacturing. It’s a test run of the steps in the manufacturing production cycle to ensure the process is designed properly. Let’s take a look at what a manufacturing feasibility study example would look like.

  • Feasibility Study: The first step is to look at various ideas and decide which is the best one to pursue. You don’t want to get started and have to stop. That’s a waste of time, money and effort. Look at what you intend to manufacture, does it fill an unserved need, is the market able to support competition and can you manufacture a quality product on time and within your budget?
  • Financial Feasibility Study: Find out if your estimated income from the sale of this product is going to cover your costs, both direct and indirect costs. Work backward from the income you expect to make and the expenses you’ll spend for labor, materials and production to determine if the manufacturing of this product is financially feasible.
  • Market Feasibility Study: You’ve already determined that there’s a need that’s not being served, but now it’s time to dig deeper to get realistic projections of revenue. You’ll want to define your target demographic, analyze the competitive landscape, determine the total market volume and what your market share will be and estimate what market expansion opportunities there are.
  • Technical Feasibility Study: This is where you’ll explore the production , such as what resources you’ll need to produce your product. These findings will inform your financial feasibility study as well as labor, material, equipment, etc., costs have to be within your budget. You’ll also figure out the processes you’ll use to produce and deliver your product to the market, including warehousing and retail distribution.

There could be other feasibility studies you’ll have to make depending on the product and the market, but these are the essential ones that all manufacturers have to look at before they can make an educated decision as to whether to go forward or abandon the idea.

Best Practices for a Feasibility Study

  • Use project management software like ProjectManager to organize your data and work efficiently and effectively
  • Use templates 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

If your project is feasible, then the real work begins. ProjectManager helps you plan more efficiently. Our online Gantt chart organizes tasks, sets deadlines, adds priority and links dependent tasks to avoid delays. But unlike other Gantt software, we calculate the critical path for you and set a baseline to measure project variance once you move into the execution phase.

ProjectManager's Gantt chart is ideal for tracking feasibility studies

Watch a Video on Feasibility Studies

There are many steps and aspects to a project feasibility study. If you want yours to be accurate and forecast correctly whether your project is doable, then you need to have a clear understanding of all its moving parts.

Jennifer Bridges, PMP, is an expert on all aspects of project management and leads this free training video to help you get a firm handle on the subject.

Here’s a screenshot for your reference!

feasibility study definition and template

Pro tip: When completing a feasibility study, it’s always good to have a contingency plan that you test to make sure it’s a viable alternative.

ProjectManager Improves Your Feasibility Study

A feasibility study is a project, so get yourself a project management software that can help you execute it. ProjectManager 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.

ProjectManager's Gantt chart, ideal to track your feasibility study

If you decide to implement the project, you already have it started in our software, which can now help you monitor and report on its progress. Try it for yourself with this free 30-day trial.

Transcription

Today we’re talking about How to Conduct A Feasibility Study, but first of all, I want to start with clarifying what a feasibility study is.

Feasibility Analysis Definition

Basically, it’s an assessment of the practicality of a proposed plan or method. Basically, we’ll want to want to know, is this feasible. Some of the questions that may generate this or we can hear people asking are, “Do we have or can we create the technology to do this? Do we have the people resource who can produce this and will we get our ROI, our Return On Investment?”

When to Do a Feasibility Study

So when do we do the feasibility study? So it’s done during a project lifecycle and it’s done after the business case because the business case outlines what we’re proposing. Is it a product or service that we’re proposing?

So why do we do this? The reason we do this is that we need to determine the factors that will make the business opportunity a success.

How to Conduct a Feasibility Study

Well, let’s talk about a few steps that we do in order to conduct the feasibility study.

Well, first of all, we conduct a preliminary analysis of what all’s involved in the business case and what we’re analyzing and what we’re trying to determine is feasible.

Then we prepare a projected income statement. We need to know what are the income streams, how are we gonna make money on this. Where’s the revenue coming from? We also need to conduct a market survey.

We need to know, is this a demand? Is there a market for this? Are customers willing to use this product or use this service?

The fourth one is to plan the business organization and operations. What is the structure, what kind of resources do we need? What kind of staffing requirements do we have?

We also want to prepare an opening day balance sheet. What are the…how again, what are the expenses, what’s the revenue and to ensure that being able to determine if we’re gonna make our ROI.

So we want to review and analyze all of the data that we have and with that, we’re going to determine, we’re going to make a go, no-go decision. Meaning, are we going to do this project or this business opportunity or not.

Well, here are some of the best practices to use during your feasibility study.

One is to use templates, tools and surveys that exist today. The great news is, data is becoming more and more prevalent. There are all kinds of technologies. There are groups that they do nothing but research. Things that we can leverage today.

We want to involve the appropriate stakeholders to ensure that input is being considered from the different people involved.

We also want to use again the market research to ensure we’re bringing in good, reliable data.

Do your homework, meaning act like is if this is your project, if it’s your money. So do your homework and do it well and make sure you give credible data.

What Is a Feasibility Report?

So ultimately in the end what we’re doing is, we’re producing and we’re providing a feasibility report. So in that report, think of this is like a template.

So what you’re gonna do is give it an executive summary of the business opportunity that you’re evaluating and the description of the product or the service.

You want to look at different technology considerations. Is it technology that you’re going to use? Are you going to build the technology?

What kind of product and service marketplace and being able again, to identify the specific market you’re going to be targeting? Also, what is the marketing strategy you’re going to use to target the marketplace?

And also what’s the organizational structure? What are the staffing requirements? What people do you need to deliver the product or service and even support it?

So also we want to know the schedule to be able to have the milestones to ensure that as we’re building things, that as we’re spending money that we’re beginning to bring in income to pay and knowing when we’re going to start recuperating some of the funding. Again, which also ties into the financial projections.

Ultimately in this report, you’re going to provide the findings and the recommendations.

Again, we’ll probably talk about technology. Are you going to build it? Are you going to buy it? What are the marketing strategies for the specific marketplace organization? You may have some recommendations for whether you’re going to insource the staff, maybe you are going to outsource some staff and what that looks like and also financial recommendation.

If you’ve been looking for an all-in-one tool that can help with your feasibility study, consider ProjectManager. We offer five project views and countless features that make it seamless to plan projects, organize tasks and stay connected with your team. See what our software can do for you by taking this free 30-day trial.

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What Is a Feasibility Study and How to Conduct It? (+ Examples)

Appinio Research · 26.09.2023 · 27min read

What Is a Feasibility Study and How to Conduct It Examples

Are you ready to turn your project or business idea into a concrete reality but unsure about its feasibility? Whether you're a seasoned entrepreneur or a first-time project manager, understanding the intricate process of conducting a feasibility study is vital for making informed decisions and maximizing your chances of success.

This guide will equip you with the knowledge and tools to navigate the complexities of market, technical, financial, and operational feasibility studies. By the end, you'll have a clear roadmap to confidently assess, plan, and execute your project.

What is a Feasibility Study?

A feasibility study is a systematic and comprehensive analysis of a proposed project or business idea to assess its viability and potential for success. It involves evaluating various aspects such as market demand, technical feasibility, financial viability, and operational capabilities. The primary goal of a feasibility study is to provide you with valuable insights and data to make informed decisions about whether to proceed with the project.

Why is a Feasibility Study Important?

Conducting a feasibility study is a critical step in the planning process for any project or business. It helps you:

  • Minimize Risks: By identifying potential challenges and obstacles early on, you can develop strategies to mitigate risks.
  • Optimize Resource Allocation: A feasibility study helps you allocate your resources more efficiently, including time and money.
  • Enhance Decision-Making: Armed with data and insights, you can make well-informed decisions about pursuing the project or exploring alternative options.
  • Attract Stakeholders: Potential investors, lenders, and partners often require a feasibility study to assess the project's credibility and potential return on investment.

Now that you understand the importance of feasibility studies, let's explore the various types and dive deeper into each aspect.

Types of Feasibility Studies

Feasibility studies come in various forms, each designed to assess different aspects of a project's viability. Let's delve into the four primary types of feasibility studies in more detail:

1. Market Feasibility Study

Market feasibility studies are conducted to determine whether there is a demand for a product or service in a specific market or industry. This type of study focuses on understanding customer needs, market trends, and the competitive landscape. Here are the key elements of a market feasibility study:

  • Market Research and Analysis: Comprehensive research is conducted to gather market size, growth potential , and customer behavior data. This includes both primary research (surveys, interviews) and secondary research (existing reports, data).
  • Target Audience Identification: Identifying the ideal customer base by segmenting the market based on demographics, psychographics, and behavior. Understanding your target audience is crucial for tailoring your product or service.
  • Competitive Analysis : Assessing the competition within the market, including identifying direct and indirect competitors, their strengths, weaknesses, and market share.
  • Demand and Supply Assessment: Analyzing the balance between the demand for the product or service and its supply. This helps determine whether there is room for a new entrant in the market.

2. Technical Feasibility Study

Technical feasibility studies evaluate whether the project can be developed and implemented from a technical standpoint. This assessment focuses on the project's design, technical requirements, and resource availability. Here's what it entails:

  • Project Design and Technical Requirements: Defining the technical specifications of the project, including hardware, software, and any specialized equipment. This phase outlines the technical aspects required for project execution.
  • Technology Assessment: Evaluating the chosen technology's suitability for the project and assessing its scalability and compatibility with existing systems.
  • Resource Evaluation: Assessing the availability of essential resources such as personnel, materials, and suppliers to ensure the project's technical requirements can be met.
  • Risk Analysis: Identifying potential technical risks, challenges, and obstacles that may arise during project development. Developing risk mitigation strategies is a critical part of technical feasibility.

3. Financial Feasibility Study

Financial feasibility studies aim to determine whether the project is financially viable and sustainable in the long run. This type of study involves estimating costs, projecting revenue, and conducting financial analyses. Key components include:

  • Cost Estimation: Calculating both initial and ongoing costs associated with the project, including capital expenditures, operational expenses, and contingency funds.
  • Revenue Projections: Forecasting the income the project is expected to generate, considering sales, pricing strategies, market demand, and potential revenue streams.
  • Investment Analysis: Evaluating the return on investment (ROI), payback period, and potential risks associated with financing the project.
  • Financial Viability Assessment: Analyzing the project's profitability, cash flow, and financial stability to ensure it can meet its financial obligations and sustain operations.

4. Operational Feasibility Study

Operational feasibility studies assess whether the project can be effectively implemented within the organization's existing operational framework. This study considers processes, resource planning, scalability, and operational risks. Key elements include:

  • Process and Workflow Assessment: Analyzing how the project integrates with current processes and workflows, identifying potential bottlenecks, and optimizing operations.
  • Resource Planning: Determining the human, physical, and technological resources required for successful project execution and identifying resource gaps.
  • Scalability Evaluation: Assessing the project's ability to adapt and expand to meet changing demands and growth opportunities, including capacity planning and growth strategies.
  • Operational Risks Analysis: Identifying potential operational challenges and developing strategies to mitigate them, ensuring smooth project implementation.

Each type of feasibility study serves a specific purpose in evaluating different facets of your project, collectively providing a comprehensive assessment of its viability and potential for success.

How to Prepare for a Feasibility Study?

Before you dive into the nitty-gritty details of conducting a feasibility study, it's essential to prepare thoroughly. Proper preparation will set the stage for a successful and insightful study. In this section, we'll explore the main steps involved in preparing for a feasibility study.

1. Identify the Project or Idea

Identifying and defining your project or business idea is the foundational step in the feasibility study process. This initial phase is critical because it helps you clarify your objectives and set the direction for the study.

  • Problem Identification: Start by pinpointing the problem or need your project addresses. What pain point does it solve for your target audience?
  • Project Definition: Clearly define your project or business idea. What are its core components, features, or offerings?
  • Goals and Objectives: Establish specific goals and objectives for your project. What do you aim to achieve in the short and long term?
  • Alignment with Vision: Ensure your project aligns with your overall vision and mission. How does it fit into your larger strategic plan?

Remember, the more precisely you can articulate your project or idea at this stage, the easier it will be to conduct a focused and effective feasibility study.

2. Assemble a Feasibility Study Team

Once you've defined your project, the next step is to assemble a competent and diverse feasibility study team. Your team's expertise will play a crucial role in conducting a thorough assessment of your project's viability.

  • Identify Key Roles: Determine the essential roles required for your feasibility study. These typically include experts in areas such as market research, finance, technology, and operations.
  • Select Team Members: Choose team members with the relevant skills and experience to fulfill these roles effectively. Look for individuals who have successfully conducted feasibility studies in the past.
  • Collaboration and Communication: Foster a collaborative environment within your team. Effective communication is essential to ensure everyone is aligned on objectives and timelines.
  • Project Manager: Designate a project manager responsible for coordinating the study, tracking progress, and meeting deadlines.
  • External Consultants: In some cases, you may need to engage external consultants or specialists with niche expertise to provide valuable insights.

Having the right people on your team will help you collect accurate data, analyze findings comprehensively, and make well-informed decisions based on the study's outcomes.

3. Set Clear Objectives and Scope

Before you begin the feasibility study, it's crucial to establish clear and well-defined objectives. These objectives will guide your research and analysis efforts throughout the study.

Steps to Set Clear Objectives and Scope:

  • Objective Clarity: Define the specific goals you aim to achieve through the feasibility study. What questions do you want to answer, and what decisions will the study inform?
  • Scope Definition: Determine the boundaries of your study. What aspects of the project will be included, and what will be excluded? Clarify any limitations.
  • Resource Allocation: Assess the resources needed for the study, including time, budget, and personnel. Ensure that you allocate resources appropriately based on the scope and objectives.
  • Timeline: Establish a realistic timeline for the feasibility study. Identify key milestones and deadlines for completing different phases of the study.

Clear objectives and a well-defined scope will help you stay focused and avoid scope creep during the study. They also provide a basis for measuring the study's success against its intended outcomes.

4. Gather Initial Information

Before you delve into extensive research and data collection, start by gathering any existing information and documents related to your project or industry. This initial step will help you understand the current landscape and identify gaps in your knowledge.

  • Document Review: Review any existing project documentation, market research reports, business plans, or relevant industry studies.
  • Competitor Analysis: Gather information about your competitors, including their products, pricing, market share, and strategies.
  • Regulatory and Compliance Documents: If applicable, collect information on industry regulations, permits, licenses, and compliance requirements.
  • Market Trends: Stay informed about current market trends, consumer preferences, and emerging technologies that may impact your project.
  • Stakeholder Interviews: Consider conducting initial interviews with key stakeholders, including potential customers, suppliers, and industry experts, to gather insights and feedback.

By starting with a strong foundation of existing knowledge, you'll be better prepared to identify gaps that require further investigation during the feasibility study. This proactive approach ensures that your study is comprehensive and well-informed from the outset.

How to Conduct a Market Feasibility Study?

The market feasibility study is a crucial component of your overall feasibility analysis. It focuses on assessing the potential demand for your product or service, understanding your target audience, analyzing your competition, and evaluating supply and demand dynamics within your chosen market.

Market Research and Analysis

Market research is the foundation of your market feasibility study. It involves gathering and analyzing data to gain insights into market trends, customer preferences, and the overall business landscape.

  • Data Collection: Utilize various methods such as surveys, interviews, questionnaires, and secondary research to collect data about the market. This data may include market size, growth rates, and historical trends.
  • Market Segmentation: Divide the market into segments based on factors such as demographics, psychographics , geography, and behavior. This segmentation helps you identify specific target markets.
  • Customer Needs Analysis: Understand the needs, preferences, and pain points of potential customers . Determine how your product or service can address these needs effectively.
  • Market Trends: Stay updated on current market trends, emerging technologies, and industry innovations that could impact your project.
  • SWOT Analysis: Conduct a SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis to identify internal and external factors that may affect your market entry strategy.

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Target Audience Identification

Knowing your target audience is essential for tailoring your product or service to meet their specific needs and preferences.

  • Demographic Analysis: Define the age, gender, income level, education, and other demographic characteristics of your ideal customers.
  • Psychographic Profiling: Understand the psychographics of your target audience, including their lifestyle, values, interests, and buying behavior.
  • Market Segmentation: Refine your target audience by segmenting it further based on shared characteristics and behaviors.
  • Needs and Pain Points: Identify your target audience's unique needs, challenges, and pain points that your product or service can address.
  • Competitor's Customers: Analyze the customer base of your competitors to identify potential opportunities for capturing market share.

Competitive Analysis

Competitive analysis helps you understand the strengths and weaknesses of your competitors, positioning your project strategically within the market.

  • Competitor Identification: Identify direct and indirect competitors within your industry or market niche.
  • Competitive Advantage: Determine the unique selling points (USPs) that set your project apart from competitors. What value can you offer that others cannot?
  • SWOT Analysis for Competitors: Conduct a SWOT analysis for each competitor to assess their strengths, weaknesses, opportunities, and threats.
  • Market Share Assessment: Analyze each competitor's market share and market penetration strategies.
  • Pricing Strategies: Investigate the pricing strategies employed by competitors and consider how your pricing strategy will compare.

Leveraging the power of data collection and analysis is essential in gaining a competitive edge. With Appinio , you can efficiently gather critical insights about your competitors, their strengths, and weaknesses. Seamlessly integrate these findings into your market feasibility study, empowering your project with a strategic advantage.

Demand and Supply Assessment

Understanding supply and demand dynamics is crucial for gauging market sustainability and potential challenges.

  • Market Demand Analysis: Estimate the current and future demand for your product or service. Consider factors like seasonality and trends.
  • Supply Evaluation: Assess the availability of resources, suppliers, and distribution channels required to meet the expected demand.
  • Market Saturation: Determine whether the market is saturated with similar offerings and how this might affect your project.
  • Demand Forecasting: Use historical data and market trends to make informed projections about future demand.
  • Scalability: Consider the scalability of your project to meet increased demand or potential fluctuations.

A comprehensive market feasibility study will give you valuable insights into your potential customer base, market dynamics, and competitive landscape. This information will be pivotal in shaping your project's direction and strategy.

How to Conduct a Technical Feasibility Study?

The technical feasibility study assesses the practicality of implementing your project from a technical standpoint. It involves evaluating the project's design, technical requirements, technological feasibility, resource availability, and risk analysis. Let's delve into each aspect in more detail.

1. Project Design and Technical Requirements

The project design and technical requirements are the foundation of your technical feasibility study. This phase involves defining the technical specifications and infrastructure needed to execute your project successfully.

  • Technical Specifications: Clearly define the technical specifications of your project, including hardware, software, and any specialized equipment.
  • Infrastructure Planning: Determine the physical infrastructure requirements, such as facilities, utilities, and transportation logistics.
  • Development Workflow: Outline the workflow and processes required to design, develop, and implement the project.
  • Prototyping: Consider creating prototypes or proof-of-concept models to test and validate the technical aspects of your project.

2. Technology Assessment

A critical aspect of the technical feasibility study is assessing the technology required for your project and ensuring it aligns with your goals.

  • Technology Suitability: Evaluate the suitability of the chosen technology for your project. Is it the right fit, or are there better alternatives?
  • Scalability and Compatibility: Assess whether the chosen technology can scale as your project grows and whether it is compatible with existing systems or software.
  • Security Measures: Consider cybersecurity and data protection measures to safeguard sensitive information.
  • Technical Expertise: Ensure your team or external partners possess the technical expertise to implement and maintain the technology.

3. Resource Evaluation

Resource evaluation involves assessing the availability of the essential resources required to execute your project successfully. These resources include personnel, materials, and suppliers.

  • Human Resources: Evaluate whether you have access to skilled personnel or if additional hiring or training is necessary.
  • Material Resources: Identify the materials and supplies needed for your project and assess their availability and costs.
  • Supplier Relationships: Establish relationships with reliable suppliers and consistently assess their ability to meet your resource requirements.

4. Risk Analysis

Risk analysis is a critical component of the technical feasibility study, as it helps you anticipate and mitigate potential technical challenges and setbacks.

  • Identify Risks: Identify potential technical risks, such as hardware or software failures, technical skill gaps, or unforeseen technical obstacles.
  • Risk Mitigation Strategies: Develop strategies to mitigate identified risks, including contingency plans and resource allocation for risk management.
  • Cost Estimation for Risk Mitigation: Assess the potential costs associated with managing technical risks and incorporate them into your project budget.

By conducting a thorough technical feasibility study, you can ensure that your project is technically viable and well-prepared to overcome technical challenges. This assessment will also guide decision-making regarding technology choices, resource allocation, and risk management strategies.

How to Conduct a Financial Feasibility Study?

The financial feasibility study is a critical aspect of your overall feasibility analysis. It focuses on assessing the financial viability of your project by estimating costs, projecting revenue, conducting investment analysis, and evaluating the overall financial health of your project. Let's delve into each aspect in more detail.

1. Cost Estimation

Cost estimation is the process of calculating the expenses associated with planning, developing, and implementing your project. This involves identifying both initial and ongoing costs.

  • Initial Costs: Calculate the upfront expenses required to initiate the project, including capital expenditures, equipment purchases, and any development costs.
  • Operational Costs: Estimate the ongoing operating expenses, such as salaries, utilities, rent, marketing, and maintenance.
  • Contingency Funds: Allocate funds for unexpected expenses or contingencies to account for unforeseen challenges.
  • Depreciation: Consider the depreciation of assets over time, as it impacts your financial statements.

2. Revenue Projections

Revenue projections involve forecasting the income your project is expected to generate over a specific period. Accurate revenue projections are crucial for assessing the project's financial viability.

  • Sales Forecasts: Estimate your product or service sales based on market demand, pricing strategies, and potential growth.
  • Pricing Strategy: Determine your pricing strategy, considering factors like competition, market conditions, and customer willingness to pay.
  • Market Penetration: Analyze how quickly you can capture market share and increase sales over time.
  • Seasonal Variations: Account for any seasonal fluctuations in revenue that may impact your cash flow.

3. Investment Analysis

Investment analysis involves evaluating the potential return on investment (ROI) and assessing the attractiveness of your project to potential investors or stakeholders.

  • Return on Investment (ROI): Calculate the expected ROI by comparing the project's net gains against the initial investment.
  • Payback Period: Determine how long it will take for the project to generate sufficient revenue to cover its initial costs.
  • Risk Assessment: Consider the level of risk associated with the project and whether it aligns with investors' risk tolerance.
  • Sensitivity Analysis: Perform sensitivity analysis to understand how changes in key variables, such as sales or costs, affect the investment's profitability.

4. Financial Viability Assessment

A financial viability assessment evaluates the project's ability to sustain itself financially in the long term. It considers factors such as profitability, cash flow, and financial stability.

  • Profitability Analysis: Assess whether the project is expected to generate profits over its lifespan.
  • Cash Flow Management: Analyze the project's cash flow to ensure it can cover operating expenses, debt payments, and other financial obligations.
  • Break-Even Analysis: Determine the point at which the project's revenue covers all costs, resulting in neither profit nor loss.
  • Financial Ratios: Calculate key financial ratios, such as debt-to-equity ratio and return on equity, to evaluate the project's financial health.

By conducting a comprehensive financial feasibility study, you can gain a clear understanding of the project's financial prospects and make informed decisions regarding its viability and potential for success.

How to Conduct an Operational Feasibility Study?

The operational feasibility study assesses whether your project can be implemented effectively within your organization's operational framework. It involves evaluating processes, resource planning, scalability, and analyzing potential operational risks.

1. Process and Workflow Assessment

The process and workflow assessment examines how the project integrates with existing processes and workflows within your organization.

  • Process Mapping: Map out current processes and workflows to identify areas of integration and potential bottlenecks.
  • Workflow Efficiency: Assess the efficiency and effectiveness of existing workflows and identify opportunities for improvement.
  • Change Management: Consider the project's impact on employees and plan for change management strategies to ensure a smooth transition.

2. Resource Planning

Resource planning involves determining the human, physical, and technological resources needed to execute the project successfully.

  • Human Resources: Assess the availability of skilled personnel and consider whether additional hiring or training is necessary.
  • Physical Resources: Identify the physical infrastructure, equipment, and materials required for the project.
  • Technology and Tools: Ensure that the necessary technology and tools are available and up to date to support project implementation.

3. Scalability Evaluation

Scalability evaluation assesses whether the project can adapt and expand to meet changing demands and growth opportunities.

  • Scalability Factors: Identify factors impacting scalability, such as market growth, customer demand, and technological advancements.
  • Capacity Planning: Plan for the scalability of resources, including personnel, infrastructure, and technology.
  • Growth Strategies: Develop strategies for scaling the project, such as geographic expansion, product diversification, or increasing production capacity.

4. Operational Risk Analysis

Operational risk analysis involves identifying potential operational challenges and developing mitigation strategies.

  • Risk Identification: Identify operational risks that could disrupt project implementation or ongoing operations.
  • Risk Mitigation: Develop risk mitigation plans and contingency strategies to address potential challenges.
  • Testing and Simulation: Consider conducting simulations or testing to evaluate how the project performs under various operational scenarios.
  • Monitoring and Adaptation: Implement monitoring and feedback mechanisms to detect and address operational issues as they arise.

Conducting a thorough operational feasibility study ensures that your project aligns with your organization's capabilities, processes, and resources. This assessment will help you plan for a successful implementation and minimize operational disruptions.

How to Write a Feasibility Study?

The feasibility study report is the culmination of your feasibility analysis. It provides a structured and comprehensive document outlining your study's findings, conclusions, and recommendations. Let's explore the key components of the feasibility study report.

1. Structure and Components

The structure of your feasibility study report should be well-organized and easy to navigate. It typically includes the following components:

  • Executive Summary: A concise summary of the study's key findings, conclusions, and recommendations.
  • Introduction: An overview of the project, the objectives of the study, and a brief outline of what the report covers.
  • Methodology: A description of the research methods , data sources, and analytical techniques used in the study.
  • Market Feasibility Study: Detailed information on market research, target audience, competitive analysis, and demand-supply assessment.
  • Technical Feasibility Study: Insights into project design, technical requirements, technology assessment, resource evaluation, and risk analysis.
  • Financial Feasibility Study: Comprehensive information on cost estimation, revenue projections, investment analysis, and financial viability assessment.
  • Operational Feasibility Study: Details on process and workflow assessment, resource planning, scalability evaluation, and operational risks analysis.
  • Conclusion: A summary of key findings and conclusions drawn from the study.

Recommendations: Clear and actionable recommendations based on the study's findings.

2. Write the Feasibility Study Report

When writing the feasibility study report, it's essential to maintain clarity, conciseness, and objectivity. Use clear language and provide sufficient detail to support your conclusions and recommendations.

  • Be Objective: Present findings and conclusions impartially, based on data and analysis.
  • Use Visuals: Incorporate charts, graphs, and tables to illustrate key points and make the report more accessible.
  • Cite Sources: Properly cite all data sources and references used in the study.
  • Include Appendices: Attach any supplementary information, data, or documents in appendices for reference.

3. Present Findings and Recommendations

When presenting your findings and recommendations, consider your target audience. Tailor your presentation to the needs and interests of stakeholders, whether they are investors, executives, or decision-makers.

  • Highlight Key Takeaways: Summarize the most critical findings and recommendations upfront.
  • Use Visual Aids: Create a visually engaging presentation with slides, charts, and infographics.
  • Address Questions: Be prepared to answer questions and provide additional context during the presentation.
  • Provide Supporting Data: Back up your findings and recommendations with data from the feasibility study.

4. Review and Validation

Before finalizing the feasibility study report, conducting a thorough review and validation process is crucial. This ensures the accuracy and credibility of the report.

  • Peer Review: Have colleagues or subject matter experts review the report for accuracy and completeness.
  • Data Validation: Double-check data sources and calculations to ensure they are accurate.
  • Cross-Functional Review: Involve team members from different disciplines to provide diverse perspectives.
  • Stakeholder Input: Seek input from key stakeholders to validate findings and recommendations.

By following a structured approach to creating your feasibility study report, you can effectively communicate the results of your analysis, support informed decision-making, and increase the likelihood of project success.

Feasibility Study Examples

Let's dive into some real-world examples to truly grasp the concept and application of feasibility studies. These examples will illustrate how various types of projects and businesses undergo the feasibility assessment process to ensure their viability and success.

Example 1: Local Restaurant

Imagine you're passionate about opening a new restaurant in a bustling urban area. Before investing significant capital, you'd want to conduct a thorough feasibility study. Here's how it might unfold:

  • Market Feasibility: You research the local dining scene, identify target demographics, and assess the demand for your cuisine. Market surveys reveal potential competitors, dining preferences, and pricing expectations.
  • Technical Feasibility: You design the restaurant layout, plan the kitchen setup, and assess the technical requirements for equipment and facilities. You consider factors like kitchen efficiency, safety regulations, and adherence to health codes.
  • Financial Feasibility: You estimate the initial costs for leasing or purchasing a space, kitchen equipment, staff hiring, and marketing. Revenue projections are based on expected foot traffic, menu pricing, and seasonal variations.
  • Operational Feasibility: You create kitchen and service operations workflow diagrams, considering staff roles and responsibilities. Resource planning includes hiring chefs, waitstaff, and kitchen personnel. Scalability is evaluated for potential expansion or franchising.
  • Risk Analysis: Potential operational risks are identified, such as food safety concerns, labor shortages, or location-specific challenges. Risk mitigation strategies involve staff training, quality control measures, and contingency plans for unexpected events.

Example 2: Software Development Project

Now, let's explore the feasibility study process for a software development project, such as building a mobile app:

  • Market Feasibility: You analyze the mobile app market, identify your target audience, and assess the demand for a solution in a specific niche. You gather user feedback and conduct competitor analysis to understand the competitive landscape.
  • Technical Feasibility: You define the technical requirements for the app, considering platforms (iOS, Android), development tools, and potential integrations with third-party services. You evaluate the feasibility of implementing specific features.
  • Financial Feasibility: You estimate the development costs, including hiring developers, designers, and ongoing maintenance expenses. Revenue projections are based on app pricing, potential in-app purchases, and advertising revenue.
  • Operational Feasibility: You map out the development workflow, detailing the phases from concept to deployment. Resource planning includes hiring developers with the necessary skills, setting up development environments, and establishing a testing framework.
  • Risk Analysis: Potential risks like scope creep, technical challenges, or market saturation are assessed. Mitigation strategies involve setting clear project milestones, conducting thorough testing, and having contingency plans for technical glitches.

These examples demonstrate the versatility of feasibility studies across diverse projects. Whatever type of venture or endeavor you want to embark on, a well-structured feasibility study guides you toward informed decisions and increased project success.

In conclusion, conducting a feasibility study is a crucial step in your project's journey. It helps you assess the viability and potential risks, providing a solid foundation for informed decision-making. Remember, a well-executed feasibility study not only enables you to identify challenges but also uncovers opportunities that can lead to your project's success.

By thoroughly examining market trends, technical requirements, financial aspects, and operational considerations, you are better prepared to embark on your project confidently. With this guide, you've gained the knowledge and tools needed to navigate the intricate terrain of feasibility studies.

How to Conduct a Feasibility Study in Minutes?

Speed and precision are paramount for feasibility studies, and Appinio delivers just that. As a real-time market research platform, Appinio empowers you to seamlessly conduct your market research in a matter of minutes, putting actionable insights at your fingertips.

Here's why Appinio stands out as the go-to tool for feasibility studies:

  • Rapid Insights: Appinio's intuitive platform ensures that anyone, regardless of their research background, can effortlessly navigate and conduct research, saving valuable time and resources.
  • Lightning-Fast Responses: With an average field time of under 23 minutes for 1,000 respondents, Appinio ensures that you get the answers you need when you need them, making it ideal for time-sensitive feasibility studies.
  • Global Reach: Appinio's extensive reach spans over 90 countries, allowing you to define the perfect target group from a pool of 1,200+ characteristics and gather insights from diverse markets.

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Project Management Docs

Free Project Management Templates

Feasibility Study Template

A good Feasibility Study helps to objectively decide whether to proceed with a proposed project. A Feasibility Study should have broad considerations when considering whether to undertake a new project. It should consider things such as technological limitations, the marketplace, your marketing strategy, staffing requirements, schedule and financial projections. Our free Feasibility Study template helps you to get started quickly with your own feasibility study.

Download Template

1. executive summary.

The executive summary provides an overview of the content contained in the feasibility study document. Many people write this section after the rest of the document is completed. This section is important in that it provides a higher level summary of the detail contained within the rest of the document. Remember to remove the green instructional portion of the Feasibility Study Template before making your document final.

Alan’s Best Chocolates (ABC) is a leader in the sales of chocolates and confections throughout the United States. ABC’s products are sold from 50 stores throughout the country and maintain a reputation for superior taste and quality. While ABC’s sales have grown over the past 10 years, the rate of growth has slowed significantly. One key factor for this slowing growth rate is the shift in the marketplace to purchasing chocolates and confections online. While ABC maintains a web site, it is not capable of hosting an e-commerce platform for online sales. ABC’s sales occur only in its brick and mortar facilities and the company is losing potential customers to competitors who provide online sales. The chocolate and confections marketplace is healthy and shows a continued growth trajectory over the next five to ten years. ABC is in a position to capitalize on this online marketplace by leveraging existing technologies, industry best practices, and an aggressive marketing and sales campaign to ramp up the company’s growth projections for the foreseeable future.

2. Description of Products and Services

This section of the feasibility study provides a high level description of the products and/or services which are being considered as past of the feasibility study. The purpose of this section is to provide detailed descriptions of exactly what the organization is considering so this information can be applied to the following sections of the document. It is important that this description captures the most important aspects of the products and/or services that the organization is considering as well as how it may benefit customers and the organization.

ABC is considering a move to create and provide an online platform from which to sell its existing product line. Until now ABC has only sold its products from its chain of brick and mortar facilities and has been limited to sales within the geographical regions where its stores reside. By doing so, ABC has not been able to capitalize on the growing trend of online sales within the chocolate and confections marketplace. By offering its products through an online platform, ABC can market its products to an entirely new market, increase revenue and growth projections, and allow customers to purchase our products from the convenience of their own homes.

There are no proposed changes to ABC’s current product offerings as a result of this study. Online sales will include only current products and any changes to this product line must be considered outside of the purpose of this document.

3. Technology Considerations

This section of the feasibility study should explain any considerations the organization must make with regards to technology. Many new initiatives rely on technology to manage or monitor various business functions. New technology may be developed internally or contracted through a service provider and always result in costs which must be weighed in determining the path forward.

Upgraded technological capability will be required for ABC to move toward offering an online marketplace from which customers may purchase our products. Customers demand a simple and easy way by which to conduct online transactions and it is imperative that all transactions are conducted in a secure manner. While ABC maintains a web site with product lists and descriptions, it does not currently allow for purchasing to be done online. This functionality must be integrated with our current web site to allow for secure purchases to be made. Additionally, new online marketing functionality must be considered in order to target existing and potential customers through methods such as e-mailing lists, promotional advertisements, and loyalty discounts.

While ABC maintains a small information technology (IT) group, the expertise does not currently exist internally to design, build, and implement the sort of extensive online platform required for this effort. Therefore, the recommendation is to contract this work out to an internet marketplace provider who can work with ABC to meet its needs within the determined timeframe and budget. It should be noted that while ABC does not have this expertise internally, the technology exists and is in use throughout the marketplace which lowers the risk of this concept considerably.

ABC currently maintains a high speed internet connection, web server, and the latest software. With the addition of an e-commerce portal it is expected that there will be an overall cost increase of 5-10% for web server operations and maintenance costs.

4. Product/Service Marketplace

This part of the feasibility study describes the existing marketplace for the products and/or services the organization is considering. It may describe who the target market consists of for these products or services, who the competitors are, how products will be distributed, and why customers might choose to buy our products/services. Most marketplaces are dynamic environments in which things change constantly. To enter a new marketplace blindly will usually result in an organization not fully understanding its role and not maximizing its resulting benefits.

The online marketplace for chocolates and confections has been thriving for many years. In FY20xx online chocolate sales accounted for approximately $20 million or 20% of total chocolate sales worldwide. While chocolates and confections are available in almost every store, our primary marketplace consists of specialty chocolates and confections. All of ABC’s current major competitors already have an established online presence of at least 3-5 years. The top 3 competitors are currently: Smith’s Chocolates, Worldwide Candy, and Chocolate International. A large majority of ABC’s customer base are returning customers and referrals from existing customers. By providing a more convenient means of purchasing our products online it is expected that we will retain these customers while conducting an online marketing campaign for new customers as well.

ABC will distribute online purchases via direct shipping from the nearest store location. This will allow ABC to provide timely shipping and eliminate the need for a central warehouse or facility from which to store and ship its products. Such a facility would require a significant capital investment as well as increased operation and maintenance costs. However, based on anticipated growth projections, ABC must ensure that all store locations maintain adequate inventories on hand to satisfy customer demand.

5. Marketing Strategy

Here the feasibility study provides a high level description of how the organization will market its product or service. Some topics which should be included are: how does an organization differentiate itself from its competitors; types of marketing the organization will utilize; and who the organization will target. Marketing efforts must be focused on the right target groups in order to yield the greatest return on investment.

In order to be successful, ABC must differentiate itself from competitors in order to appeal to customers in the online marketplace. To do this, ABC will utilize its practice of personalizing its product packaging which it currently offers in-store customers. Current competitors do not currently provide any personalization of packaging. Customers will have the ability to personalize messages on or inside of product packaging, request specific color-based themes, or tailor packaging for special occasions or events.

ABC will implement a customer e mailing list in order to send product promotions, sales advertisements, and other special offerings to customers who register. Additionally, ABC will offer referral incentives to customers who refer our products to friends and family in order to provide additional incentives. ABC will also maintain a customer database in order to determine its target customer groups and geographical regions. ABC will research marketing intelligence providers to determine the benefits and costs of purchasing customer information for bulk email campaigns as well. Another important consideration of ABC’s online marketing strategy is cost. Electronic marketing communication costs are very small in comparison to direct mail marketing which ABC currently utilizes. However, we expect the additional revenue from online sales to greatly outweigh these additional electronic marketing costs.

It is important to note that ABC’s current marketing and sales staff will require training in online marketing and sales practices. This training will need to be contracted to a training provider as part of our startup costs and schedule.

6. Organization and Staffing

With many new products or services there may be a need for additional staffing or for an organization to restructure in order to accommodate the change. These are important considerations as they may result in increased costs or require an organization to change its practices and processes.

The ABC online sales campaign is not anticipated to significantly affect the organizational structure of the company. There are, however, several staffing additions required to successfully implement the online sales campaign. All of these positions will work within existing departments and report to department managers.

Staffing Position #1: Online Sales Manager – this full time position will lead sales staff in identifying sales opportunities and converting these opportunities to actual sales. This person will report to ABC’s Director of Sales and will work in ABC headquarters.

Staffing Position #2: Online Marketing Manager – this full time position will lead marketing staff in identifying target customer groups/markets and conducting online advertising/marketing efforts to maximize traffic to ABCs online marketplace. This person will report to ABC’s Director of Marketing and will work in ABC headquarters.

7. Schedule

This section of the feasibility study is intended to provide a high level framework for implementation of the product or service being considered. This section is not intended to include a detailed schedule as this would be developed during project planning should this initiative be approved. This section may include some targeted milestones and timeframes for completion as a guideline only.

The ABC online sales campaign is expected to take six months from project approval to launch of the e-commerce platform. Many of the foundations for this platform, such as high-speed internet and web server capability, are already available. The following is a high level schedule of some significant milestones for this initiative:

Jan 1, 20xx: Initiate Project February 1, 20xx: Project kickoff meeting March 1, 20xx: Complete online sales site design April 1, 20xx: Complete testing of online sales site June 1, 20xx: Complete beta testing trials of online sales site July 2, 20xx: Go live with site launch

Upon approval of this project a detailed schedule will be created by the assigned project team to include all tasks and deliverables.

8. Financial Projections

The financial projections for the feasibility study provides a description of the financial projections the new initiative is expected to yield versus additional costs. Financial projections are one key aspect of new project selection criteria. There are many ways to present these projections. Net present value (NPV), cost-benefit calculations, and balance sheets are just some examples of how financial projections may be illustrated. This section should also provide the assumptions on which the illustrated financial projections are based.

The financial projections for the addition of an online sales platform for ABC are highlighted in the table below. These figures account for projected online sales, additional staffing requirements, shipping, material, and insurance costs, contract support for IT and training needs, and web server and hosting costs.

The assumptions for these projections are as follows:

  • In store sales projections remain unchanged
  • All milestones are performed in accordance with the schedule
  • All transactions are closed yearly with no carry-over to subsequent years

9. Findings and Recommendations

This section of the feasibility study template provides an area where to summarize the findings of the feasibility study and explain why this course of action is or is not recommended. This section may include a description of pros and cons for the initiative being considered. This section should be brief since most of the detail is included elsewhere in the document. Additionally, it should capture the likelihood of success for the business idea being studied.

Based on the information presented in this feasibility study, it is recommended that ABC approves the online sales initiative and begins project initiation. The findings of this feasibility study show that this initiative will be highly beneficial to the organization and has a high probability of success. Key findings are as follows:

Technology:

  • Will utilize existing technology which lowers project risk
  • E commerce infrastructure will be contracted out to vendor which allows ABC to share risk
  • Once in place this technology is simple to operate and maintain for a relatively low cost
  • This initiative will allow ABC to reach large number of target groups electronically at a low cost
  • ABC can expand customer base beyond geographic areas where stores are currently located
  • The marketplace for online chocolate and confection sales is in a steady state of growth
  • ABC is able to differentiate itself from its competitors and will utilize incentive programs to target new consumers

Organizational:

  • Minimal increases to staffing are required with no changes to organizational structure
  • No new facilities or capital investments are required
  • Break even point occurs early in the second year of operation
  • Five year projections show online sales accounting for 25% of total sales
  • ABC will be in position to capture greater market share by maintaining both an in-store and online presence

Be sure to download our free project plan template . All successful projects start with a well prepared project plan.

Starting a Business | What is

What Is a Feasibility Study for Small Business?

Published July 17, 2020

Published Jul 17, 2020

Blake Stockton

WRITTEN BY: Blake Stockton

This article is part of a larger series on Starting a Business .

A feasibility study for small business is an in-depth research and financial analysis that recommends if one should pursue a business idea or product. The study contains estimates of items such as income, costs, obstacles, and technical challenges. Typically, a feasibility study for a small business costs a minimum of $5,000. However, they can cost up to $100,000 for businesses that have a multimillion dollar startup budget.

Throughout this article, we discuss what a feasibility study is and how it differs from a business plan, so that you can decide whether or not you really need one for your business.

How the Feasibility Study Works

Usually, businesses conduct feasibility studies to determine if their idea or product is worth pursuing. It’s one of the more complicated and costly ways to test a business idea.

Depending on the idea’s complexity and scope, a study can take weeks or months to prepare. With the help of templates or programs, business owners can conduct feasibility studies on their own. However, because of the in-depth research and complicated financial projections, they often hire an expert to create the study.

Feasibility studies do not determine the final decision but present all the evidence and make a strong recommendation on whether or not it’s best to move forward. The entrepreneur, stakeholders, and/or other authorities decide whether to go ahead with the business idea or product, using the study as a guide.

Who Should Get a Feasibility Study?

Small business entrepreneurs use a feasibility study to prevent the costly mistake of launching an unsuccessful business, product, or project. You can use a study to help make strategic decisions, such as determining whether you should:

  • Start a new business
  • Open a new store or factory
  • Change product lineup or approach
  • Expand to a new area or market
  • Acquire another company
  • Make a significant investment in new technology
  • Enter an already crowded or competitive market segment
  • Invest personal capital into a project

Feasibility Study vs Business Plan

A feasibility study often comes before the business plan, because the information and data uncovered in the study are included in the business plan. Plus, if the feasibility gives a recommendation not to move forward, you may want to rethink your business idea or product altogether before creating a plan.

What Should Be in a Feasibility Study?

Depending on the project or business, you will use each of the aspects below to a certain degree. The feasibility study’s organization may vary depending on its focus—you may have a section for each of these topics:

  • Executive Summary: This summarizes the project and business. The ultimate conclusions are outlined here. It should be about a page long.
  • Demand: A marketing analysis determines the need for your product or business in the industry you want to sell. Even if you have a brick-and-mortar business, you should consider online aspects as well.
  • Technical issues: What tool, hardware, or software do you need to create your business or product? Will you create the tech, buy it, or rent it? This section also includes the facilities, including layout, shelving, offices, and manufacturing space.
  • Logistics issues: This piece outlines vendors, pricing schedules, exclusive agreements, and franchised product contracts. It may include getting supplies and delivering finished products or working online elements like an ecommerce site. Location issues can be placed here.
  • Legal concerns: Do you need permits? Are there regulations or prohibitions to consider? What about environmental, historical, or legacy issues to negotiate?
  • Marketing strategy: This section will define the target market as specific as possible: How you will meet their needs, and how you will target them?
  • Required staffing: How many employees will you need? What are their qualifications? What is the typical salary in your area? You can include a sample organizational chart along with a corresponding discussion of who among your current employees may change jobs to fill new positions.
  • Scheduling: This section includes milestones for financials as well as physical projects and a timeline for completion.
  • Financials: In addition to anticipated expenses and potential profits, this section will include an opening day balance sheet that lists total assets and liabilities on your business’s first day. This financial data gives you an indication of your return on investment (ROI).
  • ROI: If you don’t see a return on investment, it makes no sense to start or expand your business. A feasibility study estimates when you’ll earn profits and what or how much they may be.
  • Analysis: You will see discussions answering questions like: Does it seem realistic? Are the sources strong? Are there outlying data points to consider? Also, analyze potential risks: What are the worst-case scenarios, and how likely are they?
  • Recommendations: This gives a go or no-go recommendation and breaks down specific suggestions based on the main elements. If the project is not feasible, it may offer alternatives.

Cost of a Feasibility Study

A feasibility study for small business takes an average of 60 to 90 days to complete and may cost anywhere from $5,000 to $10,000. As a general rule of thumb, a feasibility study will cost 1% of the business’s total cost to open or a product’s cost to build. So if you’re requesting a feasibility study for a complicated business with millions in startup costs, be prepared to spend more than $10,000.

The cost is also determined by the study’s depth, the tools needed to conduct it—survey software, focus groups, and lawyers—and the scope of the project. For example, a study to determine if a business should bring manufacturing back to the US from overseas will cost more than a study on whether to open a restaurant.

Here are costs for various feasibility study projects:

Who Provides Feasibility Studies?

You may find it challenging to find a firm that only produces feasibility studies. Often, a market research firm will provide feasibility studies in addition to other services. For example, Drive Research in Syracuse, New York, offers a host of market research services, including feasibility studies .

There are also business plan writing companies that specialize in feasibility studies. Wise Business Plans provides a study with in-depth market research and industry analysis.

If you’d like to connect one-on-one and choose your own independent market researcher for a feasibility study, you could look to the freelancer platform Upwork . You can find several market research experts and analysts that may be interested in tackling your specific project. Upwork is an excellent platform to find market researchers, because you can review a freelancer’s past work to see if they’d be a good fit.

Tips and Best Practices to Follow When Purchasing a Feasibility Study

  • Conduct a preliminary analysis first: Before paying thousands of dollars for a feasibility study, do a minor check to ensure there are no insurmountable technical, legal, or financial obstacles to the business idea or product.
  • Involve stakeholders: Before, during, and after the study, keep people relevant to the business in the loop. Get their input, suggestions, and feedback.
  • Review research: Review the feasibility study data and see if you come to a similar conclusion as the research analyst. You may also want to pay for a second expert’s opinion on the final determination.
  • Assess your current company or situation: Before making any decision on a business idea or product, consider your own strengths, weaknesses, and financial situation in the final decision to move forward or not.

Frequently Asked Questions (FAQs) for a Feasibility Study

Is it better to hire out for a feasibility study.

Most likely, yes. Feasibility studies typically contain in-depth expert data analysis and financial projections. Hiring out the work will ensure you get an objective evaluation of the project and its potential downfalls and successes. It’s human nature to bias our own ideas, and a third party can avoid.

How much should I invest in a feasibility study?

For a simpler study on a business idea or product, expect to pay anywhere from $5,000 to $10,000. The general rule of thumb is that a feasibility study will cost 1% of the expected project budget or business’s cost to build.

Should feasibility studies include solutions as well as pointing out obstacles?

Yes, the more information the study provides, the better it will aid in the decision-making process. Feasibility studies should provide an objective determination because of the time and expense involved.

Can my feasibility study become my business plan?

Many times, yes. With some changes in focus and scope, a feasibility study can be re-imagined into a business plan. However, be sure it meets the purpose, which outlines the strategic and tactical steps needed to make the business work.

Bottom Line

Feasibility studies can cost thousands of dollars, but they can save you millions you may lose from making a poor business decision. They examine a new business or product idea by researching the endeavor’s technological, financial, and operational aspects. The study analyzes the data and offers a recommendation on if you should move ahead with your project or idea and how to maximize its success.

About the Author

Blake Stockton

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Blake Stockton

Blake Stockton is a staff writer at Fit Small Business focusing on how to start brick-and-mortar and online businesses. He is a frequent guest lecturer at several undergraduate business and MBA classes at University of North Florida . Prior to joining Fit Small Business, Blake consulted with over 700 small biz owners and assisted with starting and growing their businesses.

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ENTR 2P91: Entrepreneurship

Sample feasibility reports.

  • Idea Generation
  • Product / Service Analysis
  • NAICS Code Help
  • Organizational Feasibility
  • Financial Feasibility
  • Find Academic Research

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Sample academic feasibility reports can be found by searching Google Scholar using the keywords business feasibility report  or business feasibility study. For example:

  • The UBC public bicycle system feasibility study (Adam Cooper, UBC School of Community and Regional Planning)
  • Feasibility study for renovating an old barn into a tasting room for K-Dot winery (Kendall Ott, California Polytechnic State University)
  • Feasibility study for a brewpub (John Gallante and Daniel Price, California Polytechnic State University)
  • A Feasibility study for establishing a sustainability consulting firm (Susan F. Mathieu, Simon Fraser University)

The following resources provide additional guidance on conducting your feasibility analysis and writing it up:

  • Feasibility Study Outline (Iowa State University Extension & Outreach) An example outline of a feasibility report including detailed information about what should be included in each section of the report.
  • Feasibility Analysis for the New Venture Nonprofit Enterprise (journal article) This article in the New England Journal of Entrepreneurship explores the value of feasibility analysis for the pre-launch nonprofit enterprise. Note: Access restricted to authorized Brock University users.
  • Full Feasibility Analysis (Pearson Education) (PDF) Tools and templates for conducting a full feasibility analysis including: product/service, industry/market, organizational, financial and an overallassessment. Originally published as Appendix 3.1 of the textbook "Entrepreneurship: successfully launching new ventures" by Bruce Barringer and Duane Ireland.
  • Evaluating the feasibility of business opportunities (OMAFRA Factsheet) A "How to" Factsheet Prepared by the Ontario Ministry of Agriculture, Food and Rural Affairs (2017)

Business Plans - Samples

The following sources contain sample business plans for different types of small businesses:

  • Business Plans Handbook Series (Gale Ebooks Database) This source is a compilation of actual business plans developed by small businesses throughout North America. The Library has online access to the most recent volumes (v.50, 2021 - v.11, 2006) via the Gale eBooks database. The most recent volume has a cumulative index of all plans by plan type. You may also search within the full text of all online business plans in this series.
  • Bplans.com - sample plans Contains over 300 different sample plans, organized by category (restaturant, cafe & bakery; retail & online stores; service; medical & health care).
  • Writing a Business Plan: An Example for a Small Premium Winery (Cornell University) (PDF) A detailed example business plan, with good examples of how to incorporate in-text citations in the industry and competitor analysis sections, and a reference list. more info... close... An Extension Bulletin prepared by Mark E. Pisoni and Gerald B. White, Charles H. Dyson School of Applied Economics and Management at Cornell University.
  • Business Plan for Caregaroo (Kiana Mohseni, Simon Fraser University) MBA student project (Simon Fraser University)

Business Plans - Writing

The following sources provide guidance on writing business plans and may also include a sample plan or template.

  • Writing your business plan (Canada Business Network) This Government of Canada site provides extensive guidance for entrepreneurs on business planning and writing your business plan.
  • Essential Elements of a good business plan (US Small Business Administration)
  • Planning for success: your guide to preparing a business & marketing plan (PDF file) This guide from the Atlantic Canada Opportunities Agency walks entrepreneurs through the process of preparing a business & marketing plan. It includes recommendations on what to include in each section and how to calculate and display relevant data such as market share, breakeven analysis, cash flow forecasts and financial statements.
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  • Last Updated: Feb 7, 2024 3:37 PM
  • URL: https://researchguides.library.brocku.ca/ENTR2P91

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10 Feasibility study and business plan differences you should know

by Naiyer Jawaid | Nov 8, 2021 | Development , Real Estate | 5 comments

Feasibility study and business plan differences

Feasibility study and business plan differences are subtle. In this post we will discuss 10 differences will help you to evaluate and differentiate between a feasibility study and a business plan.

Do you know what is a feasibility report? Do you know what is a business plan? Can you easily differentiate between a feasibility report and a business plan?

It’s easy! Just read out through the article and it will all be easy.

Let’s start by learning about a feasibility report:

A feasibility study is a formal document that assist in the identification and investigation of a proposed project. We can identify the project's weaknesses and strengths with the support of a feasibility study report, which saves us time and energy. We can determine whether the suggested idea will be lucrative and practicable in the future.

Before investing in a project, it is critical to determine if the project will be beneficial in the long run. The organization also needs to know how much the project will cost. Overall, a feasibility analysis indicates whether the firm should invest or continue with the project.

feasibility study business plan sample

You should also like to read When to do feasibility study?

Now let us learn about business plan:

A business plan is a formal document that contains the goals/ objective of the business, the time in which the goal will be completed and the strategies that can be adopted to reach the specific goal.

A business plan is a necessary document for every new firm to have in place before it can begin operations. Writing a credible business plan is typically a requirement for banks and venture capital companies before contemplating granting funding to new enterprises.

It is not a smart idea to operate without a business strategy. In fact, very few businesses can survive for long without one. There are many more advantages to developing and keeping to a strong business plan, such as the ability to think through ideas without investing too much money and, eventually, losing money. Business plans are used by start-ups to get off the ground and attract outside investors.

A feasibility study is used to assess if a business or a concept is viable. After the business opportunity has been identified, the business strategy is produced. “A feasibility study is carried out with the goal of determining the workability and profitability of a company venture. A feasibility study is conducted before any money is committed in a new business endeavour to see whether it is worth the time, effort, and resources.

feasibility study business plan sample

Similarities between a Feasibility study and a business plan

It's essential to analyse the similarities between a feasibility study and a business plan because they're both implemented altogether in same ways to help you build a lucrative company. The following are some of the similarities between the two documents:

Time: Both the reports are completed before the business begins and can be repeated afterwards to decide the next stages for new concepts.

Input: Both Feasibility report and the Business plan include input from a variety of people or departments with a variety of talents.

Format: Both report formats incorporate other documents that are gathered in order to create the report.

Components: Examining the target market, market circumstances, and financial expenses are some of the topics examined.

Use: Both may be displayed to potential investors and can assist the organization's management in making choices.

Organizations uses a business plan and a feasibility study as analytical and decision-making tools.

Although the three tools can be used in conjunction with one another in decision-making processes, they each have their own strengths and weaknesses, and they appear to target and address separate processes.

You might also like to read How to write a feasibility study report?

feasibility study business plan sample

Now let us evaluate the difference between feasibility report and a business report-

  • A feasibility study is conducted to determine the viability and profitability of a business endeavour. A feasibility study is conducted before any money is committed in a new business endeavour to see whether it is worth the time, effort, and resources.

A business plan, on the other hand, is created only when it has been determined that a business opportunity exists and that the endeavour is about to begin.

  • A feasibility report is the first step and after that a business plan is made to be implemented, without feasibility report a business plan cannot be made.
  • A feasibility study contains computations, research, and projected financial forecasts for a company possibility. A business plan, on the other hand, is mostly comprised of tactics and strategies to be applied to establish and expand the company.
  • A feasibility study is concerned with the viability of a business concept, but a business plan is concerned with the development and sustainability of a company.
  • A feasibility report informs the entrepreneur about the profit potential of a company concept or opportunity, whereas a business plan assists the entrepreneur in raising the necessary start-up cash from investors.
  • Key components of a feasibility study and a business plan
  • A business plan does not include the description of the sales methods used, such as distribution agreements, strategic alliances, and the amount of involvement with partners, as well as the payment terms, warranties, and other customer support.

But a feasibility report includes all the sales methods, strategies, alliances to payment and customer support.

  •  Feasibility report contains:
  • Assists in cost estimation, describe the production site, required inputs, and sourcing region.
  • Physical description of the factory, including machine, capacity, warehouse, and supply chain, is necessary.
  • Indicate if the area used for production is rented or owned. This will have an impact on the financial forecast.
  • Information regarding the manufacturer's capacity, order details, price, and so on, if manufacturing is outsourced. To aid in cost estimation, describe the production site, needed inputs, and sourcing location.
  • A physical description of the factory, including machine, capacity, warehouse, and supply chain, is necessary.

But a business plan does not contain anything related to production and operations, but a business plan contains all the information related to management.

  • A poorly written business plan – poor projections, strategies, analysis, business model, and environmental factors, among other things – can be easily adjusted during business operations, but this cannot be said of a feasibility study because an incorrect conclusion in a feasibility study can be costly — it could mean launching a venture with little chance of survival or approving a proposal that wastes the company's human and financial resources.
  •  A business plan presume that a company will prosper and lays out the procedures needed to get there. Those in charge of conducting a feasibility study should not have any predetermined notions regarding the likelihood of success. They must maintain as much objectivity as possible. They do research and allow the facts to lead to the study's conclusion. If the study concludes that the idea is viable, some of the findings, such as market size predictions, may be incorporated in the company's business plan.

You should also read What is land development feasibility study?

These 10 differences will help you to evaluate and differentiate between a feasibility study and a business plan.

Feasibility study may appear to be like the business plan in many respects. "A feasibility study may easily be transformed to a business plan” but it is crucial to remember that the feasibility study is completed prior to the endeavor. The business plan should be thought of in terms of growth and sustainability, whereas the feasibility study should be thought of in terms of concept viability.

This is all you need to know and understand about feasibility study and business plan.

Get ready to apply your knowledge in the real words with lots of success.

You might also like to explore below external contents on  feasibility study :

  • What Is a Feasibility Study? – Types & Benefits
  • Best 8 Property Management Software
  • FEASIBILITY STUDIES & BUSINESS PLANS

Hope you enjoyed this post on  feasibility study , let me know what you think in the comment section below.

Are you someone involved with real estate feasibility?

We are excited to launch the next generation of real estate feasibility software to help you manage your development projects with ease.

Register now for a free trail license!

Jacob Trevor

This is a very good piece of writing. When you have a concept for a company but want to be sure it’s a good idea, you do a feasibility study.

Ataliah Kyamazima

It was very helpful. Thank you so much!

James Hilton

Appropriately timed! A company’s future operations are laid out in great detail in the company’s business plan. Once you’ve done your feasibility study, you’ll know whether or not the proposal has merit. The next step is to lay out your goals, whether financial and otherwise, as well as the strategies you want to use to attain them and the organisational structure you envision.

Matt Henry

Prior to the company opening, both are undertaken, and may be repeated again in the future to identify the next steps on new ideas that may arise.

Jaun Paul

Great Content.

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Top 5 Feasibility Study Templates with Samples and Examples

Top 5 Feasibility Study Templates with Samples and Examples

Sapna Singh

author-user

A feasibility study is the first stage of any project or plan’s design. The study ensures that a project is legally, technically, and commercially feasible. In 1979, Essilor, a French-based international ophthalmic optics business, developed a new type of glass-and-plastic composite lens. The management failed to perform market studies (feasibility studies) due to overconfidence in the success of their original product. The company, however, struggled to keep the product afloat and eventually abandoned it in 1990, after spending $300 million.

A feasibility report is significant in deciding on multi-million-dollar projects. Find PPT Templates  that can make your project feasibility report stand out.

To prevent this situation, businesses should conduct detailed feasibility assessments and review them frequently at the start of each project. A thorough assessment of a project’s feasibility is essential for determining its chances of success.

Feasibility Study: A preliminary exploration of a proposed project

A feasibility study assesses the objective and logical analysis of a new business or endeavor to identify its strengths and weaknesses, potential opportunities and risks, resources needed to execute it, and chances of success in the long run. It assists you in determining whether to proceed with the suggested project concept.

Download our fascinating Feasibility Analysis PPT Templates  to build your organization’s assessment guidelines. Click here  to learn more.

This blog offers templates and samples you need to make an informed choice about the business opportunity by creating a market-driven, cost-effective feasibility study. Use Top 5 Feasibility Study Templates  from SlideTeam to examine the aspects of a proposed project. These templates will help you and other stakeholders understand the planned project. The 100% customizable nature of the templates provides you with the flexibility to edit your presentations. The content-ready slides give you the much-needed structure.

Use SlideTeam’s best-in-class PowerPoint Templates to evaluate a new business endeavor ’s viability from all angles.

These presentation templates are the greatest assessment tools when contemplating starting a new project.

Template 1: Feasibility Study Templates across Varied Projects

A feasibility analysis evaluates the likelihood of a project’s success. Use this PPT Template as a valuable and practical project assessment tool to assist your company in researching and assessing risks connected with a project or operation. This comprehensive deck includes feasibility studies for healthcare, restaurant, construction, e-commerce, software, and bank businesses. Executive summary, project overview, project program costs, project overview, financial study, technical analysis, conclusion, and recommendation are all included. This presentation template offers a thorough analysis, insight into current business practices and issues, and information on how solutions may impact a particular business setting. Get it now!

Feasibility Study Templates across Varied Projects

Download this template

Template 2: Proposal for Retail Store Opening Feasibility Study PPT

Use this PPT Template to present a retail proposal’s economic feasibility assessment. This feasibility analysis comprises market and competitive assessments, location and site analyses, and political, legal, and financial components. This is essential for determining a project’s feasibility and final go/no-go decision. Use this presentation to create a well-defined retail business strategy that will help you succeed. Download now!

Proposal for Retail Store Opening Feasibility Study PPT

Template 3: Financial and Economic Feasibility Study Framework

Use this PPT Template to outline the feasibility analysis framework for conducting financial and economic assessments. This template is valuable for completing a project analysis and creating a solid proposal. It includes details on the work scope, project initiation, environmental analysis, technical analysis, financial planning, etc. This presentation slide demonstrates the relationship between your product’s distinctiveness and customer expectations. Save it now!

Financial and Economic Feasibility Study Framework

Template 4: Construction Project Cost Financial Feasibility Study

Use this PPT Template to demonstrate the economic feasibility of a construction project. This component of a business feasibility study assists project owners/proposed investors in determining the project's likelihood of success. It covers cost-benefit analysis and construction cost analysis to estimate project value, project return, and project sustainability. Using this download, you can evaluate your Return On Investment (ROI) and the venture's success. Download now!

Construction Project Cost Financial Feasibility Study

Template 5: Project Current Status with Feasibility Study

A business feasibility study assesses the proposal’s viability. Use this PPT Template to review the current state of your project. This project analysis contains metrics such as site selection, site screen, feasibility study, baseline surveys, appraisal drill, and or seismic studies. Use this presentation template to assess the project’s viability for possible investors and financial institutions. Get it now!

Project Current Status with Feasibility Study

Template 6: Project Management Plan Process with Feasibility Study

Use this PPT Template to demonstrate a thorough review of critical variables for a capital campaign. This feasibility analysis contains tasks such as pre-campaign preparation, campaign planning, feasibility study, campaign launch, and campaign follow-up. This is an essential tool for project managers to grasp project characteristics, business goals, and risk concerns. With this download, you can use feasibility tools to break down assignments into digestible chunks with attainable timeframes. Get it now!

Project Management Plan Process with Feasibility Study

Analyze viability of an idea

A feasibility study describes and analyses options or approaches for achieving commercial success. Use SlideTeam’s PPT Templates to increase the likelihood of success by identifying and minimizing project-related concerns early on.

PS A well-crafted Project Tasks List  is at the heart of any successful project. Click here  to download the best roadmap for your team, stakeholders, and yourself.

FAQs ON FEASIBILITY STUDY

What are the four types of feasibility studies in project management.

  • A technical feasibility study examines the technical resources available for your project.
  • Financial feasibility describes if your proposal is financially viable. A financial feasibility report includes a cost/benefit analysis of the project.
  • Market feasibility is assessing within your team on how it anticipates the project’s deliverables to perform in the market.
  • An operational feasibility assessment determines whether your organization can complete this project.

What are the five major components of a feasibility study?

  • Economic Feasibility
  • Market Feasibility
  • Technical Feasibility
  • Financial Feasibility
  • Management Feasibility

SlideTeam has specialized products to study and establish each of these types of feasibility.

Who conducts feasibility studies?

An independent competent expert with recognized experience in the operation type under consideration should conduct a feasibility study. The analyst must be a firm with a proprietary interest in the project, a vendor, or any other person with an interest or vested interest in the study’s outcome.

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Examples of Business Feasibility Reports

  • Small Business
  • Business Planning & Strategy
  • Business Strategy Examples
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How to Create a New Business Plan

How to write a business plan for jewelry making, how to write a business description.

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Almost all business decisions require some degree of thoughtful analysis before a decision is made. Small business owners want to find the answers that determine if they should proceed with a proposed idea or not. Business feasibility reports provide the answer to that question.

What Is a Business Feasibility Report?

Business feasibility reports are analyses of a proposed venture or project that looks into the following areas:

  • A description of the idea or project
  • Analysis of the market for the products or services
  • Competition
  • Technical issues involved
  • How the organization will be structured
  • Financial projections

What Is the Proposal?

A feasibility study starts with a description of the products or services to be marketed, and it outlines a model of how the business intends to make a profit. It describes the types and quality of products that will be offered and a timeline for preparation, implementation and the time it will take to reach profitable production volumes.

A description of the project also includes its social, economic and environmental impact on surrounding communities.

What Is the Market?

The market portion of the feasibility study identifies the target market segments and describes the scope and size of the overall industry. It includes estimates of the future direction and strength of the demand for the products and services. What are the demographics of the potential consumers? How will the goods get distributed to the market?

Is the market stable or are future changes expected that will offer opportunities for the new venture?

What About the Competition?

Is the competition concentrated in a few large manufacturers or spread among numerous small producers? Who are the major competitors, and how will the new venture compete against them? What are the barriers to entry into the market?

Your business reports should outline a pricing strategy designed to attract customers from competitors and grow the sales of the company.

What Are the Technical Considerations?

The study will identify the type, size and location of any production facilities. It will outline the necessary buildings, equipment, distribution areas and inventory requirements and storage. Discuss any technologies that will be employed.

Describe the needed access to raw materials and labor. Who will be the potential suppliers and where are they located? What is the availability of the necessary skills in the local labor market?

A section of the feasibility study should discuss the environmental impact of the project and any potential regulatory issues or emissions problems.

How Will the Venture be Organized?

For any new project to achieve success, it must have an organizational structure designed to manage and control its operations, marketing and sales. What are the positions that will be required, and are there people available with the necessary skills to fill these positions?

What Are the Financial Projections?

Any new proposed ideas or ventures usually have an objective of somehow making a profit. Projections of future sales, expenses, profits and cash flow are intended to impart some understanding of the possible results of the project.

Financial considerations would describe the initial capital requirements, working capital needs and availability of supplier credit. They would also discuss possible alternative sources of funds, such as bank loans or venture capital partners.

A Business Feasibility Report Versus a Business Plan

A business feasibility report is not a business plan. A feasibility study is an investigative process that seeks to determine the viability of a business venture. It is conducted before a business plan is even considered.

A business plan describes the steps needed to take a proposal from an idea to the reality of implementation after the decision has been made to go ahead with the project.

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James Woodruff has been a management consultant to more than 1,000 small businesses. As a senior management consultant and owner, he used his technical expertise to conduct an analysis of a company's operational, financial and business management issues. James has been writing business and finance related topics for work.chron, bizfluent.com, smallbusiness.chron.com and e-commerce websites since 2007. He graduated from Georgia Tech with a Bachelor of Mechanical Engineering and received an MBA from Columbia University.

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How to Write a Feasibility Study Report For Small Business

Feasibility study sample for small business.

Do you know how to write a feasibility study for a small business?

Businesses are established to meet demands without which they would not exist. The success of any business depends on the strength of its feasibility studies, hence our focus; how to write a feasibility report format.

But what is a feasibility report? It is simply a document carefully prepared that examines the viability of a business venture.

This document is prepared through the assessment of opportunities or problems faced by a business to chart a course of action that will fully take advantage of opportunities, and also solve any problems.

Feasibility report writing is carried out by experts in the field following a guiding principle that can be replicated across any field of business endeavor.

The process takes into account all the challenges faced by the business and draws several lines of possible actions intended at solving these problems.

GUIDE:  COMPARING BUSINESS PLAN, FEASIBILITY STUDY AND BUSINESS PROPOSAL

Therefore, having an excellent knowledge of how to write a feasibility analysis is necessary.

INTRODUCTION

Proper planning and assessment is a must for any business to succeed. In this post, I will be sharing with you a simple format on how to write a good feasibility report with a sample showing the major headings to be discussed when developing your feasibility report format for a new business.

No matter the level of your experience in that investment opportunity, a feasibility report should be prepare when starting a new business or aiming to expand an existing one.

The format of a feasibility report is prepared by the prospective business owner, although the service of writing a business plan can also be contracted to consultancy firms who would charge a fee for providing such service.

The core reason for learning how to make a feasibility study for business is to determine whether the investment would be viable or not so it is based on the outcome of the business plan that the investor will decide to accept or reject the project.

The entrepreneur will assess the capital requirement as will determine whether he has the financial capacity to launch such business and sustain it.

With this guide, you will understand how to prepare a financial project feasibility study template.

Purpose of A Feasibility Study

There are numerous advantages to developing a feasibility report. I will talk about a few reasons why you should learn how to make a feasibility study for a business.

A well-prepared sample project feasibility report will:

– assist in securing financial assistance such as loans from banks. – aid decision making in the investment – help investors make expansion and plan easily – provide a platform for performance assessment in business

How to Prepare a Feasibility Report Example for Small Business

Here is how to write a feasibility study report write steps with suitable examples:

The Executive Summary

In writing a business feasibility report , the executive summary should come first. This should contain basic information that should include a summary of the information relating to the business that is to be considered.

In other words, it should capture the problems as well as opportunities under review. Also, any information needing the approval or disapproval of experts should be included. This is in addition to any problems or challenges that require additional analysis.

The Statement of the Problem (Opportunity)

This is after the problem must have been identified. This should be followed by carefully stating the problem.

However, the focus is not only on the problem as available opportunities are earlier identified should be included in the statement of the problem. This is a great way of writing a feasibility report with little or no difficulty.

This allows for a detailed analysis of these problems and opportunities to take advantage of the available opportunities while proffering solutions to the raised problems.

The Requirements of the Business

Here, insights from previous knowledge and research are drawn upon to give perspective to the problems and opportunities raised.

Also, policies and laws inhibiting the growth of the business are taken into account. To produce a good feasibility report, every possible detail should be included for analysis.

Every requirement of the business, both present and absent are carefully analyzed to develop an all-encompassing growth strategy that will guide the business to profitability and sustainable growth.

To achieve the best results, using a detailed approach that streamlines the entire process is important.

Work is reduced considerably, as experts can carefully examine the problems and opportunities presented by the business while developing the best response to them.

Analyzing Available Options

When writing a feasibility report, this part is very crucial and should be taken with all the seriousness it requires.

Every information gathered from the previous sections is fully analyzed here through a session of brainstorming to come up with improved products and services that will meet clients’ expectations and needs.

Also, It eliminates every unwanted structure found within the business that works against the progress of the business.

When writing a feasibility report, close attention is paid to this section. All the options are brought forward including the very good to the not-too-good. These are selected according to the impacts (helpful) on the business. The unwanted ones are discarded.

Marketing Plans

A good feasibility report includes a marketing plan. Under the marketing plan, all the strategies used should undergo scrutiny which is aimed at ensuring that those strategies with the least impact are fine-tuned or improved upon while those not making any meaningful impact are discarded.

Thus, all the marketing strategies being used should be included in the marketing plan.

Recommendation of Findings

After making carrying out a detailed analysis of the entire framework of the business, the entire process of the feasibility report boils down to proffering solutions to problems raised.

When writing this section, it is recommended that the solutions to the problems raised should be such that the needs of the clients are taken into consideration, while using cost-effective measures that do not reduce the profit margin of the business.

Writing a Conclusion

After the entire process of writing a feasibility report for a restaurant or any other business, a recommendation (which should contain the aim of the entire process) should be given providing the best way the problems faced by the business should be tackled. In the same vein, there should be a detailed process that explains how to take advantage of the opportunities presented by the business venture.

The conclusion should contain a summary of the entire feasibility report, as anyone reading this section should be able to have a general idea of what the report is all about.

EXAMPLES OF  FEASIBILITY STUDY TEMPLATES FOR SMALL BUSINESSES

To learn how to write a formal feasibility study on the proposed business, here are the key items to consider: The nature of the investment, Management and organization, team, Economic and financial planning, and analysis, small business marketing plans and strategies.

  • COFFEE SHOP
  • TRAVEL AGENCY
  • MANUFACTURING BUSINESS

In conclusion, when writing a good feasibility report, you should do well to cover these nine core areas:

1. Introduction 2. Business Description of the business 3. Market Evaluation 4. Management And Production Team 5. Technical Requirements And Production Plan 6. Marketing Plans And Strategies 7. Evaluation of Risk And Challenges Evaluation 8. Financial Analysis And Economic Plans 9. Overall Assessment And Conclusion

This article has sought to guide how to write a feasibility report. Following the procedure provided here will certainly result in a well written out feasibility report.

A good feasibility report has the capacity of turning around the fortunes of business and redirecting it towards the path of profitability and growth.

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  1. How to conduct a feasibility study: Template and examples

    1. Clearly define the opportunity 2. Define the objective and scope 3. Conduct market and user research 4. Analyze technical feasibility 5. Assess financial viability 6. Evaluate potential risks 7. Decide, prepare, and share Feasibility study example Feasibility study template Overcoming stakeholder management challenges Final thoughts

  2. 48 Feasibility Study Examples & Templates (100% Free)

    Feasibility Study Examples 48 Feasibility Study Examples & Templates (100% Free) If you try to read a feasibility study example, you'll realize that it's a document which analyzes the relevant factors of a specific project including the scheduling, legal, economic, and technical considerations.

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  5. Business Feasibility Studies

    Think of a feasibility study as a saddle and a business plan as a horse. Just like you need a saddle and stirrups to control a horse, you need a feasibility study to guide and inform your business plan. Sure, you can try to form a business plan without any prep, but just like riding a horse without a saddle, you'll probably get bucked.

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  10. Downloadable Free Feasibility Study Template

    Technology Considerations This section of the feasibility study should explain any considerations the organization must make with regards to technology. Many new initiatives rely on technology to manage or monitor various business functions.

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