feasibility study intro

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Introduction

This page describes howthe different types offeasibility study havebeen and are currentlyused to suit differentcircumstances right

across the globe.

What is abusinessdevelopmentfeasibility

study?A business developmentfeasibility study is ananalytical tool that isused to determine if aparticular businessconcept is viable and is

heavily weightedtowards market researchand analysis. It mustprovide clear evidence tothe stakeholders that aconcept is viable.

Only 1 or 2% of new

business ideas areactually viable - that's


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why we are not allmillionaires! So thebusiness developmentfeasibility study is a veryuseful tool that must beused to avoid the wasteof valuable resources.

If the results of the studyshow that the project isfeasible then it can bedeveloped into a full

scale business plan.

The businessdevelopment feasibilitystudy would includesections dealing with:

Introduction

Details of the product orservice

Identification of anytechnical issues

The existing market andthe competition

The business structureMarketing and sales

strategyOperational parametersStaffing levelsPatents, trademarks etcRegulatory issuesEnvironmental issuesRisk analysisProfit and loss and

balance sheet


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forecastsCash flow and capital

requirementsRecommendations and

conclusions

What is thedifferencebetween pre-feasibility

studies,businessdevelopmentfeasibilitystudies andprojectdevelopmentfeasibilitystudies?

They are all similar butbecause the final product

is different there is adifferent emphasis onthe various elements ofeach study.

For instance if a firm isplanning to establish anew business making

shoes in one of fourcountries somewhere in


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Europe thepre-feasibilitystudymight include:

Introduction to the basic

social and businessinfrastructure ofeach country

The skills of the localworkforces

The availability of localraw materials andtheir cost and

qualityThe capex and opex of

the manufacturingfacility

The social, political andeconomic risks

The incentives availableThe planning and

regulatory regimeRecommendations of the

country of choiceand terms ofreference for afeasibility study

Or;

If an establishedinternational shoe-makeris planning to establish anew business makingshoes in Italy Thebusiness feasibility studymight include the


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following elements:

IntroductionDetails of the range of

shoesThe machinery to be

usedThe market for the shoes

and the competitionThe business structure of

the foreign entityMarketing and sales

strategyOperational parametersStaffing levelsPatents, trademarks etcRegulatory issuesEnvironmental issuesRisk analysisProfit and loss and

balance sheetforecasts

Cash flow and capitalrequirements

Recommendations andconclusions

Or;

If an establishedinternational shoe-makeris planning to build afactory extensionalongside its existingoperation The projectdevelopment feasibility


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studymight include

IntroductionDetails of the new range

of shoesExamination of new

manufacturingtechniques and themachinery required

How the new range willcompete in theexisting market and

the competitionThe additional managers

requiredStaffing levelsPlanning and local issuesRisk analysisProfit and loss and

balance sheetforecasts

Cash flow and capitalrequirements

Recommendations andconclusions

What is the

differencebetween afeasibilitystudy and abusiness plan?

A feasibility study is not


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a business plan. Theseparate roles of thefeasibility study and thebusiness plan arefrequentlymisunderstood. Thefeasibility study providesan investigating functionthat should answer thequestion of Is this aviable businessventure?

The business planprovides a planningfunction that outlines theactions needed to takethe proposal from ideato reality.

The feasibility studyoutlines and analyzesseveral alternatives ormethods of achievingbusiness success. So thefeasibility study helps tonarrow the scope of theproject to identify the

best business model. Thebusiness plan deals withonly one alternative ormodel. The feasibilitystudy must narrow thescope of the project toidentify and define twoor three scenarios or

alternatives. The


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feasibility study intro

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