How to conduct a feasibility Study


Feasibility study is a study carried out to ascertain the legal, management, and operational needs of a business.

FEASIBILITY STUDY REPORT
This a comprehensive document which shows the outcome of the viability test of a particular business venture.

The document is a combination of analysed field data, survey and other components.

This study is carried out to determine the viability of a business, the size of a market, current prices products and services etc.

TOP BENEFITS OF FEASIBILITY STUDY AND REPORT
To give a comprehensive overview of your project

To bring to notice, discover or exploit some of the opportunities that were not noticeably there at the start.

Feasibility study enhances the success of a business

Feasibility study increases insight for better project decision making.

It helps to give your team members focus and sense of direction.

Feasibility study helps to clarify the need of the project.

CORE COMPONENTS OF FEASIBILITY
TECHNICAL FEASIBILITY

Before you delve into a project you need to ascertain if you have the Technical competence and resources such as Software, Hardware, and technical man power to complete the project successfully without abrogating it along the way.



OPERATIONAL FEASIBILITY

Does the project you want to embark on have the ability to Solve the set problems you want to solve, is the project maintainable, sustainable and reliable.

There is no need wasting scarce resources to embark on a project which will be abandoned at the end of the day.



LEGAL FEASIBILITY

To know if the company has all the fundamental legal requirements to start and accomplish a particular project.

It will be a waste of resources and time to start a project without having all the necessary legal documents.



TIME FEASIBILITY

This is a very important component of the feasibility study and a crucial question that must be answered.

Before embarking on a project, you have to embark on a project that is achievable within a giving time frame.

It is highly important that you come up with a realizable project completion deadline.

Don't involve too many projects that might not be completed within a giving time frame.

It is also good to note that the timeframe for completion of a given project depends on the size of your team, their core competence and experience to deliver the projects, and the resources available for the execution of the project.



ECONOMIC FEASIBILITY

This is the most crucial and important part. You have to know whether the acrubale profit or revenue from the project is worth the money invested on it.



FINANCIAL FEASIBILITY

You have to know if you have the required financial need to go into such a project at the moment, otherwise you should first of all seek internal and external borrowing plans to raise money for the project.



HOW TO PREPARE A FEASIBILITY STUDY
A Feasibility study report has a couple of sections which make up the document.

You can follow these steps by step procedures to prepare a comprehensive feasibility study that will not be well detailed but also very easy to understand and anybody who will go through it.



THE INTRODUCTION:
This section contains the basics and benefits of the project you want to embark on, process flows and how it will be achieved

However you should try as much as possible to summarise the entire details of the entire project in this section and avoid long introduction.

DESCRIPTION OF THE PROJECT
This section outlines the vision, mission and the objectives of the project, the location, resources for the project, the project history and what motivated you to embark on the project.

CONDUCT THE PRELIMINARY ANALYSIS
Full scale Feasibility study is a time and resource consuming project. Instead of jumping into it straight ahead, it is better to conduct a preliminary study and analysis.

This can further qualify the eligibility of the feasibility study.

Follow this Four Steps to perform a preliminary Feasibility Study.

CREATE AN IDEA OUTLINE:
Outline everything you hope to achieve by undertaking this project and its positive contribution to your team, the stakeholders and your organisation as a whole.

You can lay emphasis on similar projects that were carried out and completed successfully, to buttress the significant importance of the project to your organisation.

Also Outline your innovative approach that will make you achieve the set goals and the project within the set time frame.

Some of the innovative approaches could be incorporating technology such as; creating Mobile apps, websites, special gadgets, involving a special talent or experts, and choosing a particular location.

Also determine the risk associated with the project. Analysing risk management is a way of determining the viability of the business.

Once this Preliminary step is completed, you will have an idea of whether to continue or abandon a particular conceptualised project.

CREATE AN OUTLINE SCOPE
Now that you have a rudimentary understanding of the nature of the project you are getting yourself into, it’s time to create a scope outline.

This outline will detail the objectives of the project by using these five feasibility questions.

Is this plan technically feasible?
Is this plan legal?
Is this plan operationally feasible?
Is this plan feasible within a reasonable period of time?
Is this plan economically feasible?

Using these five questions, you will outline the core tenets of this project including what the current situation or issue is that you plan to solve.

what you plan to accomplish, estimations on the impact of the project, and what it will take to accomplish this goal.





MARKET DESCRIPTION
In this section you identify your target customers and how you plan to convert them into your regular customers.

You will also talk about your industry and mention what link or distribution chain you want to partake in it.

Also list your competition advantage.

This section paints a clear picture of what the market for your products or services look like.

DESCRIPTION OF PRODUCTS AND SERVICES
In this section you will give in details the products you will produce, buy and sell, or the set services you will be offering to your customers and clients during the course of the project.

You should indicate their prices and state what makes them different from that of the competitors and factors that will make your product more attractive to the customer than your competitors own.

You should also show the process you went through in selecting them..

ORGANISATIONAL PLAN
In this section you will state the type of business you are launching, the licenses and permits needed for such business and how you are going to acquire them prior to your launching.

Other things you are required to state here are your team members and their brief details and the roles they will be playing in your business.

TECHNICAL SPECIFICATION AND PRODUCTION PLAN
This section talks about the production process and all the steps that are involved such as the machineries or tools that you will acquire and install, the raw materials needed for your production and its accessibility, Technical manpower needed in the production chain to get the final products, estimated costs of production etc.

This section tends to paint a vivid picture of what it takes to bring out the final product and launch to the market.

MARKETING PLAN
This section is very important and very crucial to the overall success of the project, because if your product fails to penetrate the market, it means the whole project will become a total failure.

So while writing this section, make sure it is articulate and carefully drafted with the realities of the study carried out in the field so as to deploy the right strategies.

In this section you need to clearly state your market penetration and domination strategy which involves several promotional strategies you will implement.

A careful study of your customers psychological behaviour and your competitors strength will enable you to come up with the right strategy.

Also you need to state your customer acquisition and retention strategy.

RISK ASSESSMENT REPORT
Evaluating the potential risk of a particular business will enable you to work towards minimising such risk.

Every business has its own risk but having a full knowledge of these risks will enable you to manage these risks associated with your business effectively.

FINANCIAL PLAN
In this section you will state your potential Startup Capital and overall analysis which involves how you want to use the startup fund, the expenses you will incur in the course of establishing your business.
The assets you are supposed to acquire for the business, how you intend to generate revenue and with all these values together you will prepare your balance sheet, profit and loss statements and cash flow projections.

EVALUATION AND CONCLUSION
In this section you will include the references used in the course of preparing your feasibility study report. It will also include your total observation, recommendation and it's viability.

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