discuss the difference between feasibility study and business plan

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 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.

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.

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?

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.

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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.

It was very helpful. Thank you so much!

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.

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.

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Feasibility Study and Business Plan are essential tools in the business development process. They serve different purposes and are conducted at different stages. A feasibility study helps determine the viability of a business idea; whereas, a business plan provides a detailed roadmap for executing that idea and achieving business goals.

What is a Feasibility Study?

A feasibility study is a comprehensive assessment conducted at the early stages of a business idea or project to evaluate its potential viability and identify potential risks and challenges. The primary purpose of a feasibility study is to determine whether the proposed business venture is feasible and worth pursuing further.

Features of the Feasibility Study are:

• Market Analysis: Feasibility Study evaluates the target market , including its size, growth potential, demographics, and competition. This involves researching customer needs, preferences, and behavior to assess demand for the proposed product or service .
• Technical Feasibility: A feasibility study assesses the technical requirements and capabilities needed to develop and deliver the product or service. This may involve evaluating technology, equipment, facilities, and expertise required for production or implementation.
• Financial Feasibility: A feasibility study conducts financial analysis to estimate the costs involved in starting and operating the business, as well as potential revenue and profitability. This includes preparing financial projections, such as income statements , cash flow statements , and Return on Investment (ROI) calculations.

What is a Business Plan?

A business plan is a comprehensive document that outlines the goals, strategies, operations, and financial projections of a business. It serves as a roadmap for the organization’s future direction and provides a detailed blueprint for how the business will be structured, managed, and operated.

Features of a Business Plan are:

• Executive Summary: A business plan gives a brief overview of the business concept, objectives, products or services offered, target market, competitive advantage, and financial projections.
• Company Description: It gives detailed information about the business, including its history, mission statement, vision, values, legal structure, location, and ownership.
• Market Analysis: A business plan is formed after analyzing the target market, including its size, growth potential, demographics, buying behavior , market trends, and competition. This section also outlines the business’s market positioning and competitive strategy.

Feasibility Study and Business Plan – FAQs

When should a feasibility study be conducted.

A feasibility study is typically conducted at the early stages of developing a business idea or project, before significant resources are invested. It helps entrepreneurs and stakeholders make informed decisions about whether to proceed with the venture.

Who conducts a feasibility study?

Feasibility Studies are often conducted by entrepreneurs, business owners, project managers, consultants, or other professionals with expertise in the relevant industry or field. They may also involve collaboration with specialists such as market researchers, engineers, financial analysts, and legal advisors.

When should a business plan be developed?

A business plan is typically developed after a feasibility study has been conducted and the decision to move forward with the business venture has been made. It provides a detailed blueprint for executing the business idea and achieving its objectives.

Who uses a business plan?

Business plans are used by entrepreneurs, startups, existing businesses, investors, lenders, partners, employees, and other stakeholders interested in understanding the organization’s goals, strategies, operations, and financial prospects.

What are the benefits of conducting a feasibility study?

Benefits of conducting a feasibility study include minimizing risks, identifying potential challenges and opportunities, validating assumptions, attracting investors or lenders, guiding decision-making , and increasing the likelihood of success for the proposed business venture.

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Feasibility study: definition, benefits and differences with a Business Plan

• Last updated on 09 January, 2024

Welcome to our series of articles on feasibility studies.

• What is a Feasibility study?
• What is a bankable feasibility study?
• How to do a feasibility study?
• Feasibility study consultants: expertise needed
• Cost of a feasibility study
• Car Park Feasibility Study: Key considerations
• Hotel Feasibility Study: Methodology
• Feasibility study of solar PV projects: Key components
• Feasibility study of real estate developments
• Feasibility study of marina projects

In this post, we will touch on all the basic concepts behind a feasibility study. definition, benefits of doing it, main parts, differences with a business plan, etc. Aninver Development Partners is a consulting firm specializing in Feasibility studies for projects such as hotels, infrastructure, energy, technology, etc. We assist clients globally. 

Definition of Feasibility study

A feasibility study is a comprehensive and systematic analysis and evaluation of a proposed project, business venture, or initiative to determine its practicality, viability, and potential for success. It involves a thorough examination of various factors, such as financial, technical, operational, legal, environmental, and market-related aspects, to assess whether the project is feasible and worth pursuing. 

The primary goal of a feasibility study is to provide stakeholders with essential information and insights to make informed decisions about whether to proceed with the project, abandon it, or make necessary adjustments to enhance its chances of success.

Differences between a feasibility study and a business plan

Feasibility studies and business plans are both important tools in the development and evaluation of a business or project, but they serve different purposes and are created at different stages of the process. Here are the key differences between a feasibility study and a business plan:

Differences in Purpose

• Feasibility Study : Feasibility studies are conducted in the early stages of project development or business planning. Their primary purpose is to determine whether a proposed project or business idea is viable and should be pursued. Feasibility studies focus on assessing the potential risks, challenges, and opportunities associated with the project.
• Business Plan : Business plans are created after the feasibility study, once it has been established that the project is viable. The purpose of a business plan is to outline in detail how the business will be structured, operated, and grown. It serves as a roadmap for the future of the business and is often used to secure financing.

Differences in Content

• Feasibility Study : A feasibility study includes an analysis of the project's overall concept, market research, technical requirements, financial projections, potential risks, and recommendations. It provides a high-level overview of the project's feasibility.
• Business Plan : A business plan is a detailed document that outlines the company's mission, vision, goals, organizational structure, market strategy, marketing and sales plans, financial forecasts, and operational details. It delves into the specifics of how the business will operate.

Differences in Timing

• Feasibility Study : Feasibility studies are conducted at the outset of a project or business idea to assess its potential feasibility. They help stakeholders decide whether to move forward with the project.
• Business Plan : Business plans are typically created after the feasibility study, once it has been determined that the project is feasible and worth pursuing. They provide a roadmap for the actual operation and growth of the business.

Differences in Audience

• Feasibility Study : The primary audience for a feasibility study includes project stakeholders, investors, and decision-makers who need to determine whether the project should proceed.
• Business Plan : Business plans are used to communicate the business's vision and strategy to a wider audience, including potential investors, lenders, partners, and employees.

In summary, a feasibility study is a preliminary assessment of the potential success of a project, while a business plan is a detailed document that outlines how a business will be run. The feasibility study helps determine whether a business plan should be developed, while the business plan provides a comprehensive strategy for the ongoing operation and growth of the business.

Feasibility study vs Pre-feasibility study

Let's explore now the key differences between a prefeasibility study and a feasibility study:

Purpose and Scope : A prefeasibility study and a feasibility study both play critical roles in project evaluation, but they serve distinct purposes. A prefeasibility study is typically the initial phase in the assessment process. Its primary purpose is to provide a preliminary evaluation of a project's potential viability. It helps stakeholders decide whether it's worth investing further resources into a detailed feasibility study. In contrast, a feasibility study goes into much greater depth and detail, assessing the project's practicality from technical, financial, operational, and market perspectives. It aims to provide a comprehensive understanding of whether the project is feasible and worth pursuing.

Level of Detail : One of the key distinctions between the two studies is the level of detail they encompass. A prefeasibility study offers a broad overview of the project, examining high-level factors like market demand, technical requirements, and rough cost estimates. It provides enough information to make an initial go/no-go decision. In contrast, a feasibility study drills down into finer details, providing precise financial projections, risk assessments, engineering specifics, and a comprehensive business plan. It seeks to leave no stone unturned in assessing the project's practicality.

Resource and Cost Implications : A prefeasibility study is generally less resource-intensive and cheaper to conduct compared to a full feasibility study. It acts as a cost-effective filter to eliminate unviable projects early in the evaluation process. Once a project passes the prefeasibility stage and proceeds to a feasibility study, it implies a commitment of more resources, time, and finances due to the comprehensive nature of the study. A prefeasibility study helps in efficient resource allocation by focusing only on the most promising projects, while a feasibility study is a more intensive process suitable for projects that have demonstrated a higher likelihood of success during the prefeasibility assessment.

Benefits of doing a Feasibility study

Conducting a feasibility study offers numerous benefits, making it an essential step in the decision-making process for any project, business venture, or initiative. Here are the key advantages of performing a feasibility study:

• Risk Assessment : Feasibility studies help identify potential risks and challenges associated with a project. By thoroughly examining technical, financial, operational, and market-related aspects, stakeholders can pinpoint areas of concern and develop strategies to mitigate or manage these risks effectively.
• Decision-Making : Feasibility studies provide critical information to decision-makers, helping them make informed choices about whether to proceed with a project. These studies offer a basis for go/no-go decisions, preventing resources from being wasted on unviable endeavors.
• Resource Allocation : By assessing the feasibility of a project, stakeholders can allocate resources more efficiently. They can avoid overinvesting in projects with limited potential and allocate resources to those with a higher likelihood of success.
• Financial Planning : Feasibility studies include detailed financial projections and cost estimates. This financial information is invaluable for securing funding from investors, lenders, or other sources. It helps in creating a solid business case.
• Market Insight : Market feasibility studies provide insights into customer demand, market trends, and competitive dynamics. This information is crucial for designing products or services that meet market needs and for formulating effective marketing strategies.
• Optimized Design : Technical feasibility studies ensure that a project's technical requirements and design are viable. They help in avoiding costly design flaws and ensuring that the project can be implemented as planned.
• Legal and Regulatory Compliance : Feasibility studies can identify potential legal and regulatory challenges. This allows for the development of strategies to navigate and comply with relevant laws and regulations, reducing the risk of legal complications later on.
• Enhanced Project Viability : Feasibility studies may lead to adjustments and improvements in the project plan, making it more viable and likely to succeed. This iterative process ensures that potential issues are addressed proactively.
• Investor and Stakeholder Confidence : When potential investors and stakeholders see that a comprehensive feasibility study has been conducted, they are more likely to have confidence in the project. This can make it easier to secure funding and support.
• Long-Term Planning : Feasibility studies not only assess the viability of a project in the short term but also help in long-term planning. They provide insights into the sustainability and growth potential of a business or initiative.

In summary, conducting a feasibility study is a valuable step in the project development process. It provides a structured approach to assess the viability of a project, manage risks, make informed decisions, secure financing, and set the stage for a successful venture. The benefits of a feasibility study extend beyond initial decision-making and contribute to the overall success and sustainability of a project or business.

Components of a Feasibility study

A feasibility study typically consists of several key components that provide a comprehensive evaluation of a project, business venture, or initiative. These components help stakeholders make informed decisions about the feasibility and viability of the proposed endeavor. The main components of a feasibility study include:

Executive Summary

The executive summary provides a concise overview of the entire feasibility study. It includes a brief description of the project, its objectives, and the key findings and recommendations. It serves as a quick reference for decision-makers.

Project Description

This section outlines the project's goals, objectives, and scope. It defines the problem the project aims to solve or the opportunity it seeks to capture. It also specifies the project's location and the stakeholders involved.

Market Analysis

Market analysis assesses the demand for the product or service within the target market. It includes information on target customers, market size, growth potential, competition, and market trends. This component helps determine whether there is a viable market for the project.

Technical Feasibility

Technical feasibility examines the project's technical requirements. It assesses whether the necessary technology, equipment, and resources are available or can be developed. It also identifies any technical challenges that may need to be addressed.

Operational Feasibility

Operational feasibility evaluates how the project will be implemented and operated. It includes details about project timelines, workflow, personnel requirements, and operational processes. This section helps in understanding how the project will function on a day-to-day basis.

Financial Feasibility

Financial feasibility is a critical component that includes detailed financial projections and analysis. It covers aspects such as startup costs, revenue forecasts, expense estimates, cash flow analysis, and return on investment calculations. It assesses the project's financial viability and potential profitability.

Legal and Regulatory Analysis

This section examines the legal and regulatory requirements that may impact the project. It identifies permits, licenses, or compliance issues that need to be addressed. Understanding and addressing legal and regulatory aspects are essential to avoid potential obstacles.

Risk Assessment

The risk assessment component identifies potential risks and challenges associated with the project. It evaluates the probability and impact of these risks and suggests risk mitigation strategies. Risks can be financial, technical, operational, market-related, or related to external factors.

Recommendations and Conclusion

In this section, the feasibility study summarizes the findings and presents clear recommendations based on the assessment. It often includes a conclusion that states whether the project is feasible and worth pursuing or whether it should be abandoned or modified.

The appendices contain additional supporting documentation and data, such as detailed financial spreadsheets, market research reports, technical specifications, and any other relevant information. These provide a more in-depth reference for stakeholders.

The main components of a feasibility study collectively provide a thorough assessment of a project's viability from multiple angles, ensuring that decision-makers have a comprehensive understanding of the project's potential, risks, and benefits.

Examples of Feasibility studies

Let's look now into some examples of feasibility studies for different types of projects and initiatives:

• Real Estate Development

A real estate developer is considering constructing a residential apartment complex in a growing urban area. A feasibility study would assess factors like market demand, location, zoning regulations, construction costs, potential revenue from rentals, and the financial viability of the project.

• Manufacturing Plant Expansion

A manufacturing company is considering expanding its operations by building a new production facility. The feasibility study would evaluate factors such as available land, infrastructure, equipment requirements, workforce, environmental impact, and the financial feasibility of the expansion.

• Small Business Startup

An entrepreneur is exploring the feasibility of starting a small restaurant in a specific location. The feasibility study would examine the local market, including competitors, target customer demographics, startup costs, regulatory requirements, and financial projections for the first few years of operation.

• Renewable Energy Project

A renewable energy company is considering the construction of a solar power plant. The feasibility study would assess the site's solar exposure, grid connection feasibility, equipment costs, revenue from energy sales, environmental impact, and the return on investment over the project's lifespan.

• Healthcare Facility Expansion

A hospital is contemplating an expansion to meet growing patient demands. The feasibility study would include an assessment of the required medical equipment, staffing needs, regulatory compliance, funding sources, and the anticipated patient load.

• Tourism Development

A tourist destination is considering the construction of a new hotel and recreational facilities. The feasibility study would evaluate the area's appeal to tourists, competition with existing businesses, construction costs, expected occupancy rates, and potential revenue from tourism.

• Nonprofit Program Expansion

A nonprofit organization is looking to expand its community outreach programs. The feasibility study would assess the need for the programs, funding sources, volunteer availability, operational costs, and the impact of the expansion on the organization's mission and goals.

• E-commerce Startup

An entrepreneur plans to launch an e-commerce website. The feasibility study would examine market demand, website development costs, marketing strategies, competitive analysis, and projected sales revenue and profitability.

These examples illustrate how feasibility studies are conducted in various fields and industries to evaluate the potential success and viability of a wide range of projects and initiatives. The specific components and focus areas of a feasibility study will vary depending on the nature of the project and the questions it seeks to address.

7 steps to conduct a Feasibility study

Now, let's think we are going to write a feasibility study. Let's check what steps we need to take to develop the final report.

• Conduct a Preliminary Analysis

Begin by conducting an initial evaluation of the project's objectives and scope. This step involves defining the problem the project intends to address or the opportunity it aims to seize. Ensure that the project's goals are clear and well-defined.

• Analyze Technical Specifications

Examine the technical aspects of the project in detail. Evaluate the availability of required technology, equipment, and resources. Verify that the project's technical requirements can be met effectively.

• Conduct a Commercial Analysis

Perform a comprehensive analysis of the project's commercial aspects. This step involves assessing the market's demand for the product or service, analyzing market size, competition, customer needs, and market trends. Determine if there is a feasible market for the project.

• Prepare a Projected Income Statement

Create a detailed projected income statement for the project. This includes estimating startup costs, revenue forecasts, expense projections, and cash flow analysis. Calculate the return on investment (ROI) to determine the project's financial viability, the Internal Rate of Return (IRR) of the investment and the Net Present Value (NPV) of future cash flows.

• Prepare a Day-Zero Balance Sheet

Develop a balance sheet that represents the project's financial position at the outset (day zero). This financial snapshot should account for all assets, liabilities, and equity to provide a clear overview of the project's financial situation before it begins.

• Analyze Different Alternatives for Feasibility

Explore various alternatives and scenarios for the project's feasibility. Assess different approaches, technologies, or business models to identify the most viable option. Consider the potential impact of these alternatives on the project's success. Make sensibilities to potentila risks.

• Make a Go/No-Go Decision

Based on the findings and analysis conducted throughout the feasibility study, make a well-informed decision on whether to proceed with the project (a "Go" decision) or abandon it (a "No-Go" decision). Ensure that the decision aligns with the project's goals and aligns with the information presented in the study.

These steps provide a structured approach to conducting a feasibility study, ensuring that all relevant aspects of the project are thoroughly assessed and considered before making a decision on its viability.

In conclusion, a feasibility study is an indispensable tool for any project, business venture, or initiative. It serves as the critical bridge between a concept and a well-informed decision. By following a systematic process that includes a preliminary analysis, technical assessment, commercial evaluation, financial projections, and a careful consideration of alternatives, stakeholders can gain a comprehensive understanding of a project's viability.

The feasibility study's ability to assess market demand, technical feasibility, operational requirements, financial viability, and potential risks empowers decision-makers to make informed choices. Whether it's a real estate development, a new product launch, a manufacturing expansion, an IT system upgrade, or any other endeavor, a feasibility study helps in risk management, efficient resource allocation, and, ultimately, the successful realization of the project's goals.

It's important to remember that a well-conducted feasibility study not only serves the purpose of greenlighting a project but also provides a foundation for its long-term success. It gives stakeholders the confidence that the project is based on sound analysis and planning. In a world of complex challenges and opportunities, the feasibility study is a guiding compass for those seeking to turn innovative ideas into reality.

Make sure you hire the right consultants to deliver your feasibility study or business plan. Our firm, Aninver Development Partners, specializes in designing bankable feasibility studies  to make sure projects continue to their following phase. 

Send us a message on our contact page and we can discuss how we can help you. 

Some of our experience conducting feasibility studies can be seen below:

• Feasibility Study for a new marina in the island of San Andrés through PPP
• Pre-feasibility study for construction of silo storages in Northern Ghana through PPP
• Feasibility study of a real estate WAQF project in Cotonou (Benin)
• Feasibility study and analysis of strategic alternatives of a touristic development in Natal
• Feasibility study for creation of an Investment and Export Promotion Agency of Health services in Tunisia
• Feasibility Study for car parks in Bishkek though PPP
• Feasibility study of markets in Benin and Togo under PPP scheme
• Feasibility Study for the establishment of a Large-Scale Cashew Processing Plant in Zambia
• Public Private Partnership (PPPs) study in the Housing Sector
• Review of Business Case for Manila Central Subway
• First Mover PPP Prefeasibility Study
• Review of the feasibility study of the PPP project Complejo El Brillante, in Cordoba (Spain)
• Review of pre-feasibility study of a Health PPP project

Alvaro de la Maza is one the founding partners of Aninver Development Partners. Alvaro is a Civil Engineer, MS on Infrastructure Management and MBA by IESE Business School.Alvaro has extensive experience in Infrastructure and Public Private Partnerships. Alvaro has worked and led multiple consulting projects for clients such as the World Bank, the African Development Bank and other donors.Alvaro enjoys creating digital products and he has led the development of market intelligence platforms in d...

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Business Plan Vs. Feasibility Study

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If you're considering starting a business, you'll need both a feasibility study and a business plan. Both documents should be written after conducting thorough research and critical thinking, and conveyed in formats that others can understand. That way, you can show both to people whose opinions you value as well as to those you hope will invest in your idea. Before you begin, it's important to define and distinguish between a feasibility study and a business plan.

Defining Both Terms

A feasibility study is done before starting a business, when you have the idea for the business but you want to make sure it's feasible, or advisable. Put another way, is it worth your time, effort and money to create this business? Several different professionals may contribute to the study, such as an accountant, entrepreneurs who have opened successful businesses, and Realtors who advise on the worth of the location and pricing, comparing similar businesses in the area.

A business plan details how the business will operate. It assumes your feasibility study has been completed and it was determined the idea is viable. Now you're going to spell out your financial and other objectives, the methods you plan to use to achieve them, and your proposed organizational structure.

Consider the Similarities

Comparing the similarities between feasibility study and business plan is important because both are used in different ways to help you create a profitable business. Similarities between the two documents include:

• Timing : Both are initially done before the business opens, and can be conducted again later to determine the next steps on future ideas.
• Input : Both include input from several individuals or departments that have different skills. 
• Format : Both include other documents that are pulled together in order to compose the report.
• Components : Some of the issues analyzed are similar, including examining the target market, market conditions and financial costs.
• Usage : Both help the organization's management make decisions, and can also be shown to potential investors.

Understand the Differences

It's equally important to understand the difference between feasibility study and business plan . They are not the same, and one cannot substitute for the other. Differences include:

• Purpose : Feasibility studies determine whether to go ahead with the business or with another idea, whereas business plans are designed after the decision to go ahead has already been made.
• Methodology : Essentially, feasibility studies are research projects, whereas business plans are projections for the future.
• Risks : Feasibility studies determine the risks associated with the idea, whereas business plans explain how management will deal with the risks so that it will make a profit.
• Cost : Feasibility studies can require hiring outside professionals with expertise who will conduct thorough studies, whereas business plans are written by employees of the business, as part of their jobs.

Conducting a Feasibility Study

If you're doing the feasibility study yourself, conduct a complete competitive analysis considering the following:

• Product demand:  Is there a need or want for your product or service? Is the need already being met, or is there room for another product?
• Market conditions :  Who would buy your product and where are they?  Can you serve their location? Is the market saturated, or is there room/need for more products?
• Pricing:  What do current users pay for similar products? What do you need to charge so that you will be profitable, and will consumers pay your price?
• Risks : What are the risks associated with your idea?
• Probability of Success : Can you reasonably overcome the risks to become profitable?

Writing a Business Plan

Writing a business plan may seem daunting, but if you take it step-by-step, it will come to fruition. The Small Business Administration advises that business plans should include the following:

• Executive Summary : Include your mission statement, products and or services, some brief information about your leadership team and key employees, as well as the location of your business. To attract investors, add current financial information and projections for growth.
• Company description : Detail the problems your business solves; its target market; its competitive advantages, compared with the competition, and anything else that makes your company superior to others: i.e.,  product awards or recognition, big increases in sales, and so on.
• Market analysis : Perform competitive research of what other businesses are doing; their strengths and weaknesses, and how and why your business will be competitive and successful in the market.
• Organization or management: State the  legal status of your business, such as a corporation or partnership, and include an organizational chart showing management levels, departments, and so on.
• Service or product line : State what you will sell or provide and describe the benefits of each. Explain any research done, and any patents filed, and so on. 
• Marketing and sales : Explain in detail your marketing strategy and how sales will be made.
• Funding request : If necessary, detail the amount of funding you’ll need for the next five years - specifically,  what you’ll do with the funds, and the terms you’re asking for.
• Financial projections : This is the business’s financial outlook for the next five years. Include current financial statements, if the business is in operation.
• Appendix : This includes supporting documents or requested materials, such as resumes, product photos, letters of reference, patents, licenses and so on.
• MBN: Market Business News: What is a Feasibility Study? Definition and Examples
• Cleverism: How to Conduct a Feasibility Study the Right Way
• Entrepreneur: 7 Steps to a Perfectly Written Business Plan
• SBA: Write Your Business Plan

Barbara Bean-Mellinger is a freelance writer who lives in the Washington, D.C. area. She has written on business topics for bizfluent.com, afkinsider.com, Harbor Style Magazine, the Charlotte Sun and more. Barbara holds a B.S. from the University of Pittsburgh and has won numerous awards in B2B and B2C marketing.

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The difference between a feasibility study & a business plan

How much wood would a woodchuck chuck if a woodchuck could chuck wood? How much would the wood cost and how dependable is supply? Does the wood have a “best by” date? How long would it take to do the chucking? And what about woodchuck retention, it is a tough market out there.

If there are wood chucking businesses (and we do have a client that clears and hauls felled trees and wood debris), they might want to consider a feasibility study and business plan before diving into an expansion or other major project. Feasibility studies and business plans are commonly needed (or required) for analysis and decision purposes such as the launch of a new business line, product or service line expansions, geographic expansion, or attracting capital. Likewise, target readers range from boards of directors for project approval purposes, management for internal planning, lenders or potential investors, grant or other assistance programs, and a number of others. 

But what are the differences between a feasibility study and a business plan, and how do the two relate? A business feasibility study is a detailed analysis of the viability of an idea or concept for a business venture. Once feasibility has been determined, a business plan documents the operational and financial objectives of the venture and the detailed plans to achieve them. In short, a business feasibility study can be looked at as “Can we?” while the business plan is “How to.” 

It is common for the “can we?” and “how to” assessments of a project to be combined into one document, but many key aspects of feasibility should be determined before diving too deep into the “how to” of a venture.

Some years ago we did a feasibility study for a large California dairy operation seeking to grow returns by introducing value-added products rather than strictly selling bulk fluid milk. The idea? Homogenize and pasteurize their own milk (some in flavors), put it in glass bottles, and deliver it to people’s doorsteps. 

After I got over my shock, we set about exploring key aspects of feasibility: Is there demand for it, and at what price points? What would it take for the company to successfully make and bottle the products? How would it be marketed? Can bottles be returned and sanitized sufficiently for safe re-use?

As you might imagine, there was not much industry data to lean on; Nielsen and IRI have no market data for home delivered milk, there are no trade associations for the home milk delivery business, and not a lot of equipment and bottle suppliers focus on that niche of the otherwise huge dairy industry.

It was a challenge. We designed a market survey and partnered with the marketing program of a local community college to take consumer surveys at farmers’ markets and other events to determine potential market interest and price points. We contacted some of the few similar operations we could find in the United States. We looked into the availability of bottles approved for both milk and multiple re-use. 

Ultimately, we found the project feasible, and with this assurance developed a business plan to lay out the “how to-s.” In the years since, the company has been a great success with stunning growth.

Tempting as it may be to dive straight into the “how to,” unless you have other supportable reasons to believe a project is feasible from such key aspects as demand, production, distribution, marketing, capital, and a thorough risk assessment, it is best to spend some time determining “Can we?”

I tell our business feasibility study clients that one result they should be prepared for is “not feasible.” It happens, but it’s still a lot less trouble and risky than jumping in without due diligence. Morrison has conducted feasibility studies and business plans for nearly 20 years for a wide variety of needs and intended readers. We’re always happy to bounce around ideas and help explore what might – or might not – work for a business’s needs.

Brent Morrison is the Founding Principal at Morrison. To get in touch with Brent, please find contact information for Morrison here .

We’ve worked with a wide variety of clients on a broad range of projects and are happy to discuss solutions that can best fit your needs.

Difference Between a Feasibility Study Report and a Business Plan

By: Author Tony Martins Ajaero

Home » Starting a Business » Conduct Feasibility Study

Is a feasibility report the same as a business plan? What’s the difference between a feasibility study report and a business plan? Can a feasibility report be converted to a small business plan?

One of the ways to ensure that you start your business on a promising note is to make sure you have a workable business plan and you also have a comprehensive feasibility study report. With that in place, you will be able to predict how the business will perform in one, two, three years, and beyond.

In this article, we will look at the difference between a feasibility study report and a business plan. We will also look at how you can use these business documents to your advantage if you plan to start a business or if you want to scale up your business.

What is a Feasibility Study Report?

A feasibility report is a report that assesses a group of potential project pathways or solutions to see if they are viable. The person who writes a feasibility report assesses the feasibility of several ideas and then makes a suggestion for the best alternative.

Companies frequently face difficulties that can be solved using a variety of approaches, and it is critical that they select the optimal one. A feasibility report can assist you in evaluating the viability of several options in order to select the best one. If your organization wants to determine the best path for a project or solution to an issue, knowing how to write a feasibility report can help.

What is a Business Plan?

A business plan is an outline of the strategy of a business that outlines its goals and plans for accomplishing them. It includes a go-to-market strategy, financial estimates, market research, a corporate purpose, and a mission statement. Schedule and key personnel accountable for completing the goals may also be mentioned in the business plan.

A business plan serves three functions: It summarizes the organization’s strategy in order to execute it over time, attracts funding from investors, and assists in forecasting future business demands.

Please keep in mind that there is no one-size-fits-all business plan because there are so many different enterprises on the market today. Every organization, from startups with just one founder to historic household names, requires a business plan.

What are the Differences Between a Feasibility Study Report and a Business Plan?

1.  A feasibility study is carried out with the aim of finding out the workability and profitability of a business venture. Before anything is invested in a new business venture, a feasibility study is carried out to know if the business venture is worth the time, effort and resources.

On the other hand, a business plan is developed only after it has been established that a business opportunity exist and the venture is about to commence. This simply means that a business plan is prepared after a feasibility study has been conducted.

2.  A feasibility report is filled with calculations, analysis and estimated projections of a business opportunity. While a business plan is made up of mostly tactics and strategies to be implemented in other to start and grow the business.

3.  A feasibility study is all about business idea viability while a business plan deals with business growth plan and sustainability.

4.  A feasibility study report reveals the profit potential of a business idea or opportunity to the entrepreneur, while a business plan helps the entrepreneur raise the needed startup  capital from investors.

5. A feasibility study report is used to determine the sustainability of a company idea or project before launching it, whereas a business plan is used to explain the strategy and operations of an existing or new business.

6. A feasibility study report focuses on one aspect of a business idea or project, such as market analysis, technical feasibility, financial feasibility, or organizational feasibility, whereas a business plan covers a broader range of topics, such as market research, marketing strategy, operations plan, financial projections, and management structure.

7. A feasibility study report is normally written for internal use by the business owner, stakeholders, or investors to assess the possible risks and rewards of a business idea or project, whereas a business plan is typically prepared for external use in order to attract finance, partners, or customers.

8. A feasibility study report may be more informal and structured as a report or presentation, whereas a business plan is often more formal and structured as a written document with a defined format.

9. A feasibility study report is normally produced before a business plan and may take less time to complete, but a business plan is an ongoing document that is updated on a regular basis to reflect changes in the business environment.

It’s also worthwhile to know that a feasibility report can readily be converted to a business plan. To achieve this, all you need to do is incorporate your business strategies and tactics into the feasibility report; and you are good to go.

In conclusion,

Paying attention to these two key business documents (Feasibility Study Report and Business Plan) is what is expected of every entrepreneur or investor who truly wants to become successful with their business.

As a matter of fact, we usually advise entrepreneurs to hire business consultants who are specialized in writing Feasibility Studies and Business Plans to help them prepare a workable document (Feasibility Study Report and Business Plan). With that, you can be assured that your business will be starting on the right footing.

Related Posts:

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• 5 Conditions That Makes a Business Opportunity Feasible
• A Sample Template for Conducting Business Risk Assessment
• 10 Ways Socio–Cultural Factors Affect Business

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How to conduct a feasibility study: Templates and examples

Conducting a feasibility study is an important step in successful project management. By evaluating the viability of a proposed project, a feasibility study helps you identify potential challenges and opportunities, ensuring you make informed decisions. In this guide, we’ll walk you through how to conduct a feasibility study with practical templates and real-world examples, designed for project managers seeking to optimize their project planning process.

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 hand, 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? 

Benefits of conducting a feasibility study

There are several key benefits to conducting a feasibility study before launching a new project:

Confirms market opportunities and the target market before investing significant resources

Identifies potential issues and risks early on

Provides in-depth data for better decision making on the proposed project's viability

Creates documentation on expected costs and benefits, including financial analysis

Obtains stakeholder buy-in by demonstrating due diligence

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 assessment. 

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 analysis?

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 disadvantages of your proposed initiative

Provide more information before making a go-or-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 analysis 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'll run a feasibility study to confirm that the project is possible with the tools and resources you have at your disposal. 

Types of feasibility studies

There are five main types of feasibility studies: technical feasibility, financial feasibility, market feasibility (or market fit), operational feasibility, and legal feasibility. Most comprehensive feasibility studies will include an assessment of all five of these areas.

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) and 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, a 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. 

Legal feasibility

A legal feasibility analysis assesses whether the proposed project complies with all relevant legal requirements and regulations. This includes examining legal and regulatory barriers, necessary permits, licenses, or certifications, potential legal liabilities or risks, and intellectual property considerations. The legal feasibility study ensures that the project can be completed without running afoul of any laws or incurring undue legal exposure for the organization.

Feasibility assessment 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. 

The essential elements of a feasibility study are: 

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 evaluates 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 the market by a certain date but won’t be available for several months after that, 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 go. 

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.

Feasibility study examples

To better understand the concepts behind feasibility assessments, here are two hypothetical examples demonstrating how these studies can be applied in real-world scenarios.

Example 1: New product development

A consumer goods company is considering launching a new product line. Before investing in new product development, they conduct a feasibility study to assess the proposed project.

The feasibility study includes:

Market research to gauge consumer interest, assess competitor offerings, and estimate potential market share for the target market.

Technological considerations, including R&D requirements, production processes, and any necessary patents or certifications.

In-depth financial analysis projects sales volumes, revenue, costs, and profitability over a multi-year period.

Evaluation of organizational readiness, including the skills of the current management team and staff to bring the new product to market.

Assessment of legal feasibility to ensure compliance with regulations and identify any potential liability issues.

The comprehensive feasibility study identifies a promising market opportunity for the new business venture. The company decides to proceed with the new project, using the feasibility report as a template for their business development process. The study helps secure funding from key decision-makers, setting this start-up product initiative up for success.

Example 2: Real estate development deal

A property developer is evaluating the feasibility of purchasing land for a new residential community. They commission a feasibility study to determine the viability of this real estate development project.

The feasibility assessment covers:

Detailed analysis of the local housing market, including demand drivers, comparable properties, pricing, and absorption rates.

Site planning to assess the property's capacity, constraints, and technological considerations.

In-depth review of legal feasibility, including zoning, permitting, environmental regulations, and other potential legal hurdles.

Financial analysis modeling various development scenarios and estimating returns on investment.

Creation of an opening day balance sheet projecting the assets, liabilities, and equity for the proposed project.

Sensitivity analysis to evaluate the impact of changes in key assumptions on the project's scope and profitability.

The feasibility study concludes that while the real estate start-up is viable, it carries significant risk. Based on these findings, the developer makes an informed decision to move forward, but with a revised project's scope and a phased approach to mitigate risk. The comprehensive feasibility analysis proves critical in guiding this major investment decision.

Which phase of the project management process involves feasibility studies?

Feasibility studies are a key part of the project initiation and planning phases. They are typically conducted after a project has been conceptualized but before significant resources are invested in detailed planning and execution.

The purpose of a feasibility assessment is to objectively evaluate the viability of a proposed project, considering factors such as technical feasibility, market demand, financial costs and benefits, legal requirements, and organizational readiness. By thoroughly assessing these aspects, a feasibility study helps project stakeholders make an informed go-or-no-go decision.

While feasibility studies are a critical tool in the early stages of project management, they differ from other planning documents like project charters, business cases, and business plans. Here's a closer look at these key differences:

Feasibility study vs. project charter

A project charter is a relatively informal document to pitch your project to stakeholders. Think of the charter as an elevator pitch for your project objectives, scope, and responsibilities. Typically, your project sponsor or executive stakeholders review 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 involve more senior stakeholders. 

After your business case is approved by relevant stakeholders, you'll 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 outlining 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.

Achieve project success with Asana

Are you done with your feasibility study? You’re ready to run a project! Set your project up for success by tracking your progress with 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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• What is the difference between a feasibility study and a business plan?

Navigating the dynamic business world requires a high degree of strategic acumen and meticulous preparation, especially for senior management roles. In this article, we'll delve into two paramount tools that can significantly assist in this journey: business plans and feasibility studies.

Both tools are used extensively by seasoned professionals such as senior finance managers, real estate development managers, asset managers, and procurement managers. Yet, the relationship and differentiation between business plans and feasibility studies often confuse. Through this article, we'll demystify these concepts and reveal how business plan and feasibility study consultants can be crucial in bolstering your strategic decision-making.

Unravelling the relationship

Business plans and feasibility studies are interconnected yet serve different purposes. A business plan outlines your organisation's direction, detailing the approach to achieving set goals, while a feasibility study analyses the viability of a specific business venture before it's initiated.

Consider a corporation contemplating a shift to solar power. They begin with a feasibility study, engaging a consultant to evaluate factors like sunlight availability, installation costs, regulatory environment, and potential impact on their market position. If this study finds that the location isn't sunny enough, costs are too high, or infrastructure is unsuitable, the idea is scrapped, saving the corporation from a costly mistake.

However, if the feasibility study deems the transition viable, the corporation proceeds to the business plan stage. They hire a business plan consultant to outline a detailed strategy, covering aspects such as budgeting, sourcing, installation timelines, risk mitigation, and communication plans.

Dissecting the differences

While both a business plan and a feasibility study are crucial, they're not interchangeable. A feasibility study asks, "Should we do this?" while a business plan asks, "How will we do this?"

To explain better, let's consider a scenario involving a restaurant. If a restaurateur is considering opening a new branch in a different city, they would first conduct a feasibility study. They'd assess the local market demand, competition, demographics, potential locations, costs, and projected revenue. If the study finds that the new branch wouldn't be profitable or sustainable, they would shelve the idea. However, if the feasibility study reveals that the new branch is likely to be successful, they'd proceed to create a business plan. This would detail how they intend to launch and run the new branch, such as the restaurant's concept, target customers, marketing strategies, menu, pricing, staffing, and financial projections.

In essence, the feasibility study is about whether they should open the restaurant, and the business plan is about how they will open and operate it, illustrating the key difference between the two tools.

The rationale behind business plans and feasibility studies

Why should your organisation invest time and resources in these tools? Essentially, they provide clarity and confidence in decision-making. A feasibility study examines the practicability of your idea. It determines if the proposed project is worth the risk and investment. It's akin to a 'litmus test', helping you avoid costly missteps.

On the other hand, a business plan provides a detailed roadmap for your business. It lays out your business's objectives and strategies, management and operational structure, and financial projections. It facilitates internal understanding and commitment and helps attract external investors when well-executed.

The role of consultants

Given the complexity and the high stakes involved, many organisations engage business plan consultants and feasibility study consultants. These experts bring an external perspective, help avoid internal biases, and contribute specialist knowledge and methodologies.

Feasibility study consultants conduct comprehensive market research, cost analyses, and risk assessments. They help determine if your proposed project is both profitable and achievable. On the other hand, business plan consultants assist in crafting compelling business plans that communicate your vision effectively. They analyse your business's strengths, weaknesses, opportunities, and threats (SWOT) and devise strategies that align with your objectives and capabilities.

Final thoughts

For senior management, these tools offer invaluable assistance. A robust feasibility study allows managers to make informed go/no-go decisions. It facilitates risk management and helps align the team around a shared understanding of the project's potential. Business plans, meanwhile, provide a clear vision and direction for the organisation. They assist managers in tracking progress, managing changes, and communicating with stakeholders. They're essential for steering the corporate ship in an often turbulent business sea.

In conclusion, business plans and feasibility studies, assisted by professional consultants, play an instrumental role in shaping and executing your business strategy. They underpin decision-making, mitigate risks, and maximise potential returns. Whether you're evaluating a new project or charting your organisation's path, consider investing in a well-crafted feasibility study and a comprehensive business plan - the rewards can be immense.

Related Services: Feasibility Study , Business Plan , Strategic Advisory

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The Difference Between A Feasibility Study And A Business Plan

Should you prepare a feasibility study report or a business plan? This is a question that is always asked by thousands of people daily. They want to prepare either of the two but classify both as the same without understanding the clear distinction between a feasibility study report and a business plan.

Feasibility study reports and business plans have different goals, although similar. One is more in-depth than the other, and the reasons for preparing each is partly different from the other.

While a feasibility study report and a business plan are both analysis and decision making tools, it is highly important to know the difference between a feasibility study report and a business plan at all times, as I have detailed below:

See Also:   The Difference Between A Business Plan And A Business Proposal

Reasons For A Feasibility Study Report

A feasibility study report is a document that is prepared after a feasibility study has been carried out. It contains in-depth analysis, projections, cost estimates, production requirements, production processes, and is the ultimate tool to determine whether a business should be started or not.

Since the feasibility study that’s first carried out is a comprehensive market research, its results will show the market size, their demographics, genders, age brackets, number of businesses operating in the industry, and much more.

These results are then put together in the report along with their cost projections, and will ultimately show whether the business is worth following through or not.

Feasibility Study Report Structure

A sample feasibility study report structure could look like the list below:

• Introduction
• Product or Service
• Market Environment
• Competition
• Business Model
• Market and Sales Strategy
• Production Operations Requirements
• Management and Personnel Requirements
• Regulations and Environmental Issues
• Critical Risk Factors
• Financial Projections

See Also:   How To Write A Feasibility Study Report In Nigeria Or Africa: The Complete Guide

Reasons For A Business Plan

A business plan is a strategy and tactical document that is prepared after a successful feasibility study has been carried out. It is written based on the results of a feasibility study, and focuses instead on how the business can achieve a successful market penetration and growth.

A business plan also contains financial projections, cash flow statements, balance sheets, profit and loss statements, break even analysis, and much more. It shows how profitable or not the business will be after acting on the results gotten from the feasibility study, and what it can do to either grow its revenues or change its focus to another industry.

Business Plan Structure

A sample business plan structure could look like the list below:

• Executive Summary
• Business Description
• Service or Product Line
• Market Analysis & Strategies
• Organization & Management
• Funding Request

See Also:   How To Write A Business Plan: The Complete Guide

What Then Do You Need?

If you know nothing about the business you intend to start, the first step is to prepare a feasibility study report after an extensive market research has been carried out. After which, you can go on to prepare a business plan, so you can show the growth, sustainability, and profit potential of the business you’ve set out to run.

See Also:   How to Choose A Business Plan Consultant

What are your thoughts on the difference between a feasibility study report and a business plan? Let me know by leaving a comment below.

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How to start a lucrative ketchup production business in nigeria and africa: the complete guide, how to start a lucrative salt production business in nigeria and africa: the complete guide, 20 comments.

Until now,I always think that business plan and feasibility study report are the same. Thank you a million times for pointing out the difference to me. An eye opener I may say.Thanks once again.

Imeh Enuah.

I’m glad you found the article valuable, Imeh.

Do have a great time!

Thank you brother ❤️👍

Thanks for the effort but still not crystal clear to me…

Thank you for the comment, Victor.

Indeed they’re similar. But the simplest way to understand it is that “a feasibility study is first carried out and documented in a report before a business plan is written to show how you can execute your plans to take the market”.

Stan, even though we don’t go writing you for those your valuable articles, which are changing a lot of lives for good, mullions of people are there silently waiting to read your article everyday. Thanks for impacting knowledge and sharing those priceless write-ups.

Thank you for the kind words and for being a reader, Elvis.

Stan, this has cleared my inquisition on the differentiating factor between the two.

I’m glad you found the article valuable, Daniel.

Thank you for the comment.

Thanks a lot for the article. My position as a Consulting Executive in my previous employment taught me that in industry every feasibility studies is accompanied by a business plan all in one report.

Business plans usually standalone for only existing businesses which usually requires such things as a new marketing or market research, cashflow analysis and asset reappraisal.

Thank you for the contribution, Jeremiah.

Indeed a detailed feasibility report is an in-depth business plan.

What is the difference between a marketing plan and bussines plan

We’d still post an article about that.

Do look out for it on the blog.

Thank you for asking.

Very insightful to say the least. Well done sir!

Thank you for the kind words, Tobechi.

Indeed you are doing a great job.i feel so blessed and fortunate to have such unquontifiable opportunity of learning daily,God bless you, thanks.

Thank you for the kind words, Gideon.

Hello, I wanto prepare a feasibility study report for a potential investor I have a meeting with in another 2 weeks. How do I reach you and where do we start from?

Stan, this is lovely I think I have a better conclusion n knowledge. God bless you.

Thank you for reading, Obi.

Comments are closed.

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What is the difference between feasibility study and business plan?

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Share article, table of contents hide, what is a feasibility study, what is a business plan, the key differences between a feasibility study and a business, when to use a feasibility study vs. a business plan, how to create a feasibility study, how to create a business plan, what are the types of feasibility studies, what are the types of business plans.

A feasibility study is an analysis of whether a business idea is practical and viable , while a business plan outlines the strategy and operations of a business in detail. Essentially, a feasibility study is a precursor to a business plan, helping to determine whether the business idea is worth pursuing before investing time and resources into developing a full plan.

(Photo by Firmbee.com on Unsplash )

A feasibility study is an analysis of the viability of an idea, proposal, or concept. It assesses the likelihood that a project will be successful in meeting its objectives and goals, and whether it is worth pursuing.

A feasibility study is not the same as a business plan. A business plan is a document that outlines the financial and operational goals of a business. It includes information on the company’s products or services, marketing strategy, and target market.

A feasibility study looks at all aspects of a proposed project, including technical feasibility, financial feasibility, and operational feasibility. It is used to determine whether a project is worth pursuing and to identify any potential risks or limitations.

Technical feasibility looks at whether a proposed project can be completed with the available resources. This includes evaluating the technical requirements, such as hardware and software requirements, and assessing whether these can be met. Financial feasibility looks at whether a proposed project is financially viable. This includes assessing the costs and benefits of the project, as well as any potential sources of funding. Operational feasibility looks at whether a proposed project can be completed successfully within the given constraints. This includes evaluating the resources required for the project and assessing whether they are available.

The goal of a feasibility study is to identify any potential problems with a proposed project so that they can be addressed before moving forward. By doing this, it increases the chances of success for the project overall.

(Photo by Jason Goodman on Unsplash )

A business plan is a comprehensive document that outlines the strategy, operations, and financial projections for a business. It typically includes information on the company’s products or services, target market, competition, marketing and sales strategies, management team, and financial projections.

A well-written business plan is an important tool for entrepreneurs and business owners, as it provides a roadmap for the future of the business and helps to secure funding from investors or lenders. It allows the business owner to clearly articulate their vision and goals, and to identify potential challenges and opportunities.

The key components of a business plan typically include an executive summary , company description, market analysis, marketing and sales strategy, management and organization, product or service line, financial projections, and funding request.

The executive summary provides an overview of the business plan, highlighting the key points and objectives. The company description provides background information on the business, including its history , mission, and goals. The market analysis outlines the target market, competition, and industry trends. The marketing and sales strategy describes how the business will reach and engage customers. The management and organization section details the management team and organizational structure of the business. The product or service line outlines the products or services the business will offer. The financial projections include income statements, balance sheets, and cash flow statements. Finally, the funding request outlines the amount of funding needed and how it will be used.

Overall, a business plan is a critical document for any business, providing a roadmap for success and a way to attract funding and support from investors and lenders.

Purpose: A feasibility study is conducted to determine whether a business idea is practical and viable, while a business plan is developed to outline the strategy, operations, and financial projections for a business.

Scope : A feasibility study is a preliminary analysis that focuses on the market, technical, and financial feasibility of a business idea, while a business plan is a comprehensive document that covers all aspects of a business, including its products or services, target market, competition, marketing and sales strategies, management team, and financial projections.

Timing : A feasibility study is typically conducted before developing a business plan to determine whether the business idea is worth pursuing, while a business plan is developed once the decision to proceed with the business has been made.

Audience : A feasibility study is primarily used to inform the entrepreneur or management team about the viability of the business idea, while a business plan is used to secure funding from investors or lenders.

Level of detail : A feasibility study provides a high-level analysis of the business idea, while a business plan provides a detailed roadmap for the future of the business, including its marketing and sales strategies, management team, and financial projections.

A feasibility study is typically used when starting a new business or venture, and its purpose is to determine if the proposed business idea is viable. A feasibility study will assess the market potential, technical feasibility, and financial viability of the proposed business. It is important to note that a feasibility study is not the same as a business plan; rather, it is one tool that can be used in developing a business plan.

In contrast, a business plan is typically used once a business has already been established. Its purpose is to outline the company’s strategy for achieving its goals and objectives. Unlike a feasibility study, which assesses the viability of a proposed idea, a business plan focuses on an existing businesses’ ability to execute its strategy and achieve its goals.

A feasibility study is an analysis of whether a proposed project is likely to be successful. A business plan is a more detailed document that outlines the specifics of the business, such as its products or services, marketing strategy, and financial projections.

Creating a feasibility study typically requires four main steps:

• Define the problem or opportunity. This step includes understanding the needs of the potential customer or client.
• Research and gather data. This step includes secondary research, such as market analysis and industry trends, as well as primary research, such as customer surveys or interviews.
• Analyze the data and make recommendations. This step includes determining whether the problem or opportunity can be solved and whether the proposed project is likely to be successful.
• Prepare a written report . This step includes documenting the findings of the feasibility study in a clear and concise manner.

Creating a business plan can seem like a daunting task, but it doesn’t have to be. You can start by doing some research and then outlining your goals and objectives. Once you have a good understanding of what you want to achieve, you can start putting together a more detailed plan.

There are a few key things that should be included in any business plan:

• An executive summary. This is a brief overview of your business and what you hope to accomplish.
• A description of your product or service. What are you offering and why do your customers need it?
• A marketing plan. How will you reach your target market and what strategies will you use to promote your product or service?
• A financial plan. What are your revenue and expense projections? How much money do you need to get started or to keep your business running?
• An operational plan. What are the day-to-day details of running your business? Who will handle what tasks?
• A risk management plan. What could go wrong and how will you handle it if it does?

Market Feasibility

A market feasibility study assesses the potential for a product or service to be successful in a given market. It takes into account multiple factors such as the size of the target market, growth trends, competitor analysis, and customer needs and buying habits. This type of feasibility study is important for businesses to understand whether there is a demand for their product or service in the marketplace.

Technical Feasibility

A technical feasibility study assesses the ability of a business to successfully develop and implement a proposed solution. This includes assessing the technical risks involved, as well as ensuring that the necessary resources (e.g., personnel, equipment) are available. A technical feasibility study is important to determine whether a proposed solution is achievable and will meet the needs of the business.

Financial Feasibility

A financial feasibility study assesses the potential financial impact of a proposed solution. This includes an assessment of the costs and benefits of implementing the solution, as well as any potential risks and uncertainties associated with it. A financial feasibility study is important to determine whether a proposed solution is financially viable and will have a positive impact on the business’s bottom line.

Managerial Feasibility

A managerial feasibility study assesses the ability of management to successfully develop and implement a proposed solution. This includes an assessment of management’s experience, skills,

There are three types of business plans :

Internal business plan

An internal business plan is a document that outlines the company’s strategy for achieving its objectives. It is typically created by the company’s management team and is not shared with outsiders.

External business plan

An external business plan is a document that is shared with outsiders, such as investors, potential partners, and customers. Its purpose is to persuasively communicate the company’s strategy and how it will achieve its objectives.

Hybrid business plan

A hybrid business plan combines elements of both an internal and an external business plan. It typically includes a high-level overview of the company’s strategy that can be shared with outsiders, as well as more detailed information on operational matters that is meant for internal use only.

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What Is a Feasibility Study?

Understanding a feasibility study, how to conduct a feasibility study, the bottom line.

• Business Essentials

Feasibility Study

Yarilet Perez is an experienced multimedia journalist and fact-checker with a Master of Science in Journalism. She has worked in multiple cities covering breaking news, politics, education, and more. Her expertise is in personal finance and investing, and real estate.

A feasibility study is a detailed analysis that considers all of the critical aspects of a proposed project in order to determine the likelihood of it succeeding.

Success in business may be defined primarily by return on investment , meaning that the project will generate enough profit to justify the investment. However, many other important factors may be identified on the plus or minus side, such as community reaction and environmental impact.

Although feasibility studies can help project managers determine the risk and return of pursuing a plan of action, several steps should be considered before moving forward.

Key Takeaways

• A company may conduct a feasibility study when it’s considering launching a new business, adding a new product line, or acquiring a rival.
• A feasibility study assesses the potential for success of the proposed plan or project by defining its expected costs and projected benefits in detail.
• It’s a good idea to have a contingency plan on hand in case the original project is found to be infeasible.

Lara Antal / Investopedia

A feasibility study is an assessment of the practicality of a proposed plan or project. A feasibility study analyzes the viability of a project to determine whether the project or venture is likely to succeed. The study is also designed to identify potential issues and problems that could arise while pursuing the project.

As part of the feasibility study, project managers must determine whether they have enough of the right people, financial resources, and technology. The study must also determine the return on investment, whether this is measured as a financial gain or a benefit to society, the latter in the case of a nonprofit project.

The feasibility study might include a cash flow analysis, measuring the level of cash generated from revenue vs. the project’s operating costs . A risk assessment must also be completed to determine whether the return is enough to offset the risk of undergoing the venture.

When doing a feasibility study, it’s always good to have a contingency plan that is ready to test as a viable alternative if the first plan fails.

Benefits of a Feasibility Study

There are several benefits to feasibility studies, including helping project managers discern the pros and cons of undertaking a project before investing a significant amount of time and capital into it.

Feasibility studies can also provide a company’s management team with crucial information that could prevent them from entering into a risky business venture.

Such studies help companies determine how they will grow. They will know more about how they will operate, what the potential obstacles are, who the competition is, and what the market is.

Feasibility studies also help convince investors and bankers that investing in a particular project or business is a wise choice.

The exact format of a feasibility study will depend on the type of organization that requires it. However, the same factors will be involved even if their weighting varies.

Preliminary Analysis

Although each project can have unique goals and needs, there are some best practices for conducting any feasibility study:

• Conduct a preliminary analysis, which involves getting feedback about the new concept from the appropriate stakeholders.
• Analyze and ask questions about the data obtained in the early phase of the study to make sure that it’s solid.
• Conduct a market survey or market research to identify the market demand and opportunity for pursuing the project or business.
• Write an organizational, operational, or business plan, including identifying the amount of labor needed, at what cost, and for how long.
• Prepare a projected income statement, which includes revenue, operating costs, and profit .
• Prepare an opening day balance sheet .
• Identify obstacles and any potential vulnerabilities, as well as how to deal with them.
• Make an initial “go” or “no-go” decision about moving ahead with the plan.

Suggested Components

Once the initial due diligence has been completed, the real work begins. Components that are typically found in a feasibility study include the following:

• Executive summary : Formulate a narrative describing details of the project, product, service, plan, or business.
• Technological considerations : Ask what will it take. Do you have it? If not, can you get it? What will it cost?
• Existing marketplace : Examine the local and broader markets for the product, service, plan, or business.
• Marketing strategy : Describe it in detail.
• Required staffing : What are the human capital needs for this project? Draw up an organizational chart.
• Schedule and timeline : Include significant interim markers for the project’s completion date.
• Project financials
• Findings and recommendations : Break down into subsets of technology, marketing, organization, and financials.

Examples of a Feasibility Study

Below are two examples of a feasibility study. The first involves expansion plans for a university. The second is a real-world example conducted by the Washington State Department of Transportation with private contributions from Microsoft Inc.

A University Science Building

Officials at a university were concerned that the science building—built in the 1970s—was outdated. Considering the technological and scientific advances of the last 20 years, they wanted to explore the cost and benefits of upgrading and expanding the building. A feasibility study was conducted.

In the preliminary analysis, school officials explored several options, weighing the benefits and costs of expanding and updating the science building. Some school officials had concerns about the project, including the cost and possible community opposition. The new science building would be much larger, and the community board had earlier rejected similar proposals. The feasibility study would need to address these concerns and any potential legal or zoning issues.

The feasibility study also explored the technological needs of the new science facility, the benefits to the students, and the long-term viability of the college. A modernized science facility would expand the school’s scientific research capabilities, improve its curriculum, and attract new students.

Financial projections showed the cost and scope of the project and how the school planned to raise the needed funds, which included issuing a bond to investors and tapping into the school’s endowment . The projections also showed how the expanded facility would allow more students to be enrolled in the science programs, increasing revenue from tuition and fees.

The feasibility study demonstrated that the project was viable, paving the way to enacting the modernization and expansion plans of the science building.

Without conducting a feasibility study, the school administrators would never have known whether its expansion plans were viable.

A High-Speed Rail Project

The Washington State Department of Transportation decided to conduct a feasibility study on a proposal to construct a high-speed rail that would connect Vancouver, British Columbia, Seattle, Washington, and Portland, Oregon. The goal was to create an environmentally responsible transportation system to enhance the competitiveness and future prosperity of the Pacific Northwest.

The preliminary analysis outlined a governance framework for future decision making. The study involved researching the most effective governance framework by interviewing experts and stakeholders, reviewing governance structures, and learning from existing high-speed rail projects in North America. As a result, governing and coordinating entities were developed to oversee and follow the project if it was approved by the state legislature.

A strategic engagement plan involved an equitable approach with the public, elected officials, federal agencies, business leaders, advocacy groups, and Indigenous communities. The engagement plan was designed to be flexible, considering the size and scope of the project and how many cities and towns would be involved. A team of the executive committee members was formed and met to discuss strategies, as well as lessons learned from previous projects, and met with experts to create an outreach framework.

The financial component of the feasibility study outlined the strategy for securing the project’s funding, which explored obtaining funds from federal, state, and private investments. The project’s cost was estimated to be $24 billion to $42 billion. The revenue generated from the high-speed rail system was estimated to be $160 million to $250 million.

The report bifurcated the money sources between funding and financing. Funding referred to grants, appropriations from the local or state government, and revenue. Financing referred to bonds issued by the government, loans from financial institutions, and equity investments, which are essentially loans against future revenue that need to be paid back with interest.

The sources for the capital needed were to vary as the project moved forward. In the early stages, most of the funding would come from the government, and as the project developed, funding would come from private contributions and financing measures. Private contributors included Microsoft Inc., which donated more than $570,000 to the project.

The benefits outlined in the feasibility report show that the region would experience enhanced interconnectivity, allowing for better management of the population and increasing regional economic growth by $355 billion. The new transportation system would provide people with access to better jobs and more affordable housing. The high-speed rail system would also relieve congested areas from automobile traffic.

The timeline for the study began in 2016, when an agreement was reached with British Columbia to work together on a new technology corridor that included high-speed rail transportation. The feasibility report was submitted to the Washington State Legislature in December 2020.

What Is the Main Objective of a Feasibility Study?

A feasibility study is designed to help decision makers determine whether or not a proposed project or investment is likely to be successful. It identifies both the known costs and the expected benefits.

In business, “successful” means that the financial return exceeds the cost. In a nonprofit, success may be measured in other ways. A project’s benefit to the community it serves may be worth the cost.

What Are the Steps in a Feasibility Study?

A feasibility study starts with a preliminary analysis. Stakeholders are interviewed, market research is conducted, and a business plan is prepared. All of this information is analyzed to make an initial “go” or “no-go” decision.

If it’s a go, the real study can begin. This includes listing the technological considerations, studying the marketplace, describing the marketing strategy, and outlining the necessary human capital, project schedule, and financing requirements.

Who Conducts a Feasibility Study?

A feasibility study may be conducted by a team of the organization’s senior managers. If they lack the expertise or time to do the work internally, it may be outsourced to a consultant.

What Are the 4 Types of Feasibility?

The study considers the feasibility of four aspects of a project:

Technical : A list of the hardware and software needed, and the skilled labor required to make them work

Financial : An estimate of the cost of the overall project and its expected return

Market : An analysis of the market for the product or service, the industry, competition, consumer demand, sales forecasts, and growth projections

Organizational : An outline of the business structure and the management team that will be needed

Feasibility studies help project managers determine the viability of a project or business venture by identifying the factors that can lead to its success. The study also shows the potential return on investment and any risks to the success of the venture.

A feasibility study contains a detailed analysis of what’s needed to complete the proposed project. The report may include a description of the new product or venture, a market analysis, the technology and labor needed, and the sources of financing and capital. The report will also include financial projections, the likelihood of success, and ultimately, a “go” or “no-go” decision.

Washington State Department of Transportation. “ Ultra-High-Speed Rail Study .”

Washington State Department of Transportation. “ Cascadia Ultra High Speed Ground Transportation: Framework for the Future .”

Washington State Department of Transportation. “ Ultra-High-Speed Rail Study: Outcomes .”

Washington State Department of Transportation. “ Ultra-High-Speed Ground Transportation Business Case Analysis ,” Page ii (Page 3 of PDF).

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Difference between Feasibility Study and Business Plan

Entrepreneurs face many challenges when creating a new venture.  Although the business plan is one of the most well-known documents, the feasibility study may be just as important.  Before the entrepreneur can seek funding, he or she must demonstrate that the idea is truly a good one.

Rochester.edu explained that a feasibility study, “can be defined as a controlled process for identifying problems and opportunities, determining objectives, describing situations, defining successful outcomes, and assessing the range of costs and benefits associated with several alternatives for solving a problem.”

In order to create a feasibility study, entrepreneurs need to define dimensions of business viability including:  market viability, technical viability, business model viability, management model viability, economic and financial model viability, and exit strategy viability.

A good outline for a feasibility study includes:

• Introduction
• Product or Service
• Market Environment
• Competition
• Business Model
• Market and Sales Strategy
• Production Operations Requirements
• Management and Personnel Requirements
• Regulations and Environmental Issues
• Critical Risk Factors
• Financial Predictions Including:  Balance Sheet, Income Statement, Cash Flow Statement, Break Even Analysis, and Capital Requirements

A feasibility study is not the same thing as a business plan.  The feasibility study would be completed prior to the business plan.  The feasibility study helps determine whether an idea or business is a viable option.  The business plan is developed after the business opportunity is created.  StrategicBusinessTeam.com explained, “A feasibility study is carried out with the aim of finding out the workability and profitability of a business venture. Before anything is invested in a new business venture, a feasibility study is carried out to know if the business venture is worth the time, effort and resources. A feasibility study is filled with calculations, analysis and estimated projections while a business plan is made up of mostly tactics and strategies to be implemented in other to grow the business.”

While it may seem the feasibility study is similar in many ways to the business plan, it is important to keep in mind that the feasibility study is developed prior to the venture.  StrategicBusinessStream pointed out that “a feasibility study can readily be converted to a business plan.”  It’s important to think of the business plan in terms of growth and sustainability and the feasibility study in terms of idea viability.

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What is a feasibility study: step-by-step guide.

Key takeaways

• A feasibility study is an essential analytical tool that evaluates the viability of a proposed project on multiple fronts, such as financials, technical requirements, and market demand.
• Conducted during the project initiation phase, this type of study serves as an early checkpoint to identify potential roadblocks and assess risks.
• Feasibility studies act as the first line of defense against project failure, saving time, money, and resources.

In this article...

What is a feasibility study?

A feasibility study is an analytical tool used to evaluate the practicality of a proposed project or business idea. It assesses various factors such as financial viability, technical requirements, legal constraints, and market demand. The study aims to answer the question “Are the goals of this project realistically attainable?” by examining data, studies, and other relevant information.

A feasibility study is a crucial step to take before diving into any project and is generally performed during the project initiation phase of project management . It helps identify potential roadblocks, assess risks, and estimate resource allocation; skipping this step can lead to project failure, wasted resources, and financial losses.

Feasibility studies represent one of the many intricacies of project planning . Understanding the other requirements of this crucial step can give you a well-rounded view of how to set your project up for success.

Steps to conduct a feasibility study

Successfully executing a project hinges on thorough planning and risk assessment. Following this step-by-step guide for conducting a feasibility study will help you meticulously evaluate the viability of your project from the outset.

Step 1: Conduct preliminary analysis

This is where you take a good, hard look at your project to determine whether it’s worth pursuing. At this stage, you should also decide if a more detailed feasibility study is necessary.

A few key criteria usually come into play during this initial assessment. First, consider a general sense of the market demand for your project, the resources you have at your disposal, and some ballpark figures for initial costs. If it’s difficult to get clear estimates, it may be worthwhile to invest additional time and resources in a more comprehensive feasibility study. If no significant roadblocks pop up in this preliminary analysis, then you have the green light to proceed.

Some project management software includes useful features that can help you efficiently collect and organize all this data. These features can be very helpful in decision-making, especially when you’re looking at multiple variables.

Step 2: Create a projected income statement

This vital component of the feasibility study involves forecasting the income, expenses, and profitability associated with the proposed project. The projected income statement is akin to peering into a financial crystal ball to see how the numbers might align.

There are several approaches you can take to assess a project’s financial impact. Historical data and industry benchmarks, for example, can serve as reliable guides. These projections are important for assessing financial feasibility and making informed decisions.

The significance of these forecasts cannot be overstated — they help stakeholders understand the project’s potential ROI and ultimately make the go/no-go decision for the project.

Step 3: Survey the market

The market survey stage involves rolling up your sleeves to gather valuable data and insights about your target market(s) and audience(s). Think of it as your project’s reconnaissance mission: You’re scouting the terrain to understand what you’re getting into.

To start, you’ll want to learn your customers’ preferences to see if your project will fulfill a need or solve a problem they currently face. For example, a software company’s research might reveal customer demand for a new feature that aligns with the project’s goals.

Also consider if your project is timely and whether it will make a significant impact now or in the near future, depending on emerging market trends. It may be useful to conduct competitor research as well; knowing what and who you’re up against can help stakeholders decide whether you should move forward with the project and, if so, how you will approach it.

Surveys and interviews are ideal for firsthand quantitative and qualitative data. However, don’t underestimate the power of existing market reports. This preexisting data can offer a broad market landscape view, helping you make data-driven decisions. You can also leverage other research and data collection methods, such as focus groups and publicly available databases like Statista and the U.S. Census Bureau .

Step 4: Review and analyze the data

With all of the necessary information in hand, use tools like a SWOT analysis to evaluate the project’s strengths, weaknesses, opportunities, and threats. A risk assessment is another go-to method that can help you identify potential pitfalls that could derail your project.

At this point in the feasibility study, weigh key metrics and indicators like projected ROI, milestone dates, market penetration rates, and possible vulnerabilities. These gauges, when reviewed in tandem, paint a broader picture of your project’s viability and value.

Step 5: Determine the next steps

Use your research-backed analysis to decide whether the project you’ve proposed is the best way to address the problems it intends to address. If the metrics are favorable and the risks are manageable, you should feel confident advancing to the planning phase. Too many red flags, however, may mean you need to go back to the drawing board.

Here’s a little tech tip to make this decision easier: Many project management software dashboards can compile your key metrics and findings neatly in one visual package. It’s like having a project feasibility snapshot right at your fingertips, which makes it much easier for stakeholders to understand important data and make informed decisions.

Types of feasibility studies

There are different types of feasibility studies that each focus on a unique aspect of projects and project planning . By understanding the nuances of each, you’ll become better equipped to make well-informed decisions, mitigate risks, and ultimately steer your project toward success.

Technical feasibility

Technical feasibility digs into the nuts and bolts of the project. You’re looking at what kind of technology you’ll need, whether it’s available, and if it can be integrated into your current systems. It’s like checking if you have all the ingredients you need before cooking a specific recipe.

Economic feasibility

This study is all about the money — how much the project will cost and what kinds of economic or profitability benefits it will bring forth. With an economic feasibility study, you’re most often doing a cost-benefit analysis to see if the financials add up in your favor. It’s like weighing the pros and cons but in dollar signs. 

Legal feasibility

This is your legal checkpoint. You’re looking at any laws or regulations that might create risks or restrict your project. This feasibility study could also involve checking compliance with industry-specific or regional regulations.

Operational feasibility

An operational feasibility study will help you see how the project fits into your current operations and operational goals and resources. After completing this type of study, you should know if your project will require new workflows and if your team can handle project tasks alongside their current workloads.

This study also evaluates whether the organization has the expertise to accomplish all project goals.

Scheduling feasibility

This feasibility study is all about time. You’re considering how long the project will take and whether you can afford any delays. Gantt charts , a feature commonly found in project management software, can be convenient in this type of study.

These visual timelines allow you to map out the entire project schedule, set milestones, and identify potential bottlenecks. You can also easily see if your project’s timeline is realistic or if you need to make adjustments to avoid delays.

Feasibility study examples

Feasibility studies add value to the project lifecycle across diverse industries. With each of these examples, the feasibility study is a critical preliminary step to identify potential roadblocks and assess the likelihood of project success.

Construction

A construction project feasibility study might focus on land evaluation, zoning laws, and material costs to determine if a new housing development is viable. In this example, the study helps avoid legal snags and ensure profitable land use.

A healthcare feasibility study may assess the demand for a new medical facility in a specific location by looking at factors like local population health statistics and existing healthcare infrastructure. This type of research helps determine whether a new facility would serve the community appropriately and utilize resources effectively.

Information technology

An IT feasibility study might analyze the technical requirements, cost, and market demand for a new software application to understand whether the development effort would offer a reasonable return on investment. This information helps project teams avoid sinking time and money into software that no one wants or needs.

Free feasibility study template

Download our feasibility study template for free:

Why are feasibility studies crucial in project management?

In project management, feasibility studies help you gauge whether your project is a go or a no-go, saving you time, money, and a lot of headaches in the long run. But it’s not just about giving your project a thumbs-up or down.

Feasibility studies are also invaluable for decision-making and risk assessment. They provide the data and insights you need to make informed choices. Whether it’s deciding on the project scope, budget, or timeline, these studies offer a comprehensive view of what you’re up against.

Plus, feasibility studies help you identify potential roadblocks and risks, allowing you to prepare effective contingency plans. Operating with a feasibility study as your project’s foundation is like giving your team both a roadmap and a weather forecast to help you better navigate your project journey.

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

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?

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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.

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.

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!

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.

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 its Importance?

This blog talks about how a study that assesses the potential success of a proposed project. Let’s dive in to learn how to conduct this study and comprehend what determines the viability of a project. It will help you understand how the Feasibility Study evaluates the necessity of a project in terms of legal aspects. Read more!

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A Feasibility Study is a crucial assessment that is during Project Management conducted to determine the viability and potential success of a project. By thoroughly examining such factors, stakeholders can make informed decisions regarding the project’s feasibility. Apart from the technical and financial considerations, this study ensures a project’s compliance with relevant laws, regulations and industry standards. To give you a better overview, this blog will talk about the multiple aspects associated with this. So, let’s dive in to comprehend the significance of a Feasibility Study. After reading this blog, stakeholders can make well-informed decisions that enhance the chances of a project’s success.

Table of Contents 

1) Feasibility Study - An overview

2) Importance of a Feasibility Study 

3)  Types of Feasibility Studies

4) What is included in a Feasibility Study report?

5) Examples of a Feasibility Study

6) Seven steps to do a Feasibility Study

7) Conclusion

Feasibility Study - An overview

A Feasibility Study is an initial investigation into the potential benefits and viability of a project or endeavour. An impartial appraisal that looks at a project's technical, financial, legal, and environmental elements is what this study provides.

Importance of a Feasibility Study

A Feasibility Study may reveal novel concepts that fundamentally alter the Scope of a Project . Feasibility Studies are of the greatest importance in the decision-making process when it comes to projects, businesses, and investments. They are mostly structured assessments that are focused on various aspects of a proposed project`s Feasibility. The following are some of its advantages:

a) Increases the focus of project teams 

b) Finds fresh opportunities 

c) Gives important information to help make a "go/no-go" choice. 

d) Reduces the number of available business options 

e) Finds a good cause to start the project

f) Increases the success rate through the assessment of several factors 

g)  Assists in making project decisions 

h) Identifies grounds for not moving forward

Types of Feasibility Studies

Technical Feasibility Study

A technical Feasibility Study aims to verify whether the organisation is eligible to use its technical in-house resources and expertise to perform successfully. This assessment involves scrutinising various aspects, including the following:

a) Production capacity: Does the company have the resource base to produce that number of products and services for the customers? 

b) Facility needs: Will today’s facilities fulfil the standards required, or will new facilities be constructed?

c) Raw materials and supply chain: Are there enough purchases, and have the organisation maintained a supply chain?

d) Regulatory compliance: Does the Project Execution follow the relevant guidelines and professionals bear the relevant certifications to meet the requirements and the industry standards?

Economic Feasibility Study 

It is a financial Feasibility Study that primarily examines the project's financial viability. The economic Feasibility Study typically involves several steps:

a) Determining capital requirements: Calculate funding collection, overhead, and other capital.

b) Cost breakdown: Determining and listing all the project costs including the purchase of materials, hardware, labour, and overheard costs are too.

c) Funding sources: Trying out a variety of possible solutions like banks, stakes, or grants.

d) Revenue projection: By using prediction tools such as a cost-benefit analysis or business forecasting to get the level of income, return on investment and profit margin.

e) Financial analysis: Projecting the performance of the Project based on means that are related to a financial analysis and are characterised by the utilisation of such things as cash flow statements, balance sheets and financial projections.

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Legal Feasibility Study  

Legal Feasibility is a type of analysis that seeks to confirm that a pProject follows all the relevant laws and regulations. Key considerations include: 

a) Regulatory compliance: Briefing the whole project team about all required laws and regulations that the project has to comply with. 

b) Business structure: Assessing the legal systems (e.g., LLCs vs. corporations) that would best protect liability, governance, and minimising taxation, if any. 

Operational Feasibility Study

An operational Feasibility Study looks at how effectively a product will meet its needs. It also talks about how easy it will be to use and maintain once it is in place. In addition, this study enumerates the necessity of evaluating a product's utility and the response and suggestions of  application development team.

Scheduling Feasibility Study

Proposed project schedules and deadlines are the main subject of a scheduling a Feasibility Study. This evaluation concerns how long team members will need to complete the project. It also highly impacts the business because if the programme isn't finished on time, the planned result might not be realised.

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What is included in a Feasibility Study report? 

You should make a Feasibility Study report before starting a project. This way you can analyse if your business idea is really viable and will bring you success. When you conduct this study, you would have to consider lots of factors such as if the people are going to buy your product or service, how much competition is out there, if the company can afford it and so on. 

The Feasibility Study must include things like how much technology and resources you need and how much you can hope to earn from your investment. The results of this study are put together in a report, which usually includes the following sections:

a) Executive summary

b) Approach to marketing

c) Organisation/staffing

Examples of a Feasibility Study

Feasibility Study has helped decide if big ideas can work. Here are two examples:

University Science Building Upgrade

This example is about a university that wanted to upgrade its old science building from the 1970s. They thought it was outdated and needed a change. To implement this, they evaluated different options and determined how much they would approximately cost. Some people were worried about the project being too expensive or its potential to causeissues in the community. The study also analysed what technology the new building would  require, and how effectively it would help students, and also, if it would attract more students.

Along with this, they looked at the financial aspect too, as to how they would sponsor for it and if they would make more money from having additional students. The study showed that the project could work, so they went ahead with the upgrade.

High-speed Rail Project

This example  is timed when the Washington State Department of Transportation wanted to see if they could build a fast train connecting Vancouver, Seattle, and Portland. To initiate this, they first focused on how to make decisions about the project in the future.

They discussed it with several people and groups to ensure everyone was okay with the plan. Later, they looked at how to pay for it and thought it would cost between $24 billion and $42 billion. They would get money from the government and maybe from loans and investors.

The study showed that the train could bring lots of good things like better jobs and less traffic. They started looking into this in 2016 and finished the study in 2020. They then shared the report with the government.

Seven steps to do a Feasibility Study

As Feasibility Study is a crucial step in determining a potential of a project, it involves a substantial period of time and resources. Let’s take you through some of the steps involved in the following points:

1) Do a preliminary analysis and define the scope of the study

Before going through a Feasibility Study, it is wise that you do just one small check. The time and resources involved in Feasibility Studies may be burdensome; hence, it is imperative to determine if it is worth it as early as possible.

Through this form, one can establish whether the study holds awarding potential and who else should be involved on a higher level. You further this stage by answering questions like what you might win, what pitfalls you will face, and what you need for the success of the project.

2) Prepare a projected income statement

First, while doing a Feasibility Study, you should obtain the income statement projection. In this, the statement calculates earnings and expenditures in subsequent one-year amounts. It is made up of the sum of what you will surely get and the cost you will need to cover.

Smaller businesses tend to need marketing strategies to grow into bigger companies. These facts are extremely important because they help business owners make smart decisions regarding the stage of the business.

3) Carry out market research

Market research is of paramount importance or, naturally, it will be of no use when developing the Feasibility Study. Primarily, it operates to ascertain the viability of the project. This point tells you time, which gives you knowledge of the current market state: Who your customers are, who your competitors are, how big the market is, and how many of it you could have. One way of doing this market research is by asking people questions, referring to experts, and checking very broad social media and other public info to find out what's going on.

4) Organisation and operations plan

Once you've figured out how the market behaves and the scope of your organisation, you can draft the setup of your plan. The detailed work plan for the project will provide the answer to how it will work in a practical form. It tests three aspects of your project, like whether it can be run, whether it is cost-effective, whether it complies with the law, and whether the technology fits.

This is to help you comprehend everything you can do and what you may require to get this project going, for example, the equipment, the materials to start the project, additional costs, and if you need to hire or train people. If you need to, you may make that change if the information you have brought is enough.

5) Calculate and prepare the initial balance of expected revenue and expenses

In this step, you must be expert in handling things from the financial part. You’ll make estimates on how much you may initially spend starting up your project, and then how much your project could make and spend based on that estimate. Among the many issues involved are such as the amount of money you are receiving from your customers, money you owe to others and assets that you own. 

Fixed costs, such as variable costs that will change based on the number of goods you produce, and equipment costs also need to be factored in money you may borrow or pay for land and service other companies. Keeping this in mind, you should also consider your business’ off seasons and how much risk you are willing to take. These calculations save a lot of time and effort and can be used to answer the most difficult questions of Feasibility.

6) Review and analyse all data

After going through all the steps, it's crucial to do a thorough review and analysis. This helps ensure that everything is in order and there's nothing that needs adjusting. Take a moment to carefully look back at your work, including the income statement, and compare it with your expenses and debts. Ask yourself: Does everything still seem realistic?

This is also the perfect opportunity to consider any risks that might come up and create contingency plans to handle them. By doing this, you'll be better prepared for any unexpected challenges that may arise.

7) Make a go/No-go decision

Now, it's time to decide if the project can work. This might seem simple, but all the work you've done so far leads up to this moment of decision-making. Before making the final call, there are a few more things to think about. First, consider if the project is worth the time, effort, and money you'll be putting into it. Is the commitment worth it?

Secondly, think about whether the project fits with what your organisation wants to achieve in the long run. Does it align with the organisation’s strategic goals and plans? These factors are essential to consider before making your decision.

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Conclusion 

You are now more familiar with how a well-executed Feasibility Study is a cornerstone of informed decision-making in Project Management and business ventures. It acts as a critical guide, helping organisations assess the practicality and viability of their initiatives, ultimately minimising risks and increasing the likelihood of success. 

Frequently Asked Questions

Employers value skills like analysis, problem-solving, attention to detail, and communication in Feasibility Study specialists. They need to be good at crunching numbers, finding solutions, and explaining complex ideas clearly.

Many industries need expertise in Feasibility Studies, like Construction, Healthcare, Tech, and more. It helps decide if projects are doable.

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