Feasibility Study Types

When assessing the viability of a project, there are a variety of factors to take into account. You can also undertake various feasibility studies to evaluate your project from various angles.

1. Pre-Feasibility Study

As the name implies, a pre-feasibility study is a procedure that is carried out before the feasibility study. To ascertain whether the project has serious operational, financial, technical, or other evident flaws as soon as possible, decision-makers and subject matter experts will rank various project ideas or approaches in order of priority. If there is merit to the project proposal, a thorough feasibility study will be conducted.

2. Technical Feasibility Study

The goal of a technical feasibility study is to ascertain whether your company possesses the technical know-how and resources needed to complete the project. A technical study aims to determine whether your company possesses the resources required to carry out a project, including raw materials, supply chain, production capacity, and other inputs. You should also take into account other aspects, such as standards or requirements for regulatory compliance for your goods or services, in addition to these production inputs.

3. Economic Feasibility Study

This kind of study, also known as a financial feasibility study, helps you decide if a project is financially feasible. For economic feasibility studies, the following actions are necessary:

• List working capital, seed money, and additional requirements like contingency capital.
• Calculate the amount of labor, equipment, and raw materials that will be needed.
• Classify and identify all project costs using a cost breakdown structure.
• Determine possible sources of funding, such as loans, venture capitalists, or angel investors.
• Create preliminary balance sheets, financial statements, and cash flow statements for financial

4. Legal Feasibility Study

All activities and deliverables within the project scope are subject to laws and regulations, which your project must comply with. Consider the best possible legal structure for your company as well as its investors. Regarding the liability of business owners, every legal structure has pros and cons. For example, corporations and limited liability companies (LLCs) lessen the liability of each business partner.

5. Market Feasibility Study

The viability of your project in the market is ascertained by a market feasibility study. To do this, you must examine the following elements:

• Industry Overview: Evaluate growth from the previous year, pinpoint rivals, and examine market patterns.
• SWOT Analysis: Assess the market’s opportunities, threats, weaknesses, and strengths (operational capabilities).
• Market Research: Assess the viability of the market and the obstacles to entry.

A feasibility study is essentially checking if a project idea or plan could work. To do this, different aspects are analyzed, like if the technology is available, if there’s enough money, if it follows the rules, if it fits with how things are already done, and if it can be completed on time. By looking at all these factors, the study determines if the project is worth pursuing and if it’s likely to succeed. This article focuses on discussing who performs feasibility studies and what it involves.