Steps to Ensure an Effective Feasibility Study

1. Perform a Preliminary Investigation

Lay out your project plan first. If there is an unmet need in the market, there is a gap between supply and demand, and the product or service has a clear advantage, these are the areas you should concentrate on. Next, ascertain whether the feasibility factors—such as being too costly or difficult to market—are too high to overcome.

2. Create an Income Statement Projection

To complete this step, you must go backward. Start by estimating the project’s revenue, and then determine what funding is required to reach that target. The basis of an income statement is this. Take into account the services that will be needed, their associated costs, and any changes to revenue that may result from things like reimbursements.

3. Carry out Market Research or a Market Survey

Your feasibility study’s success depends on this step, so conduct the most comprehensive market analysis you can. It is beneficial to hire an outside firm to do it if your organization lacks the resources to do it properly because it is that important.

You can get the best idea of the project’s potential revenues and return on investment by conducting market research. The market’s geographic influence, demographics, competitor analysis, market value, your share, and whether the market is open to expansion (i.e., in response to your offer) are a few factors to take into account.

4. Arrange the Structure and Functions of the Business

After laying the foundation for the preceding steps, the project must be organized and run to satisfy the requirements of technical, operational, economic, and legal feasibility. This is not a superficial, general project. It should be comprehensive and include operating, fixed investment, and startup costs.

These expenses cover things like staff, real estate, equipment, merchandising strategies, overhead, supply availability, etc.

5. Create a Balance Sheet for the Opening Day

As accurate an estimate of the assets and liabilities as feasible should be part of this. Make a list of the items, sources, prices, and financing options to accomplish this. Leasing or buying land, buildings, and equipment, financing for assets, and accounts receivable are examples of liabilities to take into account.

6. Go Over and Examine Every Data

While each of these steps is crucial, the review and analysis are the most crucial to make sure that everything is in its proper place and nothing needs to be adjusted. Give your work one last review at the moment.

Review the earlier stages, like the income statement, and contrast it with your out-of-pocket costs and obligations. Is it still reasonable? This is also the time to consider risk and develop any backup plans.

7. Choose Whether to Proceed or Not

This is where you have to decide if the project can be completed. That may seem straightforward, but every step before it has led to this point of decision-making. Before making that decision, you should also think about whether the commitment is worthwhile in terms of time, money, and effort, and whether it fits in with the organization’s long-term goals and strategic objectives.

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.