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:

1. 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.
2. 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.
3. 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.

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.