Feasibility Studies
What’s a feasibility study?
A feasibility study is an analysis that examines the practicality of a project — like a new venture or a new product — to ascertain its likelihood of success. It doesn’t answer the question “how much money will we make?” but rather “can this be done and what are the risks?”.
What’s their purpose?
Ideas for potential new business opportunities seem to come from everywhere — but are they good ideas? How do you know, other than following your gut instincts?
You probably want to know if there is a market for it? Who would be the target customer? How could the concept be delivered as a product or service? Could it be financially viable? What resources and capabilities would you require to seize the opportunity? What are the risks? Can they be remedied? How would you operationalize it? What would the timeline be?
Of course, some ideas are easy to dismiss as lacking serious potential.
But, if an opportunity is worthy of serious consideration, the proven solution for answering these types of questions is a feasibility study. A feasibility study investigates an opportunity, articulates its pros and cons, and determines factors that could lead to its success or failure. It can uncover market, technical, industry, regulatory, and other challenges that you didn’t realize existed.
Bottom line, a feasibility study fleshes out what a new venture entails, helps you decide if you are comfortable with its risks, and make that all-important Go/No Go decision to invest.
Who needs a feasibility study?
A feasibility study is a prudent step for any entrepreneur, investor group, or organization that is considering a new venture requiring a significant investment of resources and time.
That usually means operations requiring machinery, land, and buildings such as manufacturing businesses, processing plants, food production, municipal infrastructure, etc.
Sometimes feasibility studies are used to investigate developing a new line of business or product line.
The ultimate goal of your feasibility study is to equip you — and your stakeholders — to be ready to make a decision to:
- go ahead with the venture;
- abandon the idea; or,
- wait until specific challenge/s identified in the study can be resolved.
And who DOESN’T need a feasibility study?
We want to be up front that some Internet entrepreneurs think feasibility studies are an old-fashioned approach. This is because net-based ventures can sometimes have minimal start-up costs. If all you risk is some of your time to develop a website, plus a few dollars for web hosting, the temptation is to just go ahead and see how things work out.
If that describes you, then you may want to go ahead and roll the dice.
Of course, not doing a feasibility study before investing might end up in you making a decision to go ahead, and then running into an unanticipated show stopper. And waste a year or two when you could have been working on something else!
Click here to contact us about your feasibility study needs.
