FEASIBILITY STUDY AND

BUSINESS PLAN

Feasibility study is an analysis of the viability of an idea. The feasibility study focuses on helping answer the essential question of “should we proceed with the proposed project idea?” All activities of the study are directed toward helping answer this question. Hofstrand (2009)

FEASIBILITY STUDY

A feasibility study looks at the viability of an idea with an emphasis on identifying potential problems and attempts to answer one main question: Will the idea work and should you proceed with it?

The information you gather and present in your feasibility study will help you: List in detail all the things you need to

make the business work; Identify logistical and other business-

related problems and solutions;

Important of Feasibility Studies

• Develop marketing strategies to convince a bank or investor that your business is worth considering as an investment; and• Serve as a solid foundation for

developing your business plan.

Good business idea could be buried due to lack of thorough study.

Demerit of Feasibility Study

Components of Feasibility Studies

Market Feasibility:

 Includes a description of the industry, current market, anticipated future market potential, competition, sales projections, potential buyers, etc.

Technical Feasibility: 

Details how you will deliver a product or service (i.e., materials, labor, transportation, where your business will be located, technology needed, etc.).

Financial Feasibility: 

Projects how much start-up capital is needed, sources of capital, returns on investment, etc.

Organizational Feasibility: 

Defines the legal and corporate structure of the business (may also include professional background information about the founders and what skills they can contribute to the business)

Discusses how the business can succeed. Be honest in your assessment because investors won’t just look at your conclusions they will also look at the data and will question your conclusions if they are unrealistic.

Conclusions: 

Q and A

Set of documents prepared by a firm's management to summarize its operational and financial objectives for the near future (usually one to three years) and to show how they will be achieved.

It serves as a blueprint to guide the firm's policies and strategies, and is continually modified as conditions change and new opportunities and/or threats emerge.

When prepared for external audience (lenders, prospective investors) it details the past, present, and forecasted performance of the firm.

And usually also contains pro-forma balance sheet, income statement, and cash flow statement, to illustrate how the financing being sought will affect the firm's financial position.

Read more: http://www.businessdictionary.com/definition/business-plan.html#ixzz3mmcGXfhQ

BUSINESS PLAN

IMPORTANCE OF BUSINESS PLAN

http://articles.bplans.co.uk/starting-a-business/five-reasons-you-need-a-business-plan-2/364

COMPONENTS OF BUSINESS PLAN

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