Feasibility Study

What Is the Feasibility Study?

The first step in determining whether a new project at work is the ideal option for you and your company is to create a defined plan. A feasibility study can assist you in focusing on various parts of the concept before deciding on a course of action. Project management training has grown in popularity and recognition in recent years, and these trends are projected to continue and increase. And, as the importance of project management grows, so does the requirement for a feasibility study. So, what exactly is the feasibility study? The feasibility study, in other words the feasibility analysis, serves as the foundation for your project plan. A feasibility study is an assessment of the viability of a specific project plan or strategy. This is accomplished through an examination of technical, economic, legal, operational, and time feasibility concerns.

What Is the Purpose of The Feasibility Study?

A feasibility study assesses the viability of a specific plan or project. A feasibility study examines a project’s viability to assess whether the project or endeavor is likely to succeed. The research is also intended to identify prospective challenges and problems that may develop while carrying out the project.

These studies examine a company’s strengths, weaknesses, opportunities, and threats to assess whether the ideas are cost-effective and advantageous to the long-term success of the company. Furthermore, investors can benefit from examining the study’s problems and answers in order to determine whether a suggested project is the best option for a company.

What Are the Types of Feasibility Study?

A feasibility analysis assesses the project’s likelihood of success; thus, acknowledged objectivity is an important aspect in the study’s credibility for possible investors and financing institutions. There are five types of feasibility studies—individual areas that a feasibility study investigates, as indicated below:

Technical Feasibility

This evaluation is based on the organization’s technological resources. It assists organizations in determining whether technical resources are enough and if the technical team is able to translate ideas into workable systems. Technical feasibility also includes an assessment of the planned system’s hardware, software, and other technical needs.

Economic Feasibility

This assessment often includes an expense analysis of the project, which assists businesses in determining the feasibility, cost, and benefits of a project before committing resources.

Legal Feasibility

This assessment looks into if any component of the proposed project violates any regulations, such as planning restrictions, data protection legislation, or social media laws.

Operational Feasibility

This assessment entails conducting research to determine whether—and how well—the organization’s needs can be addressed by finishing the project.

Scheduling Feasibility

This is the most critical assessment for project success; after all, a project will fail if it is not completed on time. An organization assesses how long it will take to finish a project in scheduling feasibility.

What Are the Most Important Parts of Feasibility Study?

The practice of businesses simply following accessible templates carries significant concerns. To lessen the chance of failure, organizations must do a feasibility study utilizing models, whether they build or copy certain business models. A business model feasibility study should focus on the organization’s value creating processes. A feasibility study is an excellent business technique. Studying successful firms reveals that they did not embark on a new company venture without first properly examining all of the difficulties and determining the likelihood of business success.

How to Prepare a Feasibility Study?

Begin by sketching up your project idea. You should concentrate on an unmet need, a market where demand exceeds supply, and whether the product or service has a distinguishing edge. And then, continue with estimating the project’s revenue and then determining the project funding required to meet that target. An income statement is built on this foundation. Consider what services are necessary and how much they will cost, as well as any revenue changes. Next, conduct market research or execute a market survey. This step is critical to the success of your feasibility study, therefore conduct a thorough market analysis. It is important that if your corporation lacks the means to conduct one properly, it is advantageous to employ an outside company to accomplish this task. After the previous processes have been completed, it is time to organize and operate the intended project in order to meet its technical, operational, economic, and legal feasibility aspects. After everything, preparing balance sheets, analyzing and making a final decision are the last steps you’ll end up with.

What Are the Risks of a Feasibility Study?

Some problems and difficulties that feasibility studies may encounter in their initial stages include difficulty in obtaining accurate data and information from reliable sources or a lack of data and information to study the project, particularly if the investment opportunity is an entirely new idea that has not been imitated for similar projects in the market. Difficulty arises when evaluating some key parameters in the project, which becomes more difficult if the project is large and the variables are indirect or not accurately measured quantitatively.