An assessment of the practicality of a proposed project/plan Show
What is a Feasibility Study?A feasibility study, as the name suggests, is designed to reveal whether a project/plan is feasible. It is an assessment of the practicality of a proposed project/plan.  A feasibility study is part of the initial design stage of any project/plan. It is conducted in order to objectively uncover the strengths and weaknesses of a proposed project or an existing business. It can help to identify and assess the opportunities and threats present in the natural environment, the resources required for the project, and the prospects for success. It is conducted in order to find answers to the following questions:
Steps in a Feasibility StudyConducting a feasibility study involves the following steps:
Contents of a Feasibility ReportA feasibility report should include the following sections:
Types of Feasibility Study1. Technical feasibility
2. Financial feasibility
3. Market feasibility
4. Organizational feasibility
Final WordThe practice of companies blindly following available templates comes with enormous risks. Whether companies design or copy certain business models, it is necessary to conduct a feasibility study, using models, to reduce the risk of failure. A feasibility study of the business model should be centered on the organization’s value creation processes. More ResourcesThank you for reading CFI’s guide on Feasibility Study. To keep learning and advancing your career, the additional CFI resources below will be useful:
Skip to main content Goldsmith Technology Commercialization ModelOnce the technical feasibility and market studies are complete, it is time to determine Business Feasibility. The first purpose of this effort is to financially model the venture opportunity and achieve a break-even analysis. In other words, based upon the costs of goods sold, capital costs, and management and administration, how much revenue generated from units sold is required to break-even and over what period of time. Once a break-even analysis is developed, the entrepreneurs can develop realistic financial projections for best case and worst case scenarios. These scenarios will be critical in strategic planning, milestone development and venture valuation analysis. The simple objective is to determine what level of revenue is required to satisfy the return on investment demanded by the founder and/or the investors. Definition: The economic feasibility step of business development is that period during which a break-even financial model of the business venture is developed based on all costs associated with taking the product from idea to market and achieving sales sufficient to satisfy debt or investment requirements. Objective: The objective of the economic feasibility is to develop a financial model of the business venture. Product: The product of this step is a complete integration of the technical product information and the market study into one or more break-even financial models. Business ActivitiesThe business activities common to this step are those necessary to develop a conceptual plan for a business venture based upon one or more financial scenarios. During the economic feasibility step, the following activities must be completed:
Milestones: A financial model accurately representing the business opportunity Funding Sources: Personal finances, Friends and family Business Information: Completion of the economic feasibility step will usually result in a go/no-go decision concerning the business venture, and if the decision is positive, identification of sources and uses of seed capital for the development phase. Key QuestionsDoes the venture demonstrate a positive economic feasibility? What are the four areas of the feasibility analysis?The full feasibility analysis for a for-profit enterprise typically covers four areas: Product/service feasibility; Industry/market feasibility; Organizational feasibility; and Financial feasibility (Barringer & Gresock, 2008).
Which one is not the part of feasibility analysis?resource feasibility is NOT a feasibility analysis criterion.
What are the types of feasibility analysis?There are different types of studies to check feasibility, such as technical feasibility, market feasibility, organization feasibility, and financial feasibility, that help a company determine the viability of a business plan.
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Which of the following is not one of the four areas of feasibility analysis discussed in the unit?
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