IS YOUR BUSINESS/VENTURE FEASIBLE?

1
IS YOUR BUSINESS/VENTURE FEASIBLE?

• Objective 2.13

2
Feasability Study

• Provides an overview of the primary issues
  related to a business/venture idea. It
  determines if the business venture is feasible or
  doable.

3
What is the Purpose of a Feasiblity Study?

• Determines whether the business/venture idea
  makes sense.
• Are there any make or break issues that would
  prevent your business from being successful in
  the marketplace?
• Identifies roadblocks facing your
  business/venture BEFORE you make an investment.
• To answer the question Should I proceed with
  this project?

4
Benefits of a Feasibility Study

• Provides a lot of information necessary for the
  business/venture plan.
• Good market analysis is a necessary in order to
  determine the business/venture feasibility.
• Identifies reasons NOT to proceed
• Provides documentation that the business was
  thoroughly investigated (will help with getting
  financing, as well as help to attract equity
  investment)
• Identifies new opportunities through the
  investigative process.

5
Reasons people choose to NOT conduct a
Feasibility Study...

• Already know it is feasible (another business is
  already doing it and is successful).
• Why do one when one was done a few years ago?
• Just a way for consultants to make money.
• Market analysis has already been done by the
  business that sold us the equipment.
• A feasibility study is a waste of time.
• These may sound like good answers but remember...
  you may need to live with these decisions for a
  long time.

6
Conducting the Feasibility Study...

• Market Cosiderations...
• Technical Considerations...
• Financial Considerations...
• Organizational/Managerial Considerations...
• Competitive Considerations...

7
Market Considerations

• Current or projected demand for your proposed
  product or service(s)?
• What are the target markets for your product or
  service?
• What competition exists in this market?
• Is the location of your proposed business
  location likely to affect the success of your
  business?
• What is the projected supply in your area of the
  products or services needed for your project?

8
Technical Considerations

• Technology may or may not be of critical
  importance or it may not. Compare a daycare
  center to a manufacturing enterprise.
• If Technology is a consideration
• What are the needs for the business/venture?
• What other equipment does your business need?
  Where will you get it? When will you get it?
  What does it cost?

9
Financial Considerations

• Start-up Costs
• Operating Costs
• Revenue Projections
• Sources of Financing
• Profitability Analysis

10
Organizational / Managerial

• What organizational Structure is the right one
  for your business/venture?
• Who will serve on the Board of Directors and what
  are their qualifications?
• What qualifications are needed to manage this
  business?
• Who will manage the business?
• What are the staffing needs?

11
Competitive Considerations

• What competition exists in this market?
• Can you establish a market niche which will
  enable you to compete effectively with others
  providing this product or service?
• How much is your competition charging for similar
  product?

12
Elements of a Well-Conducted Feasibility Study

• In order for a feasibility to be useful it must
  be COMPLETE and include (at a minimum) the
  following elements
• Project Scope
• Defines the business problem and/or opportunity
  to be addressed.
• Current Analysis
• Define and understand the current method of
  implementation, such as a system, a product, etc.
• Requirements
• Financial, Human Resources, Material, Equipment
• Depends on the project

Source http//it.toolbox.com/blogs/irm-blog/the-
elements-of-a-good-feasibility-study-23199
13
Elements of a Well-Conducted Feasibility Study

• In order for a feasibility to be useful it must
  be COMPLETE and include (at a minimum) the
  following elements
• 4. Approach
• Recommended solution or course of action to
  satisfy the requirements.
• 5. Evaluation
• Examines the cost effectiveness of the Approach
  selected.
• 6. Review
• All of the preceding elements are then assembled
  into a Feasibility Study and a formal review is
  conducted with all parties involved.

Source http//it.toolbox.com/blogs/irm-blog/the-
elements-of-a-good-feasibility-study-23199