As the name implies, a 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.
Feasibility studies can be used in many ways but primarily focus on proposed business ventures. Farmers and others with a business idea should conduct a feasibility study to determine the viability of their idea before proceeding with the development of a business. Determining early that a business idea will not work saves time, money and heartache later.
A feasible business venture is one where the business will generate adequate cash-flow and profits, withstand the risks it will encounter, remain viable in the long-term and meet the goals of the founders. The venture can be either a start-up business, the purchase of an existing business, an expansion of current business operations or a new enterprise for an existing business.
A feasibility study tests the viability of an idea, a project or even a new business. The goal of a feasibility study is to place emphasis on potential problems that could occur if a project is pursued and determine if, after all significant factors are considered, the project should be pursued. Feasibility studies also allow a business to address where and how it will operate, potential obstacles, competition and the funding needed to get the business up and running.
Feasibility studies allow companies to determine and organize all of the necessary details to make a business work. A feasibility study helps identify logistical problems, and nearly all business-related problems, along with the solutions to alleviate them. Feasibility studies can also lead to the development of marketing strategies that convince investors or a bank that investing in the business is a wise choice.
There are several components of a feasibility study:
- Description – a layout of the business, the products and/or services to be offered and how they will be delivered.
- Market feasibility – describes the industry, the current and future market potential, competition, sales estimations and prospective buyers.
- Technical feasibility – lays out details on how a good or service will be delivered, which includes transportation, business location, technology needed, materials and labor.
- Financial feasibility – a projection of the amount of funding or startup capital needed, what sources of capital can and will be used, and what kind of return can be expected on the investment.
- Organizational feasibility – a definition of the corporate and legal structure of the business; this may include information about the founders, their professional background and the skills they possess necessary to get the company off the ground and keep it operational.
We at IG Seychelles have an outstanding team ready for you to assist you with your feasibilty study. Please call us for more informatiuon or contact us here