The important of Business Feasibility Study

The important of Business Feasibility Study for your business

Posted on

What is needed for your business to grow rapidly?

The important of Business Feasibility Study. A business feasibility study is an analysis of the viability (whether to continue or not) of an idea.  The focus of a feasibility study is to be able to answer the important question “should we proceed with the proposed project idea?”, so all activities in the feasibility study aim to help answer that question.

Knowing early that an idea is not working as expected can prevent wasted use of money, time and resources.

Feasibility Study vs Business Plan

A Business Feasibility Study is not a business plan, this is often misinterpreted.

A feasibility study has an investigative function, while a business plan has a planning function which contains the steps needed to turn a proposal from an idea into reality.

This considers and examines several alternatives, which will later be studied to find the best alternative, while the business plan contains only one alternative.

The results from this process will become the basis for a business plan which will begin to be prepared if it is known that an alternative is feasible to continue.  The business plan contains a “blueprint” for project implementation.

Why is it necessary to carry out a Feasibility Study?

If we examine investments that have been successful, we will find that investment plans will not be carried out without going through a process of assessing important things and analyzing the possibility of success of the investment to be made.  Therefore, a Feasibility Study is a critical and important step in an investment.  If implemented correctly it will provide the best investment.

The following are the reasons why a business feasibility study needs to be carried out.

a.  Bring up several alternatives so as to provide direction or focus for the investment plan.

b.  Reducing existing alternatives.

c.  Provide reasons for continuing or not continuing an investment.

d.  Increase the likelihood of success or achievement of investment objectives by identifying and addressing the effects of the project as early as possible.

e.  Providing quality information for decision makers.

f.  Providing materials to attract investor interest.

What is usually provided in this business feasibility study consultant?

Services for this business feasibility study usually include the following things.:

Study the feasibility of business in the industrial sector such as factories, assembly, and the like

In the trade sector such as import export, distributor and the like

In the Retail sector such as opening a shop, establishing a franchising system, and the like

Study the feasibility of businesses in the service sector such as courier services, baby sisters, consultants and the like

If in the marketing sector, such as expanding regional and international markets, expanding export markets and the like.

Read also:

Dissecting the company business strategy

Scope of Feasibility Study Activities

In general, a feasibility study consists of 3 (three) main components, namely:

a.  Needs Analysis

b.  Technical Feasibility Study

c.  Financial Feasibility Study

a.  Needs Analysis

The most important thing that must be assessed is whether there is a potential need for the investment in question.  The required data is obtained by conducting surveys/collecting secondary and primary data as well as appropriate studies.

b.  Technical

Technically, it is necessary to study the appropriate investment location and technical solutions for the project.

c.  Financial

Based on the estimates made for the 2 aspects above, a financial feasibility analysis can be carried out.  Things you need to know are:

?  Start-Up Costs

?  Operating Costs

?  Revenue Projections

?  Sources of Financing

?  Profitability Analysis

The Results

The results of study will contain an in-depth study of the various alternatives.

Determining the best alternative is not the target of a business feasibility study, because what must be presented is each alternative in depth.  It is not the responsibility of the business feasibility study to determine whether the investment should be discontinued or continued.  The decision on this is up to the employer.

Leave a Reply

Your email address will not be published. Required fields are marked *

Time limit exceeded. Please complete the captcha once again.