Is your Is your business/venture business/venture FeasibleFeasible??

Capable of being done or carried out?E1- 2.13

How about a How about a Feasibility Feasibility Study?Study?the process of determining whether

an entrepreneur’s idea is a viable foundation for creating a successful business.

It determines if the business venture is feasible “doable”.

What is the What is the PurposePurpose of a of a Feasibility Study?Feasibility 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.

Should we proceed with this project?

Benefits of a Feasibility Benefits of a Feasibility StudyStudy

Provides a lot of information necessary to 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.

Reasons NOT to conduct a Reasons NOT to conduct a Feasibility Study...Feasibility Study...

Already know it is Feasible (another business is already doing it and is successful).

Why do one when one was already 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.

These may sound like good answers but remember... you may need to live with these decisions for a long

time.

Conducting the Feasibility Conducting the Feasibility Study... Study...

Market Considerations...Technical Considerations...Financial Considerations...Organizational/Managerial

Considerations...Competitive Considerations...

Market ConsiderationsMarket ConsiderationsCurrent 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 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.

Technical ConsiderationsTechnical ConsiderationsTechnology may or may not be of

critical importance. 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?

Financial ConsiderationsFinancial ConsiderationsStart-up CostsOperating CostsRevenue ProjectionsSources of FinancingProfitability Analysis

Organizational / ManagerialOrganizational / 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?

Competitive ConsiderationsCompetitive Considerations

What competition exists n this market?Can you establish a market niche

which will enable you tom compete effectively with others providing this product or service?

How much is your competition charging for similar product?

Characteristics of a well Characteristics of a well conducted Feasibility Studyconducted Feasibility Study

A good Feasibility Study will highlight the issues with the current plan and what needs to be done before the project is successful.

Must be complete

Answers the following questions◦ Are customers willing to purchase our goods and

services?◦ Can we provide the product or service to customers at

a profit?

Possible Courses of Action Possible Courses of Action after a Feasibility Studyafter a Feasibility Study

After working through these details, the next step is to make a recommendation - either to begin or not to begin a business.

Recommendation: recommendations from the Study regarding the viability of putting the business idea into practice should be honest, short and direct. These recommendations are not usually a straight "yes" or "no", but rather "Yes, if . . . ." Or "No, unless . . . ." You use the feasibility study to help make your decision: "Will this idea work for me or not?"

Procedures for Procedures for determining the determining the feasibility of a feasibility of a venture/product.venture/product. Is the industry as a whole profitable?

Is the industry characterized by high profit margins or razor-thin margins?

How essential are its products or services to customers? What trends are shaping the industry’s future? What threats does the industry face? What opportunities does the industry face? How crowded is the industry? How intense is the level of competition in the industry? Is the industry young, mature, or somewhere in

between?