Feasibility study helps in getting an overview about the feasibility of carrying out an operation. Before we go ahead and help you out with a feasibility study template, let us try to understand the need to carry out a feasibility study.
If you are the organizational head of the company or own a business, you would have surely come across a feasibility template before starting a new project. A feasibility study can be thought of as an analysis of the potential of the proposed venture which helps in determining whether it will be profitable and whether you should proceed with it. For example, if your company specializes in product A and you are thinking about launching a product B to increase your sales, you would definitely like to do a bit of research about the feasibility of launching the product. You would like to know your target audience, their behavior patterns and what would be the factors they consider before putting their money on a product. This is where a feasibility study helps you. It gives you the complete know how about the background of the proposed venture so that you have done your homework before entering new territories.
Benefits of a Feasibility Study
Some of the benefits of a feasibility study are:
- It helps you in knowing all the factors that can affect your planned venture.
- It also helps in knowing your strengths and weaknesses before starting with the project so that you can capitalize on your strengths and improve on your mistakes.
- If you are planning to borrow from banks or money lending agencies, a feasibility study of your proposed venture helps you in convincing them as they get the impression that you have a solid plan of action and you have read the conditions very well.
- A feasibility study also helps you to understand the competition in a better way.
Feasibility Study : An Example
For example, you plan to launch a fast food joint in a locality and while doing a feasibility study, you come to know that the residents of the locality are diet conscious and averse to food containing high fats. You also learn that the most successful restaurant in the locality has marketed itself as a company that is concerned about the health of the people. A feasibility study will tell you whether going ahead with your plans of launching a fast food outlet would be feasible or not. It can give you the data regarding the break-up of the population of the area, about the young population of that area, who have to always depend on outside food, or people who don’t mind devouring on a burger once in a while. Once you have taken a look at all these factors, you can make a calculation about the money you will be investing and the profits that you are expecting etc.
Feasibility Study Template
To determine the feasibility of the proposed plan of investing in the proposed joint venture of ____________, with the following stakeholders.
Name of Stakeholders
You can write a brief description of your proposed venture, like the amount of capital you are willing to invest, the segment you are going to target, your location etc.
List of Competitors
Information about your customers, like their age groups, the income class they fall in etc.
A forecast about the number of people that will be required and any specific skills if required. The cost of labor and the licenses that you need to have before hiring them. A detailed study of the laws of the state to ensure that everything is in accordance with the government rules and regulations.
An analysis of the risk factors that can hamper the growth of the business. The ways in which these risks can be eliminated or reduced.
The feasibility study is an important indicator about the pros and cons of a project and aids in understanding these pros and cons in a better way. It has helped various organizations in understanding which projects can reap in profits and which ones are difficult to carry out. Apart from saving the resources of the firm, a feasibility study also helps in prioritizing the projects, that is the projects that are more feasible are carried out first. It provides you with comprehensive and detailed information about the proposed investment which plays a major part in decision-making.