In its simplest form, a feasibility study represents a definition of a problem or opportunity to be studied. That is, an analysis of the current mode of operation, an evaluation of alternatives and an agreed course of action. As such, the activities to prepare a Feasibility Study are generic in nature and can be applied to any type of project, such as developing systems and software or making a purchase of a particular equipment.

What is a feasibility study?

A feasibility study is an analysis that takes into account all the relevant factors of a project. Includes economic, technical, legal, and programming considerations to determine the probability of successfully completing a project.

The feasibility study focuses on helping to answer the essential question of Should we proceed with the proposed project idea?" All study activities are aimed at helping answer this question.

How can a feasibility study be used?

Feasibility studies can be used in many ways, but mainly focus on proposed business projects. People with a business idea should carry out this study to determine the viability of their idea before continuing with the development of a business. Determining early that a business idea won't work saves time, money, and heartache.

A feasibility study is just one step in the evaluation of ideas and the business development process. A feasible business venture is one in which the business will generate adequate cash flow and earnings. In the same way, it will resist the risks it will face and it will meet the founders' goals.

Objectives of Feasibility Studies

A feasibility study is simply an evaluation of the practicality of a proposed plan or project. These studies ask: Do we have the people, tools, technology, and resources necessary for this project to be successful? Will the project give us the return on investment (ROI) that we need and expect?

In this regard, the objectives of the feasibility studies are as follows:

Thoroughly understand all aspects of a project, concept or plan.

Be aware of any potential problems that may occur while the project is being implemented.

Importance of Feasibility Studies

Feasibility studies can identify potential obstacles that can impede operations and recognize the amount of funds that will be needed to start a project. For example, they can target marketing strategies that could help convince investors or banks that investing in a particular project or business is a good choice.

When doing a feasibility study, it is always good to have a contingency plan that is also tested to make sure it is a viable alternative in case the first plan fails.

Tools for conducting a feasibility study

Suggested best practices

Feasibility studies reflect the unique goals and needs of a project, making each one different. In this regard, for example, you may want to do the following:

Get feedback on the new concept from appropriate stakeholders

Analyze and ask questions about the data to make sure it is robust

Conduct a market survey or market research to improve data collection.

Conduct a market survey or market research to improve data collection.

Prepare a projected income statement

Prepare an opening balance

Make an initial "go" or "don't go" decision about going ahead with the plan

Suggested Structure for a Feasibility Study

Once we are done with the basic research, we can consider the following elements as an element template to include in the study:

Executive Summary: Formulate a narrative that describes the details of the project, product, service, plan, or business.

Technological considerations: ask what it will take. You got it? If not, can you get it? How much will it cost?

Existing Market: Examine the local and broader markets for the product, service, plan, or business.

Marketing strategy: describe it in detail.

Personnel required (including an organization chart): What are the human capital needs for this project?

Calendar and Schedule: Include significant interim markers for the project end date.

Financial project: Findings and recommendations: break down into subsets of technology, marketing, organization and finance.

Reasons to do a feasibility study

Conducting a feasibility study is good business practice. f we examine successful companies, we will find that all their projects were thoroughly examined for all problems and assess the probability of business success.

Below are other reasons to conduct a feasibility study.

Focus on the project and describe alternatives.

Limits business alternatives

Identify new opportunities through the research process.

Identify reasons not to proceed.

Improves the probability of success by addressing and mitigating factors from the outset that could affect the project.

Provides quality information for decision making.

Provides documentation that the trading company was thoroughly investigated.

It helps to secure the financing of credit institutions and other monetary sources.

It helps attract capital investment.

The feasibility study is a critical step in the business evaluation process. If done correctly, it may be the best investment you have ever made.

Difference between Feasibility and Viability

If we are starting an investigation into a business, planning an investment, or embarking on a project, we need to determine whether it is feasible or even feasible for that matter. Knowing the viability and viability of a business effort or company will help assess its sustainability and the success of the project or business.

What is feasibility and what does obtaining a feasibility study of a project entail? Similarly, what is feasibility and how can you determine if a project is viable or not? Let's define what these words mean and how they can be done.

A feasibility study is one that aims to discover the strengths and weaknesses of an existing business or a proposed commercial company. It takes into account the opportunities offered by the environment, its resources and the subsequent success of the company. It must include the description of the product or service. In the same way, it takes into consideration its historical background, operating details, financial data and accounting statements, legal and fiscal requirements, and its policies on management and market research.

Viability, on the other hand, is the study or investigation of the existing business or the sustainability of the proposed company. Determine if the proposal must be approved or not. It involves dealing with strategies on how to make the business grow and last. Business growth is an important aspect of viability. How long a business will last is determined by its viability, and can be seen in the profits the business has made over a certain period. A good profit means a better chance of success for the business.

Feasibility study versus business plan

The term is similar to a business plan, but the meaning is not the same. When someone has an initial business idea, the company conducts a feasibility study.

The study aims to develop the possibilities in this business idea. The business plan, on the other hand, describes the company, its objectives, strategies and financial projections (forecasts).

A feasibility analysis tells us if something will work. A business plan tells us how it will work.

Feasibility types

Economic: which uses economic analysis or cost / benefit analysis in which benefits are compared to cost.

Legal: dealing with legal requirements.

Operational: which is about how to solve problems and take advantage of opportunities.

Timeline: This is about the duration of development and completion of the system and whether the timeline or deadline is desirable.

Timeline: This is about the duration of development and completion of the system and whether the timeline or deadline is desirable.

Resource: which implies the amount of time established for the project and the type and amount of resources required.

Cultural: which studies the impact of the project on local culture.

Financial: which includes the total cost of the project, its cash flow and profitability.

Conclusions

It must be remembered that a feasibility study is more a way of thinking than a bureaucratic process. As the scope of the project grows, it becomes more important to document the Feasibility Study, especially if it involves large amounts of money or the importance of delivery.

The feasibility study should not only contain enough detail to continue with the next phase of the project, but should also be used for comparative analysis when preparing the final project audit, which looks at what was delivered and what was proposed in the study of viability.

Feasibility studies represent a common sense approach to planning. If you are carrying out a feasibility study for your thesis and do not know how to channel it, at Online-tesis.com we are here to help you.

Bibliographic References

Blanco, A. (Octubre, 2003). Formulación y Evaluación de Proyectos (3° ed.). Caracas: Fondo Editorial Tropykos.

Hernández, R., Fernández, C. y Baptista, P. (2000). Metodología de la Investigación. México: McGraw Hill.

Palacios, L. (2000). Principios esenciales para realizar proyectos. Un enfoque latino (2° ed.). Caracas: Universidad Católica Andrés Bello.

 

Feasibility study

Estudio de factibilidad y su aplicación

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