Once you have developed a business idea, then you need to conduct what is known as feasibility studies, see feasibility studies are nothing but a study where in you see the viability of the productive.
So if I have to define feasibility study, I'll define it as a controlled process for identifying the problems and the opportunities, determining the objective and describing the situations.
What does feasibility study mean?
In simple terms, seeing if the business idea is viable enough to be taken further or not. If I'm using my resources for this business idea, or this project, how much money I'm going to earn because as I told you, resources are less like I gave you an example of 10 products. If you have 10 products in mind which you can develop, you cannot spend money on all the ten resources, because you would be having limited funds or limited money.
So feasibility study helps you in identifying which one is the best out of the ten ideas or ten products you have.
How does feasibility study helps your business?
It helps enlisting in detail the things which are required to make the business work. First thing, it helps you in identifying the logistical and other business related problems and solutions. It helps you to develop the marketing strategy to convince a bank or an investor to consider the business and invest money into it, or give loan to us.
It serves as a solid formulation for developing their business plan, and it helps in finding out ways which are cost effective. They have to do a business. So remember, feasibility study helps you in seeing whether the project is viable or not, whether you can go to an investor and convince him through this study that your project will generate the required returns.
According to that you can also develop your marketing strategies. You can understand what would be the requirements for the business in terms of the logistical. And you will always also be able to see the problems and solutions oceans which can arise in business.
So, first thing is, you will see what are the requirements of business as such in terms of finance and other resources. Then you will see what would be the logistical and other business related problems for which you need to find out a solution. It also helps you in finding out cost effective ways to a business.
What are The Types of Feasibility Study?
Market Feasibility
The first one is Market feasibility. What do I do with that? I will study the future anticipated market, so I will anticipate a future Market as study about that market. I'll see what the potential of my product out there is. What kind of competition I will face in that market when I launch my product, what are the projections in terms of sales? And who would be my potential buyer?
So basically, I'm studying about the market as such. Let's say you want to sell a typical pen, which has a market in terms of students. It is a cost-effective pen which you have come out with a very low priced pen.
So when you're doing a market feasibility study, you will see who would be your consumers as such. So, potential buyers, as told you, you will try to see if these potential buyers turn out into customers. Then what would be the sales projection?
Now you will try to see in the market the people who are going to compete with you, who are the other sellers of similar kind of product, and you will see what is the potential this pen has in terms of giving you profits.
Financial Feasibility
Now comes the financial feasibility. I study how much capital I will require to develop the business idea into a product or service. What would be the sources of one? Should I go to questo? Or should I go to bank? If I'm going to bank, what would be the cost of funds? If I'm going to investor how much I'll have to pay him in terms of dividend?
Organizational Feasibility
Organizational Feasibility would define the legal and the corporate structure of the business you need to. As we had learned in business studies, you need to see what kind of business you are going to define whether or sole proprietorship would be good enough, or you need to open a company.
So depending on the idea you have and what product you're planning to develop, you will have to do organizational feasibility, which will help you in determining the legal and the corporate structure of your business. Now let's see some features of feasibility study. So it is a process to see if the idea is feasible. And if yes, it is how it is going to work.
Comprehensive Feasibility
Now, a comprehensive feasibility study will look out at the entire structural needs, and the operations of a business are such limited or project feasibility. Studies looks at one specific task program idea or problem as such, when it comes to physical entity study, they look at both the sides.
They consider the advantages or disadvantages of the idea. As such, they troubleshoot potential problem. See if I am evaluating an idea. And if I see a problem, then feasibility study will help me how the problem can be solved.
Okay, so a potential problem Solver can be done, or problem can be solved using feasibility studies But this is not a business plan. This only serves as a foundation for developing a business plan as such.
Conclusion
Now, in addition to a business plan and investor, or a lending institution like a bank or a financial institution, requires submission of a feasibility Plan before they are considering the request for Capital, because they want to see how the entrepreneur has worked out in terms of feasibility of their business idea.
.png)