When to use a Feasibility Study?
The purpose of a Feasibility Study is to identify the likelihood of one or more solutions meeting the stated business requirements. In other words, if you are unsure whether your solution will deliver the outcome you want, then a Project Feasibility Study will help gain that clarity. During the Feasibility Study, a variety of 'assessment' methods are undertaken. The outcome of the Feasibility Study is a confirmed solution for implementation
A Project Feasibility Study is an exercise that involves documenting each of the potential solutions to a particular business problem or opportunity. Feasibility Studies can be undertaken by any type of business, project or team and they are a critical part of the Project Life Cycle.
At this stage the client’s business needs are analyzed, information about project participants is collected, and the requirements for the system are gathered and analyzed. The client’s expectations for system implementation are studied and the proposed solution is offered. During the Feasibility Study stage, the project’s goals, parameters and restraints are agreed upon with the client including:
- Project budget and rules for its adjustment;
- Project time frame;
- Conceptual problem solution.
The following tasks are performed at this stage: - The project feasibility is estimated and the project scope is defined;
- Risks and benefits are identified;
- The project structure is elaborated;
- The project is roughly planned;
- The next project stage is planned precisely;
- Cost of the next phase is evaluated precisely and cost of the other phases — approximately;
- Functionality development priorities are defined;
- System creation risks are estimated.
At the end of this phase the following documents are available: - Feasibility Report — description of the proposed solution and list of high-level functional requirements;
- Project Structure> — description of the project organization;
- Project Plan — project schedule;
- Risks List — list of potential project risks and possibilities of their elimination.
Feasibility studies address things like location, raw material availability, connectivity, availability of natural resources, like water etc. They provide in-depth details about the business to determine if and how it can succeed, and serve as a valuable tool for developing a winning business plan.
The information we gather and present in your feasibility study will help you: - List in detail all the things you need to make the business work;
- Identify logistical and other business-related problems and solutions;
- Serve as a solid foundation for developing your business plan.
Feasibility study will help to find a cost-effective way to set up the plant. This is especially important when operating cost plays the dominant role for survival.
The Components of a Feasibility Study: - Description of the Business: The product or services to be offered and how they will be delivered.
- Market Feasibility: Includes a description of the industry, current market, anticipated future market potential, competition, sales projections, potential buyers, etc.
- Technical Feasibility: Technology selection, Raw material availability, Grid connectivity, Water availability, Road and rail connectivity etc.
- Financial Feasibility: Projects how much start-up capital is needed, sources of capital, returns on investment, etc.
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