The Significance of Feasibility Study

Persistence in the marketplace has become challenging, however, entering it is an all-inclusivedistinctive story. An absence of appropriate planning and far-sightednessleads to failure. Thus, to warrant profitability, it becomes indispensable to conduct in-depth analysis before plummeting into the market. An accurate example of this analysis is the feasibility study.

The feasibility study acts as an exploratory tool to assess the potential, viability or practicability of a new business or a new segment of business. It is abrilliant instrument for the prediction of theprobability of success or failure of a new business venture or launching a new product/service line into an existing business mix.

It stipulates results which may direct in:

• Moving forward with the idea
• Refining it
• Leaving it altogether

A feasibility study also determines alternatives and solutions which may otherwise not have been known. Thus, it becomes vital to conduct this research before the commitment of business resources, time and funds to an idea that may not work as planned. The collection of this data helps make informed decisions by the selection of the most profitable path.

Our Feasibility Study’s components include (but are not limited to):

Market Analysis

The market analysis is conducted to critically analyze and understand the environment in which your business will compete. Some basic components of market analysis include:

• Estimate of market size, volume
• Projected market share
• Analysis of the competition
• Key Future Trends

Financial Analysis

In addition to the market analysis, the financial analysis is a critical component of the feasibility study. Without the “financials” it will be impossible to determine how feasible the business idea is. Key components of financial analysis include:

• Capital Requirements
• Start-up Costs
• Revenue Projections
• Gross Profit Margins (GPM)
• Net Income

Technical Analysis

Technical Analysis is used only for certain type of businesses that are technology driven. The analysis will vary from case to case and may include statistical measures and other technical evaluations.

Economic Analysis

While financial analysis uses market prices to check the equilibrium of investment and the sustainability of project, economic analysis uses economic value that is altered from the market price by excluding tax, profit, subsidy, etc. to gauge the legitimacy of using national resources to certain project. This can also include the comparison of various economies to estimate the competitive edge of one over the other.

Organizational and Operational Analysis

The supply chain is one of the most significant segment covered here as it gives us an estimate and breakdown of the various components involved in the supply chain and logistics domain. The human resource is another principal aspect of the organization and the feasibility study lays down the expertise required and associated job responsibilities.

Needless to mention, feasibility study/report is an imperative document before launching a new business idea or a new product/service line into an existing business mix.