Tag: feasibility study components

Components of a Good Feasibility Study

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Writing feasibility study is very essential in business so that entrepreneurs or businessman may know if the proposed business or ideas is profitable. Time and effort in writing feasibility study is worth since feasibility study serves as an evaluation and analysis of a proposed business or proposed project to know if it is technically feasible and it is feasible within the estimated cost.

Here are some components to consider in writing a good feasibility study:

–    Introduction
Background information of the proposed business or proposed project will be described such as the proposed name and purpose of the business. It also includes the skills and experience of the business investors.

–    Business or Project Description
Information about the business or project as well as the nature of industry or nature of the project is discussed in this section.

–    Market Analysis
Current and potential demand of the product or idea is determined. Also, it contains information about the buyers as well as the sales forecast over the first three years.

–    Management Analysis
Skills and talent of the management team or personnel involved in the business or the project should be included. It contains the primary duties of each personnel with the organization structure.

–    Technical Analysis
Detailed requirements of the facilities, inventory and production control is identified.  Also, it provides the raw material needed and other utilities.

–    Risks and Problems
Major and minor risks and problems of the proposed business opportunity or project are elaborated.

–    Economic Analysis
Cost and benefit analysis discussed.

–    Financial Analysis
Total estimated cost of the proposed business or project are included as well as the projected cash flow and profitability.

Components of Feasibility Study

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First of all I would like to define what is feasibility study? Well, a feasibility study is written to find out if the chosen project is feasible before investing money. Feasibility study will determine if the proposed venture is profitable and viable and also to study the possible risk that will encounter during the implementation.

The following are some of the components of feasibility study.

  • Project Description. It contains the project name such as the name of the enterprise as well as the purpose of this business venture. You must also include the information about stakeholders and the end result expected.
  • Goals. It provides the list of your goals and procedures needed to achieve these goals.
  • Timetable. It should have the estimated time to complete the project.
  • Cost and Budgeting. All cost must be included such as all cost incurred for the project.
  • Market Analysis. It provides if the proposed project or business venture has a demand. It includes the market assessment such as the industry description and competitiveness as well as the market potential and sales projection.
  •  Technical Analysis. It contains the competiveness of technology and it identifies the constraints and limitations of the technology.
  • Financial and Economic Analysis. It details the capital requirement to facilities, equipment and inventories.
  • Resources. It identifies all the resources needed to complete the project including the technical, inventory and human resources.
  • Process. It contains the project flow such as the flow charts showing project stages.
  • Teams and Management. It includes the organizational structure and team management teams. Provides the staffing structure of the proposed business.
  • Conclusion.  It contains other alternatives and compares these alternatives based on your goals. Outline the criteria for decision making.