If a business is interested in a new business enterprise or a new venture for instance marketing a new product so it is important to conduct a feasibility study of the idea to assess its viability. The purpose of a business feasibility study is to determine if the business idea can generate profitability and remain possible in the marketplace for a long time.
- Executive Summary. It contains the overview of the study. It should be able to understand the study by your investor, clients and company’s management without having to read the entire text.
- Product Description. Describe the product such as the detail information as well as the benefits and advantages of the product. Include pictures of the product and other technical description. Tell also the difference of the product being offered compared to other products. Name the manufacturer and supplier as well as other information such as patents and related information.
- Market Analysis. It should provide information about the product’s potential market size such as number of customers and income. Discuss the target market for the new product. Also, it should contain the factors which will affect the demand for the product such as the demographic characteristic of the target client or customer as well as the existing competition.
- Financial Analysis. Discuss the financial information such as the price and related calculations that back up the pricing. Also, includes start up and working capital requirements, sales forecasts and profitability.
Feasibility study is not the same as a business plan. A feasibility study is a tool for determining whether a business idea is viable. A business plan is for planning the actions needed to bring the business idea to reality. The feasibility study does, however, provide information for the business plan.