Project Feasibility Study - Business Feasibility Study - Sample

Writing a Business Plan

2011-03-04T05:18:00.000-08:00

When you’re done with your business feasibility study and you find that your business idea is feasible, the next step is to write your business plan. Writing a business plan is important, as it will be your guideline in running your business. Your business plan should explain exactly how you will run your business, with all the exact figures including the capital needed to start the business. You should also provide the calculation of payback period in your business plan. You can use all the calculation that you put in your business plan to do a review on your business in the future. You can compare the figures in your business plan to the figures that you currently have to see whether your business is running better or at least just as planned, or not.

If you don’t have enough capital to start your business and you plan to attract some investors, you need to put some extra efforts in writing your business plan. Investors are investing their money to get profit, so they would need to see an excellent business plan before they decide to invest in a business. Your business plan should explain how your business can generate profit, how long will the investors get their return of investment, and how much profit they will get. In short, you should try to see from the investors’ point of view when you write the business plan.

To attract investors, you need to provide complete information about the management, customers, description of products or services, marketing plan, and how your business would deal with competition. Most investors want to get the largest amount of profit by investing in the safest business. When you present your business plan, investors will likely to ask you lots of questions about your business. It is better for you to prepare yourself by identifying the questions that the investors may ask before you present your business plan to them. The questions that the investors’ ask usually related to the risks of the business and how you will deal with them.

This article is based on my personal experience in running some small businesses, so it is quite simple. Medium to large businesses definitely need a more sophisticated business plan.

I will post an example of a business plan soon.

Calculation of Payback Period

2011-03-03T09:30:00.000-08:00

Payback period is the time that we need to get the return of investment that can repay the amount of our initial investment. The calculation of payback period is simple. For example, when we invest $7500 in a business that gets $2500 per year, we would have a three year payback period. In calculation of payback period, the time value of money is not taken into account. Payback period is simply being used to measure how long a business takes to pay for itself.

Even though payback period has some limitations, it is being widely used as a method of analysis (especially by people who are running small businesses) because of its simplicity. In any kind of business, shorter payback periods are better than longer payback periods. However, in the calculation of payback period, the time value of money, risk, opportunity cost, financing, or other important considerations are not taken into account.

Feasibility Analysis for Small Business

2011-01-22T01:13:00.000-08:00

Most people want to have their own small business. Unfortunately, we can see that many of them are failing. The failures of small businesses are caused by many different things. One of the things that can cause a small business to fail is the lack of feasibility analysis.

Before starting their own small business, people need to perform a simple feasibility analysis. The main objective of the analysis is to see whether the business idea is worth pursuing.

The following are several things that people should do when doing their feasibility analysis:

1. People need to check whether they have all the resources and knowledge needed to pursue the business idea. When someone is going to open a dry cleaner for example, he or she must have good knowledge about dry cleaning.

2. Before setting up a small business, people need to observe the market. Observing the market would involve checking the competitors, estimating the number of potential customers, etc.

3. The financial aspect is another important thing that people need to consider before setting up a business. They need to estimate the fixed and variable costs, potential sales revenue, and calculate the break-even figures.

4. To avoid pitfalls, people need to identify them right from the start. They need to foresee what kind of problems may arise, and how to deal with them.

After they have done all the steps above, people should be able to see whether their business idea is feasible or not.

Financial Feasibility Study

2010-02-18T23:46:00.000-08:00

In order to know whether a proposed project is financially feasible or not, a financial feasibility study needs to be conducted.

In a financial feasibility study, we analyze the total costs of a proposed project (including all construction costs and operating costs) and the potential revenues that the project can get. If the potential revenues of the proposed project can cover all of the costs, then the project is financially feasible.

Feasibility Study Template

2010-01-16T21:46:00.000-08:00

I am preparing a business feasibility study template, and it should be ready in a few days. The template is only a rough draft actually, just to give the basic idea of how to make a feasibility study report. When it’s done, I will put the download link here and you can download it for free.

My template is just a basic template. If you need a professional feasibility study template, you can buy one here.

New-product Forecasting

2010-01-15T10:33:00.000-08:00

To predict the degree of success that a new product will likely to enjoy in the market, we need to do new-product forecasting. Quantitative forecasting methods are not suitable for predicting the success of new products, because they depend on a historical data. To make forecasts for new products, judgmental methods are better because there are many uncertainties and few known relationships. However, there are many ways to make reasonable forecasts for new products. They usually include both qualitative judgments and quantitative tools of one type or another.

In new-product forecasting, we have to deal with the lack of known information. One way to deal with the problem is to incorporate a modified version of the Delphi method. Ken Goldfisher used this method while he worked in Nabisco Foods group’s Information Services Division. There are many market research activities that are useful in new-product forecasting. Surveys of potential customers for example, can provide useful information about the tendency of buyers to adopt a new product.

Economic Feasibility Study

2009-11-09T06:36:00.000-08:00

Economic analysis is used for evaluating the effectiveness of a proposed system. This method is also known as cost/benefits analysis. The procedure is to determine the benefits and savings that are expected from a proposed system and compare them with the costs.

If the benefits outweigh the costs, then the decision is made to design and implement the proposed system.

Fundraising Feasibility Study

2008-10-13T21:52:00.000-07:00

To determine if their proposed capital fund raising campaign has a good chance of success, organizations should use fundraising feasibility study.

The fundraising feasibility study should identify how much money the organization can possibly raise, how long the fund raising should take, and the costs that would be spent in conducting the campaign.

The study should also identify potential donors, strength and weaknesses of the fundraising campaign, and recommendations on how the fundraising campaign should be conducted to get the best result.

Through a good, objective fundraising feasibility study, an organization can learn what it needs to know before conducting a fundraising campaign, and whether all the critical factors for success are there or not.

Bankable Feasibility Study

2007-12-01T06:09:00.000-08:00

Bankable Feasibility Study is a comprehensive analysis of a project's economics and is used by the banking industry for financing purposes.

Feasibility Evaluation

2007-12-01T05:21:00.000-08:00

Feasibility evaluations provide results of interest to researchers and sponsors of the research. The typical characteristics that a feasibility evaluation tests for are functionality attributes and the possibility of extending to more general phenomena (changeability).

IT Feasibility Study

2007-12-01T05:15:00.000-08:00

Information Technology (IT) Feasibility Study is an analysis to determine whether a business need can be fulfilled by using a technical solution. The result of IT Feasibility Study determines whether a solution should be implemented.

Steps of Business Feasibility Study

2007-09-23T00:26:00.000-07:00

Steps of Business Feasibility Study

Planning

A. Determining
- general questions to answer
- specific questions to answer

B. Constructing a framework to answer those questions

C. Determining the data needed

D. Determining the steps and followed by implementing the Business Feasibility Study

Definitions of Business Feasibility Study

2007-09-23T00:12:00.000-07:00

Business Feasibility Study Definition:

Activities / efforts / analysis to measure the cost and benefit of a business project in order to define the efficiency and effectiveness of the project's method and tools (according to economic theory)

Other definitions of Business Feasibility Study:

- Activities / efforts / analysis to determine if a business opportunity is possible, practical, and viable (according to Heath Hoagland and Lionel Williamson, 2000)

- Activities / efforts / analysis to examine critical opportunities and obstacles that might make or break the proposed business (according to South Dakota Small Business Development Center)

Feasibility Analysis

2007-08-04T09:29:00.000-07:00

Feasibility Analysis a very important tool to help us assess the viability of starting a new business, re-organizing or expanding our present business.

Feasibility Analysis provides important information that we need to make the critical decision of whether to go forward with a business step.

The Feasibility Analysis usually in a form of a formal study conducted by someone outside the business (for example. consultant). However, it is important that the business founders are involved in the study.

Feasibility Report

2007-08-04T09:12:00.000-07:00

Feasibility Report is studying a situation and a plan to do something about it, and then determines whether the plan is "feasible" and whether it is practical.

Feasibility Report answers the question of whether a plan should be implemented by stating "yes", "no", and sometimes "maybe". Not only recommendation, Feasibility Report should also provide the data and the reasoning behind that recommendation

Privacy Policy

2007-07-05T07:07:00.000-07:00

FeasibleProject.com takes your privacy seriously. This privacy policy describes what personal information we collect and how we use it.

Routine Information Collection
All web servers track basic information about their visitors. This information includes, but not limited to, IP addresses, browser details, timestamps and referring pages. None of this information can personally identify specific visitors to this site. The information is tracked for routine administration and maintenance purposes only.

Cookies and Web Beacons
Where necessary, FeasibleProject.com uses cookies to store information about a visitor’s preferences and history in order to better serve the visitor and/or present the visitor with customized content.Advertising partners and other third parties may also use cookies, scripts and/or web beacons to track visitors to our site in order to display advertisements and other useful information. Such tracking is done directly by the third parties through their own servers and is subject to their own privacy policies.

Interest-Based Advertising
We use third-party advertising companies to serve ads when you visit our website. These companies may use information (not including your name, address, email address, or telephone number) about your visits to this and other websites in order to provide advertisements about goods and services of interest to you.

Controlling Your Privacy
You can change your browser settings to disable cookies if you have privacy concerns. Disabling cookies for all sites is not recommended as it may interfere with your use of some sites. The best option is to disable or enable cookies on a per-site basis. Check your browser documentation for instructions on how to block cookies and other tracking mechanisms.

You may opt out of the use of the DART cookie by visiting the Google ad and content network privacy policy.

Contact Information
Concerns or questions about this privacy policy can be directed to spinach_ako@yahoo.com

Technical Feasibility

2007-06-04T09:35:00.000-07:00

Technical Feasibility is the process of proving that the concept is technically possible.

The objective of Technical Feasibility step is to confirm that the product will perform and to make sure that there are no production barriers.

Buying a Small Business

2007-05-28T06:37:00.000-07:00

Some people lost their motivation after dealing with business startup problems and think that buying an existing business is a simpler and safer alternative.

Advantages of buying a small business

The main advantage of buying an existing business is the drastic startup cost reduction (time, money, and energy cost).
The business has preexisting customer.
Easier financing opportunities if the business has a positive track record.

Disadvantages of buying a small business

The initial purchasing cost can be very high
Hidden problems in the business (can be avoided by doing a good research before purchasing the business)

Business Feasibility Checklist

2007-05-25T01:15:00.000-07:00

Identify the Core Competency of your business

A core competency might be:

- Valuable (can generate large revenue)

- Rare (not easily found in competitors)

- Non Substitutable (cannot be replaced)

- Costly to imitate (expensive for the competitors to try to duplicate)

Develop a Concept Test
Conduct a Market and Industry Research
Conduct an Organizational Feasibility Analysis

Determine whether the proposed business has sufficient management expertise, organizational competence, and available resources.

Conduct a Financial Feasibility Analysis

Financial Feasibility Study elements:

- Estimation of Sales

- Estimation of Costs

- Estimation of Break-even Point and Profitability

Identify the Strength, Weaknesses, Opportunity and Threats (SWOT Analysis) of the business

Hotel Feasibility Study

2007-05-23T08:42:00.000-07:00

Conducting feasibility Study on Hotel Industry

To justify new projects and expansions of existing properties, developers and owners are using Hotel feasibility studies, market demand studies, valuations, and appraisals.

Feasibility Assessment

2007-05-23T02:05:00.000-07:00

Elements of Feasibility Assessment

A quick overview of the main points of the assessment to give picture of the proposal along with the recommendations
Background information of the business proposition
Description of the business idea
Advantages and disadvantages of the business idea
The potential market for the product
Financial analysis
Risk analysis
Comparative analysis of alternatives
Recommendation of preferred alternative, decision to proceed or not to proceed

Restaurant Feasibility Study

2007-05-22T09:01:00.000-07:00

Restaurant Feasibility Study:

Industry Statistics of Food Services and Drinking Places

Nearly 560,000 businesses in the US are classified as eating places
In the US, nearly 7 million persons are employed in the restaurant industry
According to the NRA, in the US, the average full service restaurant sales in 1999 were $625,000 and $572,000 for limited service restaurants

Food Service Industry Trends

In year 2000, the average annual household expenditure for food away from home was $2,137 ($855 per person).
Characteristics that influence the decision to purchase food away from home are income, age, and family composition.

Franchise Feasibility Test

2007-05-22T08:40:00.000-07:00

Steps of Franchise Feasibility Test

To determine the feasibility of your business to be developed as a franchise, there are several factors to consider:

Track Record. (Your business should at least have five years of establishment)
Experience of the business managers
The number of locations / branches
The average net profit of the business
The frequency of repeat customers
The radius of attracted customers
The starting capital available to develop the franchise concept
Business management experience of the managers
The start-up investment requirements for the franchisees
The training requirements for the franchisees
International adaptability
Business competitiveness in the industry
Number of franchising inquiries received

Small Business Planning

2007-05-11T01:11:00.000-07:00

Small Business Planning

Strategic planning is not only for big businesses, but also applicable to small businesses.

Strategic planning is comparing the strength of the business to available opportunities. To do this, we need to:

Collect, screen, and analyze information about the business environment
Understanding the strengths and weaknesses of the business
Develop mission, goals, and objectives

Business Feasibility Study Terms

2007-05-03T22:47:00.000-07:00

Project Period / Duration
= as long as the project operates
= its economic period = as long as it can operate efficiently (can minimize cost)
= if the period is very long (more than 50 years) --> assumed to be only 50 years or even shorter, since it's df will be very small

Opportunity Cost
The net benefit created if resources are used in the other possible and best economic activity, since they have already been used in certain chosen project.