Conduct a Feasibility Study
A feasibility study will give an overview and shed light on the issues related to developing the business or organization. The point of feasibility study is to ascertain any issues that could inhibit the success of the business prior to conduct full blown strategic business planning. In short, a feasibility plan will determine if the idea for a business or organization is worth pursuing. Due to the investment of time and resources required to write a strategic business plan, a feasibility plan may be well worth conducting. In fact, a feasibility study requires gathering much of the same information as would be used in the creation of a strategic business plan.
A feasibility study encompasses three major subjects: market issues, organizational/technology issues and financial issues. Each topic, or area, is researched and analyzed to determine its potential impact on the business and its success.
The portion of the feasibility study that focuses on market analysis will answer questions such as: what is the market and the market size and what kind of growth/potential is predicted for the market. The feasibility study should be as specific as possible. It should identify any common demographic features of market including current, projected and identified need and supply for the product or service. This means that you should detail the number of units that could reasonably sell within a month or year based on variables such as competition, location and the existence of untapped opportunities. Identification of any market issues is the portion of the feasibility that is most essential to predicting success, so it is recommended that this portion be completed first.
Once the market issues have identified/analyzed the next portion that should be addressed is organizational/technical issues. Your analysis should include identifying the organizational structure for your business or organization and key members of the organization and their areas of specialty. This portion of the study should also address the experience needed to manage the business as well as staffing needs.
Next, you should look at the cost and accessibility of technology to success of your organization. This portion of the study should answer if and what technology and technological equipment needs required by the organization, from where the technological resources will be acquired, when it will be acquired and how much it will cost. Another essential aspect of obtaining the technological resources is how the acquisition will be impact your timeline for opening. The more complicated your technologies needs are, the more time and research you will need to spend on analyzing your options, etc.
The final portion of your feasibility study should be devoted to uncovering financial issues. In this portion of the study, you’ll be looking at start-up costs, operating costs, sources of funding, revenue projections and a profitability analysis. Your profitability analysis will be very useful in determining success or failure. This analysis will determine whether you will be able to generate enough revenue to cover expenses and at what point will you start making a profit.
Your feasibility study will provide you with the tools to decide whether or not your business or organizational is profitable. If it does indicate that your plan has the elements for success, the next step would be to create a business plan that will continue the analysis is more detail.