The feasibility studies examine the practicability of a proposal, business venture or project. Its main goal is determining if the project or idea have sense to continue or not. The term “feasible” describe an action that is likely or possible to happen or achieve. Feasibility studies means the total of the actions you take and the questions you ask to determine if the idea or projects, is likely to succeed. In addition, find out whether a company has enough money for a project, whether a product will sell or see if there are enough human resources for the project. In a good feasibility study, strengths and deficits are shown before a project is planned and implemented. By doing so, enterprises can save money and resources in the long term by avoiding projects and resources that are not feasible. It also helps in recognizing the potential cash flow.
Uncertainty is a constant that every business of every size face daily. Changing, adapting and incorporating new products or ideas into business, help enterprises in reduce some of the uncertainties thanks to the right and proper planning. You need a detailed understanding of your product or service, the industry you will be competing in, the nature of the market and the amount of capital needed to start the process or business idea. There are many different types of feasibility studies, here after the most common:
- Technical: looking at if the company have enough technological resources to undertake the project;
- Schedule: understanding if the implementation of the project or idea, have enough time to be implemented;
- Economic: projects must be implemented if could be completed. The economic feasibility study look is mostly, a cost/benefit analysis;
- Cultural: every projects or new idea implementation, require a change. The cultural implications must be understood like the impact on the local and general cultures;
- Legal: means understanding the legal implications of the projects. Every project must meet all the legal and ethical requirements before the project is implemented;
- Resource: each project needs the right amount of resources for its implementation. Thanks to the analysis, companies can figure out if the project has the necessary resource is for its practicability.
A good feasibility study will provide the direction but also the focus of the project by narrowing down all the possibilities. These studies are fundamental because they force companies to consider the big picture and just after, think with a top-down approach. Feasibility analysis will help in get right before committing time, money and business resources to an idea or project that may work or not in the way is originally defined and planned to open a companies’ eyes new possibilities.