Organizations conduct analyses to make informed decisions about new projects, from startups to enterprise firms. Learn more about the components of a feasibility study.
What Is a Feasibility Study?
A project feasibility study is an examination of the viability and likelihood of success of a project or new business idea. Cost, profitability forecasts, market analysis findings, technical requirements, government regulations, and scheduling or timeline constraints are all factors to consider in a feasibility study. Businesses conduct feasibility studies to determine whether or not to develop a new product or enter an untapped market; they begin with a preliminary analysis before conducting a full feasibility report.
The Benefits of a Feasibility Study
A feasibility study has several advantages because it requires project managers and participants to consider potential project obstacles before proceeding, allowing them to make informed decisions about the best approach. Furthermore, a feasibility study assists the team in determining early on whether a project requires too much time or too many resources for the expected benefits.
7 Key Elements of a Feasibility Study
Key elements to include when creating a feasibility study template based on your company's needs are:
1. A brief executive summary: The majority of feasibility reports begin with an executive summary, which is a brief summary of the entire report for key leadership. The summary includes a brief description of the project scope, the study and findings, and a specific recommendation from the team (condensed into a "go/no-go decision"—whether to start the project, significantly change its focus, or postpone it for the time being).
2. Specifics about the proposed project: A feasibility analysis should include a detailed description of the product or service that the team intends to use, as well as a list of potential deliverables and the project plan.
3. Economic considerations: Consider any economic obstacles or variables that would impact the project's success or viability, such as cost, company cash flow, financial resources, target market demographics, market research findings, sales and marketing strategy, and financial projections such as revenue, return on investment, and upkeep costs, when evaluating the project's economic feasibility. To summarize these financial feasibility findings and demonstrate how the project supports the overall business plan, include a balance sheet, projected income statement, or cost-benefit analysis.
4. Legal feasibility: Take into account any legal requirements or variables that may have an impact on the project, such as government regulations, zoning, or shipping requirements.
5. Organizational considerations: To determine operational feasibility, compare the organizational structure of your team to the project's requirements. Consider the project's staffing requirements, including management teams and on-the-ground personnel, and whether you have the necessary number of people, organizational bandwidth, and competencies to complete the project successfully. Consider whether you can satisfy any stakeholders or decision-making bodies that may want a final say in the project.
6. Timeline considerations: Determine the project's deadlines and how quickly you can complete it.
7. Technology considerations: Take into account any technological requirements or demands that could affect the project's technical feasibility, such as production and maintenance methods and the technical resources required.