7 Key Elements of a Feasibility Study
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.
