2. FEASIBILITY STUDY
Afeasibility study is valuable for
Starting a new business
Expansion of an existing business
Adding an enterprise to an existing business
Purchasing an existing business
A feasible business will
Generate adequate cash flow and profits,
Withstand risks,
Remain viable in the long-term
Meet the goals of the founders
3. Project feasibility analysis results adequate
formation of the project in terms of location, production
technology, production capacity, material input, etc., and
contains fairly specific estimates of project cost, means of
financing, sales revenues, production costs, financial
profitability and social benefits.
4. FEASIBILITY STUDY OUTLINE
Description of the Process
• Identification and exploration of business scenarios.
• Define the project and alternative scenarios.
• Relationship to the surrounding geographical area.
Market Feasibility
• Industry description.
• Industry competitiveness.
• Market potential
• Access to market outlets.
• Sales projection
5. Technical Feasibility
• Determine facility needs.
• Suitability of production technology.
• Availability and suitable of site.
• Raw materials.
• Other inputs.
Financial/Economic Feasibility
• Estimate the total capital requirements.
• Estimate equity and credit needs.
• Budget expected costs and returns.
6. Organizational/Managerial Feasibility
The managerial feasibility involves the capability of the
infrastructure of a process to achieve and sustain process
improvement.
Management support
Employee involvement
Commitment
Cultural feasibility
It deals with the initial acceptance of the project with the
cultural set-up of the project environment.
Religion, custom-lifestyle, etc.
7. Political feasibility
• Deals with the initial acceptance of project and
sustenance of the project in the long-run by the prevailing
political system.
• Political interventions may arise due to land from
agriculture use to industrial use, air pollution, water
pollution, possible un employment due to hi-tech projects,
etc.
