A feasibility study evaluates the viability of a new business idea or expansion by examining its economic, financial, technical, legal, market and management aspects. It helps determine if an idea can generate adequate profits and cash flow while withstanding risks. The objectives are to answer if the project is feasible and should proceed. A feasibility study report includes defining the problem/opportunity, project description, expected benefits, resource needs and alternatives. It provides valuable information for deciding whether to move forward with a project idea.

1. MANAGING Tough Times
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SCHOOL OF MANAGEMENT STUDIES
FEASIBILITY STUDY

2. MANAGING Tough Times
What is a Feasibility Study
Is this a good business idea?
Helps answer the question of
whether to go forward with the
business idea.
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SCHOOL OF MANAGEMENT STUDIES

3. MANAGING Tough Times
A feasibility study is valuable for:
• Starting a new business
• Expansion of an existing business
• Adding an enterprise to an existing
business
• Purchasing an existing business
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SCHOOL OF MANAGEMENT STUDIES

4. MANAGING Tough Times
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SCHOOL OF MANAGEMENT STUDIES
Definition of Feasibility Study
Definition 1 : “A feasibility study looks
at the viability of an idea with an
emphasis on identifying potential
problems and attempts to answer one
main question: Will the idea work and
should you proceed with it?”

5. MANAGING Tough Times
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SCHOOL OF MANAGEMENT STUDIES
What is a Feasibility Study
Definition 2 : “A feasibility study is an
evaluation of a proposal designed to
determine the difficulty in carrying out a
designated task. Generally, a feasibility
study precedes technical development
and project implementation.”

6. MANAGING Tough Times
Objectives of Feasibility Study
A feasible business will:
• Generate adequate cash flow and profits,
• Withstand risks,
• Remain viable in the long-term
• Meet the goals of the founders
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SCHOOL OF MANAGEMENT STUDIES

7. MANAGING Tough Times
Elements of Feasibility Study
1. Economical Feasibility Study
2. Financial Feasibility Study
3. Technical Feasibility Study
4. Legal and Political Feasibility Study
5. Market Feasibility Study
6. Management Competency Study
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SCHOOL OF MANAGEMENT STUDIES

8. MANAGING Tough Times
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SCHOOL OF MANAGEMENT STUDIES
Feasibility Study Report includes
1. Project name
2. Problem or opportunity definition
3. Project description
4. Expected benefit
5. Consequence of rejection
6. Resource requirements
7. alternatives
8. Other consideration

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Reasons Not to do a Study
• We already know it is feasible.
• We did a study a couple of years ago.
• Just a way for consultants to make money.
• The company selling us the equipment says
it is feasible.
• Lets hire a general manager and have him
do the study.
• Waste of time – we need to buy the site and
begin construction.
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SCHOOL OF MANAGEMENT STUDIES

10. MANAGING Tough Times
Reasons to Do a Study
• Gives focus to the project.
• Narrows the business alternatives.
• Identifies new opportunities.
• Identifies reasons not to proceed.
• Provides valuable information for “go/no go”
decision.
• Increases probability of business success
by identifying weaknesses early.
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SCHOOL OF MANAGEMENT STUDIES

11. MANAGING Tough Times
Reasons to Do a Study
• Provides documentation that the idea was
thoroughly investigated.
• Helps attract funding from lenders, grant
providers, etc.
• Helps attract equity investment
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SCHOOL OF MANAGEMENT STUDIES

12. MANAGING Tough Times
Not the Business Plan
• Feasibility study conducted before
decision to proceed (go/no go).
• Business plan prepared after decision
to proceed (go/no go).
• Feasibility study provides investigative
function.
• Business plan provides planning
function.
SNIST
SCHOOL OF MANAGEMENT STUDIES

13. MANAGING Tough Times
Thank You
SNIST
SCHOOL OF MANAGEMENT STUDIES