This document outlines the components and process of conducting a feasibility study. It discusses that a feasibility study determines the viability of a project by analyzing key factors such as the plan, costs, funding sources, personnel needs, market potential, and profitability. The study involves researching these components, analyzing the collected data, and formulating conclusions on whether the project is feasible to pursue. If deemed feasible, the study recommends proceeding to develop a full business plan.

1. FEASIBILITY STUDY

2. Feasibility Study
 A feasibility study determines the commercial
viability of any given project

3.  To start your Feasibility Study - start with your
"business idea" on paper.
 Discuss it with others and adjust it as you obtain
more information and ideas.

4. COMPONENTS OF A FEASIBILITY STUDY
1. Plan
2. Cost source of funding
3. Manpower
4. Personnel requirements
5. Market
6. Profitability

5. The Plan
 The project and its objectives should be described in
detail.
 A sketch plan should accompany the description.
 The plan answers the questions what, why, and how
about the project.
 It includes the duration or approximate time to
complete the project.

6. The Cost
 Cost of equipment and facilities needed should be
determined.
 Proponents must canvass at least two or three
suppliers.
 Particulars as to the models and capacities of the
equipment, their availability, and where these could
be purchased should be determined early on.

7. The source of funding
 Project approval is 50% assured if there is a prior
provision for it in the company’s budget.
 If there is no allocation or insufficient, a bank loan
may be considered.
 In this case, the loan amount and its interest must be
factored into the financial documents of the study.
 Realistic income targets from the venture must be
projected.

8.  WORKING CAPITAL
 When calculating how much working capital you need it may
be necessary to allow for up to six months funds.
 This may be due to no sales or low sales, having to extend
credit, buying too much or overheads being higher than
expected.

9. Manpower or Personnel
 The size and particulars of manpower needed for the
project should be noted.
 The personnel’s job descriptions, job titles, and
credential standards should be determined.
 These should be properly set out in any appropriate
organizational chart.
 Salary rates and allowances, if any, should also be
drawn up.

10.  Ask the following questions:
 1. Who will they be?
2. What will be the cost?
3. What are their duties?
4. What training will be required?
5. What alternatives are there?

11. The market
 The stability of the market determines the viability of
projects.
 A survey should be conducted to find out whom the
commercial venture will cater and if there would be
enough customers or clients.

12.  Customers:
 You cannot sell to everyone. So, who are your potential
customers? Make a List.
 Why will they buy from you?
 Identify your Market Segments or groups:
 What knowledge do you have of your market segments or
groups? How many are there?
 What will they buy? How often will they buy? What will be
their average purchase?

13.  Products & Services: Create a list showing the
products / services you will be offering to each
segment. Also look at how long it will take you to
produce or procure them. Determine how much it
will cost to buy or produce them and how much you
can sell them for.

14.  Suppliers: Identify preferred and alternative
suppliers on a list and show products /services /
prices on this list. Collect catalogues and brochures
to assist this study.

15.  Competition: List your competitors and show their
perceived strengths and weaknesses. For each main
competitor, list two good points and two bad points.
You need to understand why they are competition to
your proposed business.
 Ask the Question: How can you attract their
customers from them? Price is not the only answer.

16.  Map: Obtain a map and on it define your market
boundaries, your location, your competitors, your
suppliers, and any demographic information on your
market.

18. Profitability / Benefit
 A 10-20 percent return of investment (ROI) is
usually regarded as profitable enough.
 For socially-oriented undertakings, there is a need to
discuss how a project will benefit a specific group of
people or community.

19. The FS Process
1. Determine purpose and scope of the study.
2. Establish sources of data.
3. Gather and verify information.
4. Undertake data analysis.
5. Formulate conclusions and recommendations.

20. The FS Report
 This reflects the findings and conclusion.
 It defines the study in terms of its objectives and
identifies the factors that determine whether a
project is feasible or not.
 Pertinent data are presented, interpreted, and
summarized.
 The feasibility report provides options: GO or NO
GO.

21. Elements of a FR
1. Title page
2. Abstract
3. Introduction
4. Data Presentation and Discussion
5. Analysis
6. Summary
7. Conclusion
8. Recommendations
9. References
10. Appendix - List of Tables / Figures

22.  Modern-day report writers present FR in this format:
1. Executive summary
2. Introduction
3. Discussion and Analysis
4. Conclusion
5. Recommendation
6. Appendix

23. a) Executive Summary - the main purpose is to gain
the reader's attention.
 Give a brief and clear overview of the key points of
each section of your plan.
 While it is the first section, it is the last to be
written.
 Two pages is more than enough!

24. b) Introduction of Product/Service (description) -
describe the benefits of your product or service from
the customer's point of view.
 What is your product or service? How is it different
from what's already available? If a product, will you
manufacture it and how? Who are your suppliers?
What are your distribution channels?
 Describe patents, trade secrets, or other information.
You must determine if the concept is a working and
tested product or service.

25. c) The Market - is there a market for your idea? Can
this be proven? Describe the size of your market
(both in terms of customers and finances).
 This requires research and is perhaps the most
difficult section, but also most important. What is
your target market? What is your estimated market
share percentage?
 Describe seasonal fluctuations, the potential annual
growth of the total market for your product or
service, and factors affecting that growth.

26. d) Price and Profitability - how will you price your
product or service; at a discount, at a premium or
somewhere in between?
 The gross margin must be high enough to at least
cover your expenses.
 Community businesses do make profit, but its what
they do with the surplus that differentiates them.

27. e) Plan for Further Action - the future!
 Does the feasibility plan show that the idea is
worthwhile? If so then it is time to proceed to the
business plan… What can help me get started?
 Try thinking about the following and make some
notes…

28. Source:
 http://www.togetherworks.org.uk/index.php?q=nod
e/61
 Research and Technical Writing by Portillo et al.