Aspects of Project Feasibility Preparations and Analysis
Reasons to do a Feasibility Study
• Gives focus to the project and outline alternatives.
• Narrows business alternatives
• Identifies new opportunities through the investigative process.
• Identifies reasons not to proceed.
• Enhances the probability of success by addressing and mitigating
factors early on that could affect the project.
• Provides quality information for decision making.
• Provides documentation that the business venture was thoroughly
• Helps in securing funding from lending institutions and other
• Helps to attract equity investment.
Aspects of Project Feasibility
Preparations and Analysis
A. Technical Feasibility - The technical capability of the personnel
as well as the capability of the available technology should be
considered. The Technical Feasibility Study assesses the details of
how you will deliver a product or service (i.e., materials, labor,
transportation, where your business will be located, technology
B. Managerial Feasibility- involves the capability of the
infrastructure of a process to achieve and sustain process
improvement. An Organizational Feasibility Study may also include
professional background information about the founders and
principals of the business and what skills they can contribute to the
C. Economic Feasibility -This involves the feasibility of the
proposed project to generate economic benefits. A benefit-cost
analysis and a breakeven analysis are important aspects of
evaluating the economic feasibility of new industrial projects
D. Financial Feasibility- involves the capability of the project
organization to raise the appropriate funds needed to implement the
proposed project(different from economic feasibility) A financial
feasibility study projects how much start-up capital is needed,
sources of capital, returns on investment, and other financial
E. Cultural Feasibility- deals with the compatibility of the
proposed project with cultural setup of the project environment.
F. Social Feasibility- addresses the influences that a proposed
project may have on the social system in the project environment
G. Safety Feasibility- is another important aspect that should be
considered in project planning. It also refers to an analysis of
whether the project is capable of being implemented and operated
safely with minimal adverse effects on the environment
H. Political Feasibility- A politically feasible project may be
referred to as a "politically correct project. Political considerations
often dictate direction for a proposed project.
I. Environmental Feasibility - Concern must be shown and action
must be taken to address anyand all environmental concerns raised
J. Market Feasibility- Another concern is market variability and
impact on the project.This area should not be confused with the
Economic Feasibility. The market needs analysis to view the
potential impacts of market demand, competitive activities, etc. and
"divertible". The primary area that the feasibility study needs to
address is potential market opportunities, market competition, and
K. Legal Feasibility - The legal feasibility study would determine
whether the proposed project conflicts with legal requirements
L. Socio-Economic Desirability - The social feasibility of its part
would determine the proposed project will be satisfactory for the
people or not. This assumption would in general examine the
probability that the project would have to be accepted by the group
of people that are directly affected by the proposed system.