A feasibility study emphasises the viability of a business venture. It helps identify potential problems in different dimensions like operations, marketing, and finances. The purpose of a feasibility study can be diverse. Businesses can conduct feasibility to start a new venture or introduce a new product. This article by experts of UK dissertation writing services will help you identify the important components of a feasibility study.
Study Other Feasibility Reports
Feasibility study helps to forecast and predict the future. It helps develop and scale the business. But, other businesses, individuals, and entrepreneurs conduct feasibility to study their rivals. Studying other feasibility reports can help you in setting a direction for your feasibility study. It can also help you understand the aspects that must be explored before writing the feasibility study. There are many types of feasibility studies. These include legal feasibility, time feasibility, resource feasibility, operational feasibility, financial feasibility, and commercial feasibility. Understanding these types will help figure out what your feasibility study will look like.
As the feasibility study of other businesses will help you figure out yours, it will also guide your study’s preliminary analysis. It would be best if you started the preliminary analysis by developing an outline of the plan. The outline will shape up the raw ideas in your mind. It implies a plan for what you are looking to achieve and why. The next step in the preliminary analysis is to examine the market space where you will pitch your idea.
Thus, the commercial viability of your plan is important in the feasibility study. Once you are familiar with the commercial viability of the plan, you will get to understand the strengths and weaknesses of your plan. Lastly, the preliminary analysis will highlight the risks associated with your plan. These risks can be in any form, like market risks, financial risks, and operational risks.
Figure Out Details
This part of the feasibility study takes significant effort. Here you will figure out all the nitty-gritty details of conducting the business. This part of the feasibility study should address the target market of the company with respect to the operational and financial requirements of the business. Firstly, compare your product with the existing products in the market. From there, you can identify the unique characteristics of your product/service offerings. Then, you can move to analyse the market conditions.
Market research can help in identifying realistic issues existing in the market. Once you complete your market research, move on to recognising the financial costs of conducting the business. In this process, you must consider all aspects of running a business. From the production process to the marketing efforts and product distribution, you must identify the costs of each operation of your business. In assessing the costs, you can also define the assets and liabilities of the business. There are several liabilities which you must identify at this stage. Liabilities to consider include leasing or purchasing land, capital investments, financing the assets for the business and the receivable accounts of the business. Capital investments can be renting a building for production purposes, buying equipment and tools etc.
Prepare Balance-Sheet for Opening Day
By now, you should be able to recognise the assets, liabilities, expenses, and capital costs related to your business. It will help you to prepare an opening day balance sheet. This balance sheet will differentiate the assets from the liability and initial investments. Canva can be used to find different samples and libraries for it. Including a balance sheet for the opening day will help you create a thorough feasibility study and guide in the future.
With a formal categorisation of all items in the form of a balance sheet in hand, you will be better able to identify any hidden costs. It will allow you to know if there are any risks that you were not aware of previously. You can have a better know your target market and the conditions. A prospective change in the market conditions can also be evaluated at this stage. Lastly, you will know if the operational and economic conditions are the same as you perceived the idea.
Make a Decision
At this stage, you are aware of all the relevant aspects of the business. The operational feasibility of these aspects will allow you to decide on the business idea. Follow the guidance of your feasibility study to make a go/no-go decision. Thus, a feasibility study leads to a decision based on reality and statistics instead of the mere intuition of an individual.