Evaluate Your Business Idea With A Feasibility Study
Determine the viability of your business concept with a feasibility analysis
If you’re thinking about starting or expanding a business, it may be too early to develop a complete business plan. At this early stage, a feasibility study may be worthwhile to see if your idea for a B2B venture is worth pursuing in the first place, before embarking on developing the full business plan.
Analysis of Your Business Idea
A feasibility study provides a relatively high-level evaluation of a business concept. It determines if your idea for starting or expanding a business is viable and worth pursuing. Think of the feasibility study as an initial ‘sanity check’ of your business concept.
We can help you evaluate your business idea, identifying the strengths of your concept and where your business model needs to be revised.
The feasibility study might show that your idea is not viable and that you need to go back to the drawing board. One possible conclusion could be that it is best to abandon the idea altogether because, frankly, it’s just a ‘bad idea’.
If the business idea has little chance of becoming successful, the feasibility study has saved you the time, money, and aggravation of developing a complete business plan.
Often, entrepreneurs are so enamored with their business idea that they are unable to step back and evaluate the viability of their concept objectively.
We conduct an objective feasibility analysis of your business concept. If it looks like the greatest thing since sliced bread, we’ll tell you. If it’s not, we’ll tell you as well and we’ll provide recommendations for fixing the concept.
Elements of a Feasibility Analysis
To determine viability, the analysis covers many important facets of your business venture, such as:
What are the goals and objectives for the business?
What is your personal motivation for starting the business?
If you lack a deep motivation and a strong drive to launch your business venture and to make it successful, you can save yourself a lot of trouble by recognizing that earlier rather than later.
This part of the feasibility deals with taking a look at the customer problem you're trying to solve.
Without customers you don't have a viable business.
Have you identified a clear need in the market place that you are best positioned to address? Which customers are not well served or underserved that present an opportunity for your firm?
It's important to have a least a basic understanding of who your customers will be and why.
This involves an initial evaluation of market potential, target markets, number of prospective buyers, market size, and market growth rate to determine if there's a viable, profitable market.
It all comes down to the question "Are you going to be able to make money?"
What do you plan on selling to your target market(s)?
Do you have a clear concept of what your firm will be offering to your customers?
This aspect of the feasibility study deals with looking at the substitutes available to customers.
These could range from competitive products to do-it-yourself solutions and work-arounds.
The feasibility study helps you to understand this better and what it means for your business.
You always have competition. If it's not buying from a competitor, it may be a customer deciding to not spend any money at all and just do nothing.
The feasibility study looks at the competitive environment that impacts the viability of your business idea.
How do you plan to stand out from the competition in a dynamic, business environment. What is unique about your business?
This is tied directly to your business venture's ability to attract customers and make money.
Pricing has a direct impact on your bottom line.
Price too low and you leave money on the table. Price too high and you miss out on the sale.
Pricing also plays an important in your firm's positioning and branding.
Here, we'll take a look at how you plan to manufacture your products and deliver your services.
What equipment, tools, and processes do you need? How many people do you need?
There are cost and profitability considerations. Quality, differentiation, and branding are also affected.
You need to think about your Sales & Marketing activities, systems, and processes.
How many people will be involved? Who will be doing what? How to create awareness and attract customers?
Obviously, this a key part of the feasibility analysis to determine if your business venture will be successful from day one or whether it's going to be a struggle to become profitable.
You need to be aware of important trends, good or bad, that may impact the business.
These could be technological, regulatory, environmental, societal, or political trends.
Positive trends you may want to take advantage of. Negative trends may require some kind of contingency plans.
Think about what could go wrong and what the consequences might be for your startup.
Are there internal and external risk factors that you need to be aware of?
Creating sales forecasts and proforma financials for your start-up is very important.
This facet of the feasibility analysis will show if your business venture is likely to become profitable and how quickly. If there are problems with your business model the financial analysis will quickly show that.
This aspect of the feasibility study reviews the proposed organizational study and the experience of the management team that will be leading the venture.
The review includes looking at staffing and training needs for taking the business venture through the start-up phase.
Feasibility Study Report
Upon completion of the feasibility study, you’ll receive an analysis report highlighting strengths, weaknesses, and our recommendations.
The feasibility report will include an opinion about whether the business concept is worth pursuing and if it makes sense to go ahead with formal business planning.
If the business concept does appear to be viable, the knowledge gained from the feasibility study is an excellent starting point for full-fledged business planning.
No Guarantee of Success
It’s important to keep in mind that the feasibility study is a high-level analysis of the viability of a business concept. There is no iron-clad guarantee that the conclusion of the feasibility study, favorable or unfavorable, is an accurate predictor of the venture’s future. Just like a sound business plan does not guarantee success, but it’s a good start.
Even a brilliant business idea can still fail in execution due to poor management, lack of funding, unforeseen events in the marketplace, and of course just plain bad luck. On the flip side, a not-so-great idea that’s pursued anyway can become successful in the hands of an experienced management team.
Nevertheless, a feasibility study is a sound way to take an honest look at the viability of your business concept, especially if there’s a lot at stake.
Interested? Let’s Talk
To learn more about how a feasibility study provides insight into the viability of your business idea or for a no-obligation, confidential conversation about your business, please contact us.Contact Us