If you’re thinking about starting or expanding a business, it may be too early to develop a business plan. At this early stage, you should do a feasibility study first to see if your business idea is worth pursuing in the first place, before you start working on the business plan.
Carry Out a Feasibility Study of Your Business Idea
A feasibility study provides a quick, 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. It’s more detailed than a ‘back-of-the-envelope’ evaluation, but less than the comprehensive analyses that would be part of formal business planning.
We can help you determine if your concept is worthwhile by carrying out a feasibility study. The feasibility analysis identifies the strengths and weaknesses of your concept and where your business model needs work.
The feasibility study might show that your idea is not viable and that you need to go back to the drawing board. It may even be advisable to abandon the idea altogether.
If the business idea has little chance of becoming successful, the feasibility study has saved you the time, money, and aggravation of developing a business plan.
Elements of a Feasibility Analysis
The analysis covers many key facets of your business venture, such as:
- Business Model – This involves looking at the fundamental customer problems you are trying to solve and how. The key question that needs to be answered: “how is the business going to make money”?
- Products and Services – Comprehensive review of what you’ll be selling.
- Market Demand – A high-level evaluation of market potential, prospective buyers, target markets, market size, and market growth.
- Competition – This aspect of the feasibility study reviews existing and potential future competitors and their position in the marketplace. This analysis will also take a high-level look at potential substitutes.
- Operations and Technology – An assessment of how the firm plans to manufacture and deliver its products as well as service delivery. In addition, the technology needed for production and business processes.
- Financial – This is a key facet of the feasibility study. It involves creating sales forecasts and proforma profit-and-loss statements. Also, any capital needed, potential funding sources, and whether investors will see a return on their investment are included in this part of the analysis. In essence, the important question that needs to be answered: “Will the organization be able to make money in a sustainable way?”
- Organization – Review of the internal organization, legal structure of the firm and human resources. Employee headcount and employee skills and training required for the business start-up and for the initial growth phase.
Upon completion of the feasibility study, you’ll receive a comprehensive report. This report highlights the strengths and weaknesses of your business concept and which aspects of the business idea need to be developed further.
Also, the feasibility report will include an opinion about whether the business concept is worth pursuing and if you should go ahead with formal business planning.
To learn more about our business concept planning feasibility study services, or to schedule a free, no-obligation conversation about your business idea, please contact us.