If you’re thinking about starting a business, it may be too early to develop a full business plan. It might make sense to carry out a Feasibility Analysis first to determine if the business venture has merit.
The analysis provides a high-level evaluation of your business concept. It determines if your idea for starting or expanding a business is viable and worth pursuing. If that’s the case, you can then start putting in the time and effort to develop a business plan. The insight from a feasibility study also helps you to figure out which aspects of your business venture need fine-tuning.
On the other hand, the analysis could show that your idea is not very promising and that you need to go back to the drawing board. It may even be advisable to abandon the idea altogether.
If the business venture has little chance of becoming successful, the feasibility analysis can save you the time, money, and aggravation of developing a business plan.
Elements of a Feasibility Analysis
Analyzing the viability of your business concept takes a comprehensive look at these aspects:
- Business Model – The basic business concept, the products and services the business is planning to sell, as well as sales and distribution channels. In essence, this deals with how the business expects to make money.
- Markets – A high-level evaluation of market potential, prospective buyers, target markets, potential competition, and sales forecasts.
- Operations and Technology – An assessment of how the firm plans to manufacture and delliver its products as well as service delivery. In addition, the technology needed for production and business processes.
- Financials – This involves the development of high-level sales forecasts and pro-forma financial 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.
- Organization – Review of the internal organization and legal structure of the firm. Employee headcount and employee skills and training required for business start-up and for the initial growth phase.
We can help you determine if your business venture is worth pursuing. Once the feasibility study shows that it has merit, we can support you with the development of a sound business plan.