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 Study first to determine if the business idea has merit.
A feasibility analysis provides a high-level evaluation of your business concept. The goal is to determine if your idea for starting or expanding a business is viable and worth pursuing. If it is, 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 determine which aspects of your business model may need fine-tuning.
On the other hand, the feasibility study could show that your idea is not very promising and that you need to go back to the drawing board. Perhaps you need to consider abandoning the idea altogether.
If the business concept has a poor chance of being successful and cannot be fixed, the feasibility evaluation will save you the time, money, and aggravation of developing a business plan.
Elements of a Feasibility Study
A feasibility study will take a comprehensive look at these aspects:
- Business Model – The basic business concept, the products and services the business plans 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 estimations.
- Operations and Technology – An analysis of how the firm plans to deliver its products and services, the manufacturing process, and service delivery. In addition, the technology needed for production and business processes.
- Financials – A development of high-level sales forecasts and a pro-forma P&L statement. Also, the startup capital needed, potential funding sources, and whether investors will see a return on their investment.
- Organization – Review of the internal organization and legal structure of the firm. Also, employee headcount and employee skills and training required for business start-up and for the initial growth phase.
We can help you evaluate the viability of your business idea. Once the feasibility study has been completed and assuming that your concept has merit, we can support you with the development of a sound business plan.