“A feasibility study is an analysis that takes all of a project’s relevant factors into account – including economic, technical, legal, and scheduling considerations – to ascertain the likelihood of completing the project successfully.”
In essence, a feasibility study is an assessment of whether it is practical to proceed with the launch of a new product, a new service or a new business.
In our case, an ACRA~BizPlan™ Feasibility Study can mean either of two things:
Related to production, distribution and intellectual rights
– an evaluation of whether the launch of a new (innovative) product or service idea is practical or “feasible”.
– This usually concerns finding answers to many unknowns such as: the availability of technology to produce it, the cost of such production, the legal implications in making the product available, the duration of its developmental stages and other key questions.
Related to marketing, financials and profitability
– an evaluation of whether the launch of a similar type product or service in an existing market is going to be viable (sustainable).
– For example, how many more similar retailers can the market sustain over the next 5 to 10 years? How are we going to take market share away from these competitors? If we launch an outlet, what kind of pedestrian traffic can we expect and what kind of sales can we achieve? At which point will we break-even? What profit margin is acceptable? How long do we need to operate before we can expand to 3 outlets? How much money will we have in the bank by then? When will we require external funding for expansion?
Why is a feasibility study so important?
Answers to questions such as those above are vital for success, which a Feasibility Study can reveal. It would seem unreasonable why new businesses should not pursue such answers before launching.
Normally an enterprise would undertake a feasibility study for a new or innovative product since this is an obvious thing to do. Without such a plan, there are just too many unknown risks for the business.
But few new businesses would consider having a feasibility study on its marketing and financial prospects despite the fact that information from such a study can be highly useful in fine-tuning pricing, distribution, sales and product line strategies; departmental planning; customer service; product quality and branding.
Having just some of these questions answered will minimise the number of risks drastically and will bring success closer to home.
Most of the time, business people are surprised to see that the findings from such a study totally contradict their own expectations and estimation. But by the time they discover this from an outside report, it is usually too late.
Value of an ACRA~BizPlan™ Feasibility Study
A study can be designed to one’s needs and goals. It can help the enterprise to:
– confirm strategic, marketing and financial viability – expose unknown threats and hidden weaknesses – ascertain customer acceptance of proposed product or service – provide useful input for developing contingency plans – ascertain sale revenue and financials more precisely – and other questions management might want answers to