School of Information Systems

Feasibility Study


           A feasibility study is an analysis of how successfully a project can be completed, that affect several areas such as economic, technological, legal and scheduling factors. Project managers use feasibility studies to determine potential positive and negative impact of a project before investing a considerable amount of time and money into it.

           Feasibility studies allow companies to determine and organize all of the necessary details to make a business work. A feasibility study helps identify logistical problems, and nearly all business-related problems, along with the solutions to alleviate them. Feasibility studies can also lead to the development of marketing strategies that convince investors or a bank that investing in the business is a wise choice.

Components of a Feasibility Study

There are several components of a feasibility studies

  1. Market Analysis / Market Feasibility Report

         Market Analysis determines the depth and condition of a particular market and its ability to support a particular development. The key concern of a market feasibility study is a project’s ultimate marketability. In short, it determines whether a product or service can sustain in a specific market or not as well whether it is capable of generating financial surplus for the firm or not.

            Things to include in a Market Analysis :

  1. Description of the industry
  2. Current market analysis
  3. Competition and Competitor
  4. Anticipated Future Market Potential
  5. Potential Buyer and Source of Revenues
  6. Sales Projections

            Several process in Market Analysis :

  1. Analyze the Market
  2. Identify the site
  3. Develop Market Strategy and Concept
  4. In – depth finansial study
  5. Analysis of cash flow,etc

2. Economic Analysis

  A financial feasibility study is an assessment of the financial aspects of something. If this case, for starting and running a business. A financial feasibility study can focus on one particular project or area, or on a group of projects (such as advertising campaigns). However, for the purpose of establishing a business or attracting investors.

Three key things in financial feasibility study :

  1. Start up capital requirements.

-> Analyze how much cash you need to start your business and keep it running.

  1. Start up Capital Sources

-> Analyze how to Finding Start-Up Capital Funding Sources

  1. Potential Returns for Investor

-> Give details about how your business will make profits, when it will begin to make profits, how much profit it will make, and what investors will gain from their investment.

  1. Technical / strategic analysis

            The Technical Feasibility Study assesses the details of how you will deliver a product or service (i.e., materials, labor, transportation, where your business will be located, the technology needed, etc.). A technical feasibility study is a tool for analyze long-term planning. In some regards, it serves as a flow chart of how your products and services grow and move through your business to physically reach your market.

Basic things that most businesses need to include in their technical feasibility study include:

  1. Materials
  2. Labor
  3. Transportation or Shipping
  4. Physical Location
  5. Technology
  1. Performance Specification

            A performance specification is a document that specifies the operational requirements of a component or installation. Simply put, a performance specification tells the contractor what the final installed product must be capabel of doing. The general concept behind the performance specification is for the designer or engineer to know what their client need, and then the designer will determine the best way to get there. The performance specification focuses on the outcome as well as a portion of the design work.

Alvian Shanardi