Venture Creation and Management Rusike and Mangachena B-Tech 2024

1. What is a feasibility study?

a. A feasibility study is an assessment of the practicality of a project or system.
b. A feasibility study is an evaluation of a proposal, designed to determine the difficulty in
carrying out a designated task.
c. A feasibility study is a comprehensive analysis conducted to assess the viability and
practicality of a proposed project or course of action.
d. A feasibility study is a controlled process for identifying problems, opportunities;
determining objectives, describing current situations and successful outcomes, and assessing
the range of costs and benefits associated with several alternatives for solving a problem. In
other words, it is the initial justification needed to determine or discover if a business is “do-
able”. Feasibility analysis is the process of determining whether a business idea is viable or
not. It is also called an economic assessment or cost benefit analysis of a business.
e. Formal definition: A project feasibility study is a comprehensive report that examines in
detail the five frames of analysis of a given project. It also takes into consideration its four
Ps, its risks and POVs, and its constraints (calendar, costs, and norms of quality). The goal is
to determine whether the project should go ahead, be redesigned, or else abandoned
altogether. (Mesly, Olivier. 2017)

Keywords
i. Assessment = evaluation = comprehensive analysis
ii. Practicality
iii. Viability
iv. Designed
i. Assessment: The process of examining a problem to determine its cause, severity, and
course (direction) which is necessary to design an effective intervention plan. Assessment
is done at all levels of practice (Garthwait, 2012).
It is the systematic collection of collecting empirical data (knowledge, skill, attitudes, and
beliefs), reviewing (identify weaknesses and strengths), and using the empirical data for
the purpose of improving learning and development.
ii. Practicality: quality of being suitable for a particular occasion or use (Cambridge
Dictionary).
Practicality: the quality of being adapted or designed for actual use; usefulness or
convenience.
iii. Viability: refers to the ability of an entity to survive and reproduce in a given
environment.
iv. Designed: means it is structured, it has form, protocols, and methods and modes of
execution.

Understanding the formal definition

Formal definition: A project feasibility study is a comprehensive report that examines in detail
the five frames of analysis of a given project. It also takes into consideration its four Ps, its risks
1
Venture Creation and Management Rusike and Mangachena B-Tech 2024

and POVs, and its constraints (calendar, costs, and norms of quality). The goal is to determine
whether the project should go ahead, be redesigned, or else abandoned altogether. (Mesly,
Olivier. 2017).

Feasibility Study Structure

In order to understand the formal definition, and what a feasibility study really is, it is necessary
to outline the structure of a feasibility study so that the relevance of the five frames, four P’s,
risks and POV’s may be clearly understood.
The structure of a feasibility study may vary depending on the type and scope of the project, but
generally it consists of the following sections:
 Executive summary: A brief overview of the project, its objectives, and its feasibility.
 Description of product/service: A detailed description of the proposed product or
service, its features, benefits, and target market. This as a component is product
feasibility.
 Technology considerations: An analysis of the technical requirements, resources, and
capabilities needed to develop and deliver the product or service.
 Product/service marketplace: A market research and analysis of the demand,
competition, and opportunities for the product or service.
 Marketing strategy: A plan for how to promote, distribute, and sell the product or
service to the target market.
 Organization/staffing: An outline of the organizational structure, roles, responsibilities,
and skills required for the project team.
 Schedule: A timeline of the project phases, milestones, and deliverables.
 Financial projections: A financial analysis of the costs, revenues, and profitability of the
project, including a break-even and sensitivity analysis.
 Findings and recommendations: A summary of the main findings of the feasibility
study, the strengths and weaknesses of the project, and the recommendations for whether
to proceed, modify, or abandon the project.
The Four P’s, POVs and Risks
The four Ps, POVs, and risks are components of the feasibility analysis that are used to evaluate
the project from different perspectives. They are not necessarily separate sections of the
feasibility study, but rather they are integrated into the relevant sections. For example:
The four Ps are the key factors that influence the feasibility of the project. They are: plan,
processes, people, and power¹. Each P represents a different element of the project, such as its
scope, methods, stakeholders, and governance. The four Ps are considered throughout the
feasibility study, especially in the sections of technology considerations, product/service
marketplace, marketing strategy, organization/staffing, and financial projections.
The POVs are the points of vulnerability of the project. They are the internal weaknesses or
threats that can affect the project's performance and outcomes. They differ from risks in the sense
that they can be controlled or eliminated by the project team¹. Examples of POVs are: lack of
2
Venture Creation and Management Rusike and Mangachena B-Tech 2024

skills, poor communication, or technical glitches. The POVs are identified and addressed in the
sections of technology considerations, organization/staffing, and schedule.
The risks are the external uncertainties or challenges that can affect the project's feasibility. They
are divided into eight categories, based on the four Ps: financial and organizational (plan),
environmental and technological (processes), marketing and sociocultural (people), and legal and
political (power)¹. Examples of risks are: market fluctuations, natural disasters, or regulatory
changes. The risks are assessed and mitigated in the sections of product/service marketplace,
marketing strategy, and financial projections.
The Five Frames
The five frames of analysis are the main dimensions of the feasibility study. They are: the frame
of definition, the frame of contextual risks, the frame of potentiality, the parametric frame, and
the frame of dominant and contingency strategies². Each frame covers a different aspect of the
project, such as its objectives, environment, benefits, costs, and alternatives. The five frames of
analysis are not necessarily separate sections of the feasibility study, but rather they are
overarching themes that guide the structure and content of the feasibility study. For example:
 The frame of definition defines the project's scope, goals, and expected outcomes. It
corresponds to the sections of executive summary and description of product/service.
 The frame of contextual risks identifies the external factors that can affect the project's
feasibility, such as market, competition, technology, and regulation. It corresponds to the
sections of product/service marketplace and marketing strategy.
 The frame of potentiality evaluates the potential benefits and impacts of the project,
such as social, environmental, and economic. It corresponds to the sections of
product/service marketplace, marketing strategy, and financial projections.
 The parametric frame estimates the resources and costs required for the project, such as
time, money, and personnel. It corresponds to the sections of technology considerations,
organization/staffing, schedule, and financial projections.
 The frame of dominant and contingency strategies proposes the best course of action
for the project, as well as alternative options and scenarios. It corresponds to the section
of findings and recommendations.

2. Importance of a feasibility study to an entrepreneur

a. Assessing Viability: A feasibility study helps entrepreneurs determine the viability of
their business idea or project. Viability refers to the ability of something to work
effectively or be successful. It provides an objective evaluation of the potential success or
failure of the venture by considering various factors such as market demand, competition,
financial projections, and technical feasibility. This helps entrepreneurs make informed
decisions about pursuing the idea or making necessary adjustments before investing
significant time and resources.
b. Identifying Risks and Challenges: Feasibility studies identify potential risks,
challenges, and obstacles that entrepreneurs may encounter during the implementation of
3
Venture Creation and Management Rusike and Mangachena B-Tech 2024

their project. By recognizing these factors in advance, entrepreneurs can develop

strategies to mitigate risks, overcome challenges, and improve the chances of success.
This proactive approach enhances the overall project planning and management process.
c. Market Evaluation: The study involves evaluating the target market, assessing the
demand for the product or service, and identifying existing competitors. This helps
determine the long-term sustainability of their business ideas.
d. Financial Analysis: It involves estimating the costs associated with initiating and
operating the business, as well as projecting the expected revenue. These estimates
provide insights into the financial viability of the business idea.
e. Technical Evaluation: The study evaluates the technology, equipment, and infrastructure
required for the business operations.
f. Legal Compliance: It involves assessing the laws and regulations applicable to the
business and determining whether the entrepreneur can meet these requirements.
g. Roadmap Creation: A well-conducted feasibility study provides entrepreneurs with a
clear roadmap for initiating and managing their businesses. By identifying key resources
such as capital, labor, technology, and infrastructure, entrepreneurs can develop a realistic
plan that increases their chances of success.
h. Attracting Investors and Partners: A comprehensive feasibility study can be
instrumental in attracting investors and partners to the business. By presenting credible
data that demonstrates the viability of the business idea, entrepreneurs can instill
confidence in potential investors and partners, making them more likely to invest in the
venture
i. Time and Cost Savings: It helps avoid commitment of business resources, time, and
money to a business idea that may not work as planned.

3. Major Components of a feasibility study

a. Executive Summary h. Operational Analysis

b. Project Description i. Organizational feasibility
c. Product or Service Feasibility j. Risk Assessment
d. Market Analysis k. Environmental and Social Impact
e. Technical Feasibility Analysis
f. Financial Analysis l. Conclusion and
g. Legal and Regulatory Recommendations
Considerations

a. Executive Summary:

4
Venture Creation and Management Rusike and Mangachena B-Tech 2024

The executive summary serves as an overview of the entire feasibility study. It provides a
concise summary of the key findings, conclusions, and recommendations of the study. It is
designed to give readers a quick understanding of the project's feasibility without requiring them
to read the entire study
b. Project Description:
This component provides a detailed description of the project, including its goals, objectives, and
deliverables. It outlines the scope of the project, the problem it aims to solve, and the desired
outcomes. It also includes information about the project's timeline, resources, and any specific
requirements or constraints that need to be considered.
c. Personal Feasibility:
Personal feasibility is a process of assessing one’s own personal strengths and weaknesses,
abilities and capabilities, potential, values, virtues and ethics. After self-analysis for the purposes
of self-awareness, one ends up understanding his/her attitudes, personality and
behaviors/behavioral traits. Leading to the conclusion of whether there is a need for change, a
capability for adaption or evolution and/or to let go of the venture idea. It consists of
understanding one’s own passions, purpose, mission and vision of life.
d. Product/service feasibility.
Product/service feasibility analysis is an assessment of the overall appeal of the product or
service being proposed. It assesses the current price of the product or service on the market and
helps the entrepreneur to develop a proper pricing strategy that attracts customers and ensures
fair profits at the same time.
e. Market Analysis (Feasibility):
The market analysis assesses the current market conditions, industry trends, target customers,
and competitors. It examines the demand for the proposed product or service, identifies market
gaps or opportunities, and analyzes the competitive landscape. This component helps determine
the potential market size, market share, and growth prospects for the project.
f. Technical Feasibility:
It is the process of assessing whether it is technically possible to manufacture a product or
service. The technical feasibility component evaluates the technical requirements and feasibility
of implementing the project. It examines the technology, infrastructure, resources, and expertise
needed to develop and operate the project successfully. It also considers any potential technical
risks or challenges that may arise and evaluates the project's compatibility with existing systems
or processes.
g. Financial feasibility:
This component involves analyzing the financial aspects of the project, including the initial
investment required, operating costs, revenue projections, and potential return on investment. It
also includes conducting a cost-benefit analysis to determine if the project is financially viable.

5
Venture Creation and Management Rusike and Mangachena B-Tech 2024

h. Legal and Regulatory Considerations (Feasibility):

This component examines the legal and regulatory factors that may impact the project. It
includes an analysis of relevant laws, permits, licenses, certifications, and compliance
requirements. It identifies any legal or regulatory barriers that need to be addressed for
successful project implementation and assesses the project's compliance with applicable
regulations.
i. Operational Analysis (Feasibility):
The operational analysis evaluates the operational requirements, processes, and resources needed
to run the project effectively. It includes an assessment of staffing needs, training requirements,
supply chain management, logistics, and quality control. This component helps ensure that the
necessary operational capabilities are in place to support the project's successful execution
j. Organizational feasibility:
This component assesses the organizational structure and capabilities of the project team. It
includes evaluating the skills and expertise of the team members, identifying any potential gaps
or weaknesses, and determining if the team has the capacity to successfully implement the
project.
In other words, a project could be operationally feasible (it can be smoothly integrated into
current operations) but not organizationally feasible (it doesn’t align with the strategic goals or
the organization lacks the necessary resources for implementation), and vice versa.
k. Risk Assessment:
The risk assessment component identifies and analyzes potential risks and uncertainties
associated with the project. It includes risk identification, risk analysis, and risk mitigation
strategies. This component helps entrepreneurs understand the potential risks and their potential
impact on the project's success. It also enables them to develop risk mitigation plans to minimize
the likelihood or impact of identified risks.
l. Environmental and Social Impact Analysis (Environmental Feasibility):
In some cases, a feasibility study may include an analysis of the project's potential environmental
and social impacts. This component assesses the project's potential effects on the environment,
local communities, and stakeholders. It helps identify any environmental or social risks or
concerns and proposes measures to mitigate negative impacts and enhance positive outcomes.
m. Conclusion and Recommendations:
The conclusion summarizes the key findings of the feasibility study and presents an overall
assessment of the project's feasibility. It highlights the main strengths, weaknesses, opportunities,
and threats identified during the study. Based on the analysis, the conclusion provides
recommendations on whether to proceed with the project, make adjustments, or abandon it. It
may also outline additional research or analysis needed to address any remaining uncertainties.