* Feasibility Study

Presented By:
Elisa de Guzman –Arpilleda
 *Feasibility Study Defined
A feasibility study is a detailed
analysis of a company and its
operations that is conducted in order
to predict the results of a specific
future course of action. Small
business owners may find it helpful
to conduct a feasibility study
whenever they anticipate making an
important strategic decision.
For example
A company might perform a
feasibility study to evaluate a
proposed change in location, the
acquisition of another company, a
purchase of major equipment or a
new computer system, the
introduction of a new product or
service, or the hiring of additional
employees.
*Types of Feasibility Study
1. Technical Feasibility 
- Does the company have the
technological resources to undertake the
project? Are the processes and procedures
conducive to project success?

2. Schedule Feasibility 
- Does the company currently have
the time resources to undertake the
project? Can the project be completed
in the available time?
3. Economic Feasibility 
- Given the financial resources of the
company, is the project something that
can be completed? The economic
feasibility study is more commonly called
the cost/benefit analysis.

4. Cultural Feasibility 
- What will be the impact on both local
and general cultures? What sort of
environmental implications does the
feasibility study have?
5. Legal/Ethical Feasibility 
- What are the legal implications
of the project? What sort of ethical
considerations are there? You need to
make sure that any project undertaken
will meet all legal and ethical
requirements before the project is on
the table.

6. Resource Feasibility 
- Do you have enough resources, what
resources will be required, what facilities will
be required for the project, etc.
7. Operational Feasibility 
- This measures how well your
company will be able to solve problems and
take advantage of opportunities that are
presented during the course of the project.

8. Marketing Feasibility 
- Will anyone want the product once
its done? What is the target demographic?
Should there be a test run? Is there enough
buzz that can be created for the product?
9. Real Estate Feasibility 
- What kind of land or property will be
required to undertake the project? What is
the market like? What are the zoning laws?
How will the business impact the area?

10. Comprehensive Feasibility 

- This takes a look at the various aspects
involved in the project - marketing, real estate,
cultural, economic, etc. When undertaking a new
business venture, this is the most common type
of feasibility study performed.
 *Conducting a
Feasibility Study

Step One: Conduct a Preliminary Analysis

-Two sets of activities are involved:

1. Describe or outline as specifically as possible

the planned services, target markets, and
unique characteristics of the services.
2. Determine whether there are any impossible
problems.
 Step Two: Prepare a Projected Income
Statement

Anticipated income must cover direct

and indirect costs, taking into account the
expected income growth curve. Working
backward from the anticipated income, the
revenue necessary to generate that income
can be derived in order to build a projected
income statement.
 Factors that determine this statement are
services provided, fees for services, volume
of services, and adjustments to revenues (e.g.,
actual reimbursement levels).

Step Three: Conduct a Market Survey

A good market survey is crucial. If
the planner cannot perform this survey, an
outside firm should be hired. The primary
objective of a market survey is a
realistic projection of revenues.
 The major steps include:
1. Define the geographic influence on the
market.
2. Review population trends, demographic
features, cultural factors, and purchasing power
in the community.
3. Analyse competing services in the
community to determine their major
strengths and weaknesses.
4. Determine total volume in the market area
and estimate expected market share.
5. Estimate market expansion opportunities.
Step Four: Plan Business Organization
and Operations
At this point, the organization and
operations of the business should be
planned in sufficient depth to determine
the technical feasibility and costs
involved in start-up, fixed investment, and
operations.
Extensive effort is necessary to develop detailed
plans for:
1. Equipment
2. Merchandising methods
3. Facility location and design (or layout)
4. Availability and cost of personnel
5. Supply availability (e.g., vendors, pricing
schedules. exclusive or franchised products)
6. Overhead (e.g., utilities, taxes, insurance)
Step Five: Prepare an Opening Day Balance
Sheet
The Opening Day Balance Sheet should
reflect the practice's assets and liabilities as
accurately as possible at the time the practice
begins, before the practice generates income.
Prepare a list of assets required for practice
operations. The list should include item, source,
cost, and available financing methods. Necessary
assets include everything from cash necessary for
working capital to buildings and land.
Step Six: Review and Analyse All Data
Basically, taking this step means
"Step back and reflect one more time."
Re-examine the Projected Income
Statement and compare with the list of
desired assets and the Opening Day Balance
Sheet.
Analyse risk and contingencies.
Consider the likelihood of significant changes
in the current market that could alter
projections.
Step Seven: Make "Go/No Go" Decision
All the preceding steps have been
aimed at providing data and analysis for the
"go/no go" decision. If the analysis
indicates that the business should yield at
least the desired minimum income and has
growth potential, a "go" decision is
appropriate. Anything less mandates a "no
go" decision.
Additional considerations include:
1. Is there a commitment to make
the necessary sacrifices in time,
effort and money?
2. Will the activity satisfy long-
term aspirations?
*Parts of Feasibility Study
1. Proposed Project Description
Defining and describing a proposed
project or business venture lays the
foundation for feasibility analysis. If you
are analysing a project, go into detail about
project timelines, deliverables and resource
requirements.
 If you are analysing a business, detail the
products and services that it will offer, the
proposed target market and any extraordinary
resource needs introduced by the business
model. Focus on the requirements of
implementing the venture, rather than details
such as business names and organizational
structures.
2. Market Analysis Section
Analyse the industry and market
targeted by the proposed venture. Measure
the size of the market and its demographic
makeup using census data or other survey
sources. Define a target market segment
according its behaviouristic, geographic and
psychographic characteristics. Analyse
any competing businesses or projects that are
planned or already at work in the market.
3. Technical Feasibility Section
Consider the requirements for
specialized equipment or facilities,
copyrights, patents, labor and expertise for
the venture in question, and determine
whether or not you either have these
resources on hand or are reasonably able to
obtain them. Technical requirements can
range from special permits and licenses from
multiple government agencies to
specialized vehicles or professionally
licensed specialists.
4. Financial Feasibility Section
Determine how much the proposed
project or business start-up will cost to
implement, as well as how much it can be
expected to earn. Consider all of the resources
and capital investments required up front.
Calculate any financing requirements that will
arise, and analyse the potential sources of
financing available, such as business loans or
outside investment.
*Thank You……. 