Feasibility Study

 A feasibility study is used to determine the probable success of a new business.

There are three objectives that should be met by the feasibility study in order for the study to be of value. The first is to learn more about your prospective client’s needs. Once the needs of the client are determined, the second objective is to clearly define the product or service that you wish to offer these clients. In other words, find a need and fill it. The third objective is to determine how much revenue this product or service will generate. A cash flow projection estimates the cash balance for the business on a month-to-month basis. Revenue and expense information is then incorporated in a cash flow projection, which gives you a measure of the feasibility of the venture. 

It will be helpful to pose the following questions when determining what market research you need to do to meet the objectives of your feasibility study.

I. Do prospective customers have a need for your product or service?

II. Will the business be able to compete?

III. Is the proposed location of the business adequate?

Some basic market research needs to be performed in order to answer these questions with any degree of accuracy. There are primarily three types of research that can be utilized:

I. Informal Research

 II. Secondary Data

III. Primary Data - Surveys