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Wednesday, 9 January 2013

HOW TO WRITE A GOOD BUSINESS FEASIBILITY REPORT



Feasibility Report/Study is an analysis or evaluation of a proposed project to determine if it;
-- is technically feasible;
-- is feasible within the estimated cost, and
-- will be profitable.
Feasibility Studies are almost always conducted where large sums are at stake.
Feasibility Studies are PRELIMINARY INVESTIGATIONS into the potential benefits associated with undertaking a specific activity or project.
The main purpose of feasibility study is to consider all factors associated with the project and determine if the investment of time and other resources will yield a desirable result.
When a business is considering a new operation or the launch of a new product, the feasibility study is a logical tool to employ before any resources are invested in the new project. Only when the feasibility study has addressed the total cost of completing the project can the study progress to the next level. The second phase of the study will look into costs associated with reaching and cultivating a consumer base for the sale of the new product.
The overall idea of these preliminary studies is to ensure that there is a reasonable understanding of what will be required to both create the new product and also successfully market the finished goods at a profit. The utilization of feasibility study has often assisted companies in understanding which projects to develop and which ones to abandon before investing resources in something that ultimately shows no promise of generating revenue.
A Business Feasibility Study can be defined as a controlled process for identifying problems and opportunities, determining objectives, describing successful outcomes and assessing the range of costs and benefits associated with several alternatives for solving problems.
A Business Feasibility Study is used to support the decision making process based on a Cost-Benefit Analysis of the actual business or project viability.
The feasibility study is conducted during the deliberation phase of the Business Development Cycle prior to commencement of a formal Business plan.
It is an analytical tool that includes recommendations and limitations which are utilized to assist the decision-makers when determining if the Business Concept is viable (Drucker 1985; Hoagland & Williamson 2000; Thompson 2003c; Thompson 2003a)

THE IMPORTANCE OF A BUSINESS FEASIBILITY REPORT
1. It is an effective way to safeguard against wastage of further investment or resources.

2. If a project is seen to be feasible from the results of the study, the next logical step is to proceed with the full Business Plan

3. The research and information uncovered in the feasibiliy study will support the Business planning stage and reduce the research time.

4. A thorough validity analysis provides an abundance of information that is also necessary for the business plan.

5. A feasibility study should contain clear supporting evidence for it recommendations.

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