How To Conduct A Feasibility Study PDF

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How to Conduct a Feasibility Study

By Jennifer Bridges | Dec 10, 2019
A feasibility study is just one step in a long journey. Try ProjectManager.com and get award-
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Why is a feasibility study so important for a project? For one, the feasibility study is the
foundation upon which the rest of your project resides. If it can’t support your project, you
don’t have a project. Now that we got your attention, read on to learn what you need to know
about feasibility studies.
What is a Feasibility Study?

Let’s begin by clarifying what a feasibility study is. A feasibility study is simply an assessment
of the practicality of a proposed plan or method. Just as the name implies, you’re asking, “Is
this feasible?”
For example, do you have or can you create the technology to do what you propose? Do you
have the people, tools and the resources necessary? And, will the project get you the ROI you
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expect?
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 When should you do a feasibility study? It should be done during that point in the project life
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cycle after the business case has been completed.
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So, that’s the “what” and the “when” but how about the “why?” Meaning,
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a
feasibility study? Well, it determines the factors that will make the business opportunity a
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success, making it pretty important.
7 Steps for a Feasibility Study

Follow these steps when conducting a feasibility study:
1. Conduct a Preliminary Analysis

Begin by outlining your plan. You should focus on an unserved need, a market where the
demand is greater than the supply, and whether the product or service has a distinct
advantage. Then you need to determine if the hurdles are too high to clear (i.e. too expensive,
unable to effectively market, etc.).
2. Prepare a Projected Income Statement

This step requires you to work backwards. Start with what you expect the income from the
project to be and then what investment is needed to achieve that goal. This is the foundation
of an income statement. Things to take into account here include what services are required
and how much they’ll cost, any adjustments to revenues, such as reimbursements, etc.
3. Conduct a Market Survey, or Perform Market Research

This step is key to the success of your feasibility study, so make it as thorough as possible.
It’s so important that if your organization doesn’t have the resources to do a proper one, then
it is advantageous to hire an outside rm to do so. The market research is going to give you
the clearest picture of the revenues you can realistically expect from the project. Some things
to consider are the geographic in uence on the market, demographics, analyzing
competitors, value of market and what your share will be and if the market it open to
expansion (that is, response to your offer).
4. Plan Business Organization and Operations

Once the groundwork of the previous steps has been laid, it’s time to set up the organization
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and operations of the planned business venture. This is not a super cial, broadstroke
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 endeavor. It should be thorough and include start-up costs, xed investments and operation
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costs. These costs address things such as equipment, merchandising methods, real estate,
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personnel, supply availability, overhead, etc.
5. Prepare an Opening Day Balance Sheet
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This includes an estimate of the assets and liabilities, one that should be as accurate as
possible. To do this, create a list that includes item, source, cost and available nancing.
Liabilities to consider are such things as leasing or purchasing of land, buildings and
equipment, nancing for assets and accounts receivables.
6. Review and Analyze All Data

All these steps are important, but the review and analysis are especially important to make
sure that everything is as it should be and nothing requires changing or tweaking. So, take a
moment to look over your work one last time. Reexamine your previous steps, such as the
income statement, and compare it with your expenses and liabilities. Is it still realistic? This
is also the time to think about risk, analyzing and managing, and come up with any
contingency plans.
7. Make a Go/No-Go Decision

You’re now at the point to make a decision about whether the project is feasible or not. That
sounds simple, but all the previous steps we’re leading to this decision-making moment. A
couple of other things to consider before making that binary choice is whether the
commitment is worth the time, effort and money and is it aligned with the organization’s
strategic goals and long-term aspirations.
Best Practices for a Feasibility Study

 Use templates/tools/surveys, or any data and technology that gives you leverage
 Involve the appropriate stakeholders to get their feedback
 Use market research to further your data collection
 Do your homework and ask questions to make sure your data is solid
F ibilit R tT l t
Feasibility Report Template
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Finally, here is an outline for the nine parts of a feasibility report:
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 1 Executive summary
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2 Description of product/service
3 Technology considerations
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4 Product/service marketplace
5 Marketing strategy
6 Organization/sta ng
7 Schedule
8 Financial projections
9 Findings and recommendations
That nal item is broken down into subsets of technology, marketing, organization and
nancial ndings and recommendations.
ProjectManager.com Improves Your Feasibility Study

A feasibility study is a project, so get yourself a project management software that can help
you execute it. ProjectManager.com is an award-winning software that can help you manage
your feasibility study through every phase.
Once you have a plan for your feasibility study, upload that task list to our software and all
your work is populated in our online Gantt chart. Now you can assign tasks to team
members, add costs, create timelines, collect all the market research and attach notes at the
task level. This gives people a plan to work off of, and a collaborative platform to collect
ideas and comments.
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ProjectManager.com’s online Gantt chart makes planning easy.
If you decide to implement the project, you already have it started in our software, which can
now help you monitor and report on its progress. Try it for yourself with this free 30-day trial
and get started on that feasibility study right away.
Watch a Video on Feasibility Studies

There are many steps and aspects to a feasibility study. If you want yours to be accurate and
forecast correctly whether your project is doable or a dude, then you need to have a clear
understanding of all its moving parts.
Jennifer Bridges, PMP, is an expert on all aspects of project management and leads this free
training video to help you get a rm handle on the subject.
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Here’s a screenshot for your reference!
Thanks for watching!
Pro-Tip: When completing a feasibility study, it’s always good to have a contingency plan that
you test to make sure it’s a viable alternative.
Transcription
Today we’re talking about How to Conduct A Feasibility Study, but rst of all, I want to start
with clarifying what a feasibility study is.
Basically, it’s an assessment of the practicality of a proposed plan or method. Basically, we’ll
want to want to know, is this feasible? Some of the questions that may generate this or we
can hear people asking are, “Do we have or can we create the technology to do this? Do we
have the people resource who can produce this and will we get our ROI, our Return On
”
Investment?”
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 So when do we do the feasibility study? So it’s done during a project lifecycle and it’s done
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after the business case because the business case outlines what we’re proposing. Is it a
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product or service that we’re proposing?
So why do we do this? The reason we do this is because we need to determine the factors
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that will make the business opportunity a success.
Well, let’s talk about a few steps that we do in order to conduct the feasibility study.
Well, rst of all, we conduct a preliminary analysis of what all’s involved in the business case
and what we’re analyzing and what we’re trying to determine is feasible.
Then we prepare a projected income statement. We need to know what are the income
streams, how are we gonna make money on this? Where’s the revenue coming from? We also
need to conduct a market survey.
We need to know, is this a demand? Is there a market for this? Are customers willing to use
this product or use this service?
The fourth one is, plan the business organization and the operations. Like, what is the
structure, what kind of resources do we need? What kind of sta ng requirements do we
have?
We also want to prepare an opening day balance sheet. What are the…how again, what are
the expenses, what’s the revenue and to ensure that being able to determine if we’re gonna
make our ROI.
So we want to review and analyze all of the data that we have and with that, we’re going to
determine, we’re going to make a go, no-go decision. Meaning, are we going to do this project
or this business opportunity or not.
Well, here’s some of the best practices to use during your feasibility study.
One is use templates tools and surveys that exist today The great news is data is becoming
One is, use templates, tools and surveys that exist today. The great news is, data is becoming
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more and more prevalent. There are all kinds of technologies. There are groups that they do
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 nothing but research. Things that we can leverage today.

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We want to involve the appropriate stakeholders to ensure that input is being considered
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We also want to use again the market research to ensure we’re bringing in good, reliable data.
We also…I mean do your homework, meaning act like is if this is your project, if it’s your
money. So do your homework and do it well and make sure you give credible data.
So ultimately in the end what we’re doing is, we’re producing and we’re providing a feasibility
report. So in that report, think of this is like a template.
So what you’re gonna do is give it an executive summary of the business opportunity that
you’re evaluating and the description of the product or the service.
You want to look at different technology considerations. Is it technology that you’re going to
use? Are you going to build the technology?
What kind of product and service marketplace and being able again, to identify the speci c
market you’re going to be targeting. Also, what is the marketing strategy you’re going to use
to target the marketplace?
And also what’s the organizational structure? What are the sta ng requirements? What
people do you need to deliver the product or service and even support it?
So also we want to know the schedule to be able to have the milestones to ensure that as
we’re building things, that as we’re spending money that we’re beginning to bring in income to
pay and knowing when we’re going to start recuperating some of the funding. Again, which
also ties into the nancial projections.
Ultimately in this report, you’re going to provide the ndings and the recommendations.
Again we’ll probably talk about technology Are you going to build it? Are you going to buy it?
Again, we ll probably talk about technology. Are you going to build it? Are you going to buy it?
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What’s the marketing strategies for the speci c marketplace organization? You may have
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 some recommendations for whether you’re going to insource the staff, maybe you are going
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to outsource some staff and what that looks like and also nancial recommendation.
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So this is a little bit about the feasibility study, and if you need a tool
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yours, then sign up for our software now at ProjectManager.com.
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(This post was updated December 2019)
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