Instructions to Conduct Feasibility Study

1. Step 1

Determine if you actually need to conduct a feasibility study. If a company is

already doing the same thing that you plan to do and they are making a profit,
your business idea is feasible and you don't need a study to prove it. However, if
you have a novel idea or a new take on a current business, a feasibility study is
warranted.

2. Step 2

Create an outline for your feasibility study. You may want to use an example of
another company's feasibility report to help you in this stage. In general you want
to include a cover sheet, executive summary , table of contents, descriptions of
your product or service, definition of the technology used, business model,
marketing strategies, critical risk factors, financial projections and a conclusion.

3. Step 3

Describe your products and/or services. Include a physical description of the

product, how it will be used by customers, how it will be tested for safety and
effectiveness, and how it will be upgraded in the future.

4. Step 4

Describe the technology that will be used by your company. This may be
technology used to produce a product, to allow a product to function or to manage
the regular operation of the company. Also include information about your
research and development plans and needs to keep your company on the cutting
edge of the industry.

5. Step 5

Describe your market environment. This will need to include a description of your
target market, how the customers will benefit from your products or services,
what niche or need your products or services will fulfill, estimate of market size,
targeted geographical area and factors that will impact the sales volume of your
products or services. This might include how frequently shoppers buy items like
yours, psychographic factors, and demographic factors.

6. Step 6

Describe your competition. Make sure that this section identifies both direct and
indirect competition. Also identify key competitors and outline their market share,
business strengths, assets, goals, strategies, etc. This section will also need to

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 include barriers that your company will need to overcome to enter the market.
Then you will want to list your company's potential advantages, including the
uniqueness of your product, your company's assets, etc.

7. Step 7

Define your industry. To do this, state what your industry is, what products or
services are contained within the industry, how large it is, how fast it is growing,
the outlook for the industry, the industry's demands, the industry's current supply
factors and any other factors that may influence the health of the stated industry.

8. Step 8

Draft your business model. To do this, you will need to identify how your
company will generate revenue, what recurring revenue you expect, and include
enough detail to support your financial projections (included in a later section).

9. Step 9

Describe your marketing and sales strategy. Include information about anticipated
marketing partnerships, how you will gain market access, what your basic
marketing and sales strategies are, how you plan to distribute your merchandise or
services, how you plan to price your products or services, set out an amount you
plan on budgeting for the first year's marketing, and identify any other factors that
may influence the productivity of your proposed marketing campaign.

10. Step 10

Describe both your production requirements and your operating requirements.

Include how items will be manufactured, where they will be manufactured, how
items will be transported, how much space you will need to manufacture your
goods, how much space you will need to contain the operational staff, disclose
whether you plan to rent or buy your warehouse facility and headquarters, how
much money you plan to use for renovations and how complex it is to
manufacture your product. You will need to disclose any information about your
suppliers, a description of any pre-existing contracts you have in place, how
services will be designed, how services will be delivered to customers, how
services can be improved or modified and whether there are any stakeholders
already in place.

11. Step 11

Describe the management and personnel of your business. This section can be a
list of prospective key employee names, titles, respective duties and
responsibilities and the costs associated with employing these people. You will
also want to outline support staff positions and employment costs.

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12. Step 12

Describe the intellectual property that your company will develop and utilize.
This should include all patents, copyrights and trademarks. Also include any
licensing agreements that you have secured for another company's intellectual
material.

13. Step 13

Describe the regulations and environmental issues that your company will need to
address. This should include local, state, and federal laws that you will need to
follow, as well as environmental factors like waste disposal plans, international
trade policies, etc. that you will need to take into consideration when developing,
producing or delivering merchandise or services.

14. Step 14

Describe any critical risk factors, like economic stability and forecasts,
investments, internal organization of the company, etc.

15. Step 15

Outline your start-up schedule. Include important events and projected dates of
completion such as having financing in place, etc. Make sure that you also
connect the milestone with a specific business function such as financial
requirements, personnel requirements, etc.

16. Step 16

Provide documentation for your financial projections. You will need to include
the following financial reports: balance sheet projection for three years with
highlight inflows of capital, cost benefit analysis, income projections for the first
year, break-even analysis and income projections for the first year.

17. Step 17

Describe your capital requirements and your strategy. This section will need to
outline how much capital you need to start up your business, what assets the
company has in place to secure financing, what types of funding the company is
looking for, the anticipated debt to equity ratio the company hopes to maintain
and when investors will be paid a return on their investment.

18. Step 18

Outline your final findings and recommendations. This section should analyze the
findings outlined in the feasibility study. You should examine the company's

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 market viability, exit strategy viability, technical viability, economic and financial
viability, business model viability and management model viability. Then make
recommendations on how your start-up plan can be improved, what areas need
more research and development, etc.

19. Step 19

Draft your executive summary to reflect what will be included in the feasibility
study. Keep this section to a maximum of one page. This section is written last
but it will need to be positioned at the beginning of the study as an introduction to
your report.