Before you begin writing your business plan you need to identify how, where, and to whom you intend to sell a service or product. You also need to assess your competition and figure out how much money you need to start your business and keep it running until it is established.
Feasibility studies address things like where and how the business will operate. They provide in-depth details about the business to determine if and how it can succeed, and serve as a valuable tool for developing a winning business plan.
Why Are Feasibility Studies so Important?
The information you gather and present in your feasibility study will help you:
List in detail all the things you need to make the business work;
Identify logistical and other business-related problems and solutions;
Develop marketing strategies to convince a bank or investor that your business is worth considering as an investment; and
Serve as a solid foundation for developing your business plan.
Even if you have a great business idea you still have to find a cost-effective way to market and sell your products and services. This is especially important for store-front retail businesses where location could make or break your business.
For example, most commercial space leases place restrictions on businesses that can have a dramatic impact on income. A lease may limit business hours/days, parking spaces, restrict the product or service you can offer, and in some cases, even limit the number of customers a business can receive each day.
The Components of a Feasibility Study
Description of the Business: The product or services to be offered and how they will be delivered.
Market Feasibility: Includes a description of the industry, current market, anticipated... [continues]
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