Project Management and Feasibility Study

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United States Department of Agriculture Rural Business– Cooperative Service RBS Service Report 58

Cooperative Feasibility Study Guide

Preface

This guide has been designed to assist agricultural cooperatives in completing a feasib l t s u y. Rather than being a complete handbook, this publication presents the iiy td important elements to consider when conducting a feasibility study. The guide contains information on whether or not a group should conduct a feasibility study, the steps involved, how to evaluate a study, and how to implement one once completed. Tips on selecting and working with consultants are also provided. A sample feasibility study outline is included for reference. October 2000 Price: domestic– $5.00; foreign--$5.50

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Contents

The project development process .........................................1 Why do feasibility studies? ..............................................2 What is a feasibility study? ..............................................2 Feasibility study limitations ..............................................3 Creating a feasibility study ...............................................3 Project defin t o ..................................................3 iin Group characteristics ..............................................4 Group decisions ..................................................4 Feasibility study decisions ..........................................5 1. Conduct the study? ..............................................5 2. Idea identification and clarification ..................................5 3. Study assumptions ..............................................5 4. Who conducts the study? .........................................6 5. How to review the study ..........................................8 6. Accepting the completed study .....................................8 7. Implementing an accepted study ...................................8 Feasibility study report ..................................................9 Bankers’ considerations ................................................10 Implementing a project .................................................11 Background information sources .........................................12 Appendices Appendix A: The feasibility study vs. the business plan ..................12 Appendix B: Sample feasibility consultant selection criteria ...............13 Appendix C: Sample feasibility study outline ...........................13 Appendix D: Considerations for implementing feasibility studies ............15

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Contents

Figures Figure 1: The project cycle ..........................................1 Figure 2: The project cycle described .................................2 Figure 3: Guidelines for group decisions ...............................5 Figure 4: Decisions for feasibility studies ...............................5 Figure 5: Feasibility study assumptions ................................6 Figure 6: Criteria for selecting a good feasibility study consultant ............7 Figure 7: Bankers' considerations for feasibility studies ..................11

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Cooperative Feasibility Study Guide

James Matson Cooperative Development Specialist

The Project Development Process
The feasibility study is an integral part in developing a business project. Whether it’s for the creation of a new cooperative or the expansion of an existing one, the pro e t c c e i s m l r. In "How to Start a jc yl s iia Cooperative"(RBS CIR 7), Galen Rapp and Gerald Ely present a 16-step sequence of events recommended for c reating an agricultural cooperative. This guide is an expansion of the seventh step, now to conduct the feasibility study. For purposes of cooperative development, the components in this cycle can be divided into five basic stages (figure 1 . F g re 2 summarizes activities that ) iu occur in each phase of the cycle.

Differing amounts of time may be required for each stage in the project...
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