What, when, why, how, where you’re using the feasibility Study? Explain with your own word.
What is Feasibility Study?
Feasibility study is an analysis of the viability of an idea. The feasibility study is an evaluation and analysis of the potential of a proposed project. It is based on extensive investigation and research to support the process of decision making.
When to do a study?
The decision to conduct a feasibility study should not be taken lightly. It is an expensive and time consuming process. However, not doing a feasibility analysis can be even more expensive in terms of the poor decisions you may make from not conducting the proper analysis. To help you understand when to conduct a feasibility study, you may want to review Information File C5-02, Idea Assessment and Business Development Process. You need to be far enough along in the deliberation process of your business idea to make the best use of a feasibility study. So you need to have a clearly defined outline of one or more alternative business models or scenarios that you want to explore. And you want to have conducted sufficient initial investigation of these alternatives to determine if they have the potential of being viable. You don’t want to spend your feasibility money investigating ideas that you can determine are not feasible by just making a few phone calls. This means that you will need to have already done much of the early investigation and exploration of your business idea before you schedule a full blown study. This early investigation or pre-feasibility analysis can be done by members of your committee or with the help of a consultant. You may start by doing a marketing study to determine if the business idea has market viability. If it does not, you have saved time and money by not commissioning a comprehensive feasibility study. If the idea has market viability, you can move forward with the feasibility analysis and use the market analysis in the feasibility study.
Who will conduct the analysis?
If you plan to do a feasibility study, you will want to strongly consider hiring a consultant to conduct the study. Names of business consultants are contained in Directory of Consultants and Service Providers. This directory only provides you with the names of consultants. You are responsible for choosing the proper consultant to fit your needs. Time and money spent in choosing and using a good consultant is an important investment that will pay dividends later. For help in choosing which consultant to hire, refer to Information File C5-60, Selecting a Consultant. The cost of a feasibility study can vary greatly depending on the depth and breadth of the study. A high quality, in-depth study can cost as much as $100,000, although the cost is usually significantly less. When selecting a consultant for a feasibility study, it is often recommended that you send a Request for Proposals (RFP) to prospective consultants, outlining what you want done. For a minimal cost, the AgMRC will post your RFP on the Web site. A consultant can respond to the RFP by describing how the study will be conducted, what questions will be answered by the study, a time-line for completing the analysis and how much it will cost. When selecting a consultant from among those responding to the RFP, first identify which ones provide the type and quality of answers needed to adequately assess your business idea. Then select the consultant who can provide the required analysis for the least cost. Consultants often feel pressured to tell you what you want to hear. Farm groups usually are excited about a business prospect and, without realizing it, indirectly influence the consultant to tell them what they want to hear - “the proposal is a good idea.” So, communicate to the consultant that you want an accurate assessment of the feasibility of the venture.
Why use a Feasibility Study?
Use a feasibility study can reduce some risks. How many of...
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