Lloyd Emerson D. Dela Cruz
What is a Feasibility Study?
Feasibility Study, in general definition, is a preliminary study undertaken before initializing a certain project in order to asses and ascertain the likelihood of the project’s success. A more elaborate definition of Feasibility Study is that it is an evaluation and analysis of the potential of the proposed project which is based on extensive investigation and research to support the process of decision making whether to initialize the said proposed project. In its simplest terms, the two criteria to judge feasibility are cost required and value to be attained. As such, a well-designed feasibility study should provide a historical background of the business or project, description of the product or service, accounting statements, details of the operations and management, marketing research and policies, financial data, legal requirements and tax obligations. A feasibility study can help you identify if your idea is viable or not; useful facts and figures to aid decision-making; and alternative approaches and solutions to putting your idea into practice. Feasibility study may involve: An assessment of the current market; An assessment of you potential position in the market; An evaluation of the possible position in the market; A short list of possible option; The development of a financial model to size the market and estimate the potential income and expenditure for each the short listed options; And an assessment of the impact of each main option on your group’s structure and products. A feasibility study should examine three main areas namely, market issues, technical and organizational requirements, and financial overview. Market issues are the primary area that the feasibility study needs to address to. If an adequate level of demand does not exist for the product and there is no known way on how to differentiate the products so that it can compete with established industry players, then...
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