What is a Feasibility Study? implemented in order for the business 2.

Does the business idea will solve a

- A Feasibility Study is a technique to to grow. problem?
examine and assess a start-up business 3. Is the business idea unique and hard
to find out if it is technically doable, Importance of Feasibility Study: to replicate?
logically within a projected cost, and 1. To determine the profitability of the 4. What is the price point?
adequately profitable. business. 5. Can the business idea last?
- Performing a Feasibility Study 2. To prove to the entrepreneurs, 6. What is the driving force of the
becomes indispensable, and must always venture capitalists, lenders and business?
be done prior to writing a Business Plan. investors the existence of the market,
- A Feasibility Study is carried out to the liquidity of the business venture and ● The Components of Feasibility
help all those concerned in the business the expected return of investments. Study: Executive Summary
venture in making a judgment that will 3. To identify the flaws, challenges, ● Market Feasibility
be valuable to all concerned. strengths, weaknesses, opportunities ● Technical and Operational
- A Feasibility Study is full of and threats that might affect the success Feasibility
comprehensive data that envelops the and sustainability of the business. ● Organizational Structure or
prospective trade, operational, financial 4. To estimate the financial, human and Management Feasibility
and environmental impact of the technological resources that will be ● Financial Feasibility
proposed business on its target market, needed including other aspects. ● Legal Feasibility
investors and the general public. ● Socio-Economic Feasibility Final
Conditions that make a business Findings/Conclusions and
Differences between Feasibility Study opportunity Feasible Recommendations
and Business Plan 1. Real demand
1. The aim of Feasibility Study is to find 2. Good return on investment Market Aspect
out the workability and profitability of 3. Competitive In this aspect of business, you provide
the venture while the Business Plan is 4. The competence of the entrepreneur an assessment of the market demand for
developed only after the business has and his team your product or service. The analysis
been established. reveals who will buy your product and
2. Feasibility Study is filled with Evaluating the profit potential of the what they are willing to pay for it.
calculations, analysis and estimated business idea Consists of identifying your markets,
projections while Business Plan is more 1. Is there a market for it? determining market factors that create
of tactics and strategies to be demand for your product and

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forecasting the potential demand of the version of similar product or new •Competitive Advantage (explain in
market. related product. paragraph what makes your product
unique)
A. Description of the Industry C. Target Market
• Business Description– what the Process of identifying the available F. Marketing and Sales Strategy
start-up business will be and the market using bases of segmenting such a. Product Strategy- comparative and
products or services that will be offered. as differentiation
Explain what form of business a. Demographic (gender, income, age, b. Place Strategy
organization will be used such as occupation, educational level, marital c. Pricing Strategy
Partnership or Corporation. status)
• Mission – primary purpose both for the b. Geographic (location, region) Commonly used pricing strategies
company and the public c. Psychographic (attitudes, values, 1. Penetration Pricing – setting a low
•Vision– the start-up business beliefs, interests and lifestyles) price to increase sales and market share.
views/dream after five years. 2. Competition Pricing – optional,
• Business Objectives – statement of an D. Current Market Analysis/Demand setting lower or higher or price the
attainable, time-targeted that the Analysis same.
business wishes to achieve in terms of • Potential Demand (get the total 3. Skimming Pricing– setting an initial
profitability, productivity, customer population of the identified target high price and then slowly lowering the
service, employee retention. market) price.
• Business Name and Logo. Business • Actual demand (make research about 4. Product Line Pricing – pricing within
Logo is the virtual representation of the the actual demand of the product) the same product range
business. Use image and tagline.
E. Competition and Industry Analysis Promotional Strategies
B. Product Description Direct Competitors 1. Advertisement (printed, radio,
Describe present product features Indirect Competitors television)
• Product testing – an activity to verify 2. Public Relations
acceptability and safety of product and • Industry Analysis (explain the table in 3. Sales Promotion
services. paragraph) (explain what is the present 4. Personal Selling
• Product Upgrading – the practice of economic status or condition of the 5. Sponsorship
replacing a product with a newer product) (cite a literature)

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MARKET ANALYSIS Competitive Advantage- a feature that Various methods to forecast:
makes a product more desirable than its ● Project: use analogous products,
Industry Demographics and Industry competitor’s products. base demand for your product
characteristics based on demand for another
● The number of companies, Researching the Target Customer one.
annual revenues, and average You must know your customer and have ● Interview prospective customers
size of the companies by number a market penetration strategy. and intermediaries. Talking with
of employees Market Penetration Strategy - is a plan people who work in industry-
● Is industry growing, shrinking, to reach initial customers and grow. customers, distributors,
or remaining stable Creating a Customer Profile: prospective wholesalers, and retailers can
customer’s market segments. give you a good estimate of
Researching the Industry ● Who are my customers? demand
The Competition – to succeed you must ● What do they generally buy, and ● Limited production to test the
capture market share by differentiating how do they hear about the market. Use a kiosk gauge
your business. product? demand
Market Share - portion of total sales ● How often do they buy?
generated by all competing companies in ● How can my product meet their Potential and Actual Demand
a given market needs, or what value can I *Present Population is based on the
Study the competition to define an provide? estimated population of the identified
unserved niche in the market. target market from the total population.
Niche – a small, specialized segment of Researching the Target Customer *For projection, add 3% increase per
the market based on customer Evaluating Customer’s Needs– a year, based on city planning annual
needs discovered in market research customer needs analysis pinpoints the growth rate.
Market Positioning – is the act of features and benefits of your goods or
identifying a specific market niche services that customers value. Technical and Operational Aspect
for a product or service Forecasting Demand – need to know A. Production Technology
Create a Competitive Matrix - do a how much of your product they will buy Table 1. Store Equipment (machineries to
thorough analysis of the competition. and how often they will buy it. produce the items)
Identify what is unique about your Table 2. Office Equipment (printer,
business. Difficult to forecast with any degree of computer, paper shredder, fax)
certainty

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Table 3. Office Supplies (paper clip, technically. (Procedure, products ● service capacity in hours x 60 /
folder, scissors, stapler) capabilities, how a product works, standard allowed per minute x 50%-line
Table 4. Furniture and Fixtures (chairs, function) efficiency = production capacity
desks, tables, sala set) (ex. 3 primary machine, 9 hours, 180
Table 5. Raw Materials and Other minutes sam, 80%line
Supplies C. Business Location and Layouts efficiency = 7.2 estimated production
Table 6. Material Handling Equipment ● Location Map of Business capacity)
(sample are racks, frames, shelves, ● Floor Plan
drawers, mezzanines) ● Store Layout c. Work Schedule
Table 7. Transportation Equipment ● Process Layout (raw mats to d. Storage System /Warehousing
Table 8. Kitchen Equipment (if finished product) E. Utilities (electric, water,
applicable) internet/telephone) (tables) (monthly
D. Capital Expenditures and annually)
Formula: ● Rent or own the Facility. (explain f. Waste Management Program
To get depreciation expense: beginning the advantages of rent or owning (segregation/disposal/management
value of the unit /estimated life value the facility) g. Prototype (sample product) (image)
To get the ending value: beginning value ● Transportation Mode
less depreciation expense ● Store Uniform

Estimated Life Value of Property: E. Service Process

3 years- Tractors, manufacturing, and a. Process Flow of Service (from
livestock machineries producer/seller to customer)
5 years- Computers, office equipment, b. Estimated Production capacity
cars, light trucks, assets used in (Capacity number of services)
construction service
7 years- Furniture, appliances Computation:
● total number of primary machine or
B. Technical Description equipment to be used x operational
Provides information designed to hours = service capacity in hours)
explain the uses or applications

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