A feasibility study is the analysis of the practicability of a proposed idea
What is Feasibility Study?
A feasibility study is the analysis of the practicability of a proposed idea. It evaluates the economic, environmental, technical and quality of life aspects of proposed business ideas. Coupled with the project’s compatibility with the local community, this information allows decision makers to have the accurate and relevant information needed to make informed choices.
Who uses it?
Project Leader, Business Analyst, Configuration Manager, Development Manager, Project Manager, Technical Architect, IT Manager, System Administrator, Test Manager, Documentation Manager, Technical Writers, System Administrator.
What is the purpose of a Feasibility Study?
The Feasibility Study analyses potential solutions against a set of requirements, evaluates their ability to meet these objectives, describe a recommended solution, and offer a justification for this selection. It should address issues that could influence the success of a potential project and assess the advantages and disadvantages of each option so they can be ranked.
Scope of Feasibility Analysis
In general terms, the elements of a feasibility analysis for a project should cover the following:
• Need Analysis: Pertinent questions that should be asked include:
• Is the need significant enough to justify the proposed project?
• Will the need still exist by the time the project is completed?
• What are the alternate means of satisfying the need?
• What are the economic, social, environmental, and political impacts of the need?
Process Work: What will be required to satisfy the need?
Cost Estimate: Estimating project cost to an acceptable level of accuracy.
Financial Analysis: An analysis of the cash flow profile of the project.
Project Impacts: Environmental, social, cultural, political, and economic impacts may be some of the factors that will determine how a project is perceived by the public.
Conclusions and Recommendations: Overall outcome of the project analysis.
How do we conduct a Feasibility Study
“Q” RENAISSANCE Management Consultants’ conducts feasibility studies on project plans for its clients. We recommend the steps and various aspects of the feasibility study and work very closely with our clients to achieve the mutually agreed objective within an estimated time frame. If you want your business to succeed, or if you need to convince investors or management to fund your initiatives, it is critical that you are equipped with a feasibility study that proves that your ideas are sound and that you have an execution plan that is practical.
“Q” RENAISSANCE Management Consultants’ feasibility study consultants conduct comprehensive industry, customer and competitor analyses in order to determine market opportunities. Our consultants then assess each of the opportunities, determine the optimal ones, and create action plans for effective market penetration. Our feasibility study consultants have conducted studies for hundreds of organizations ranging from startups and large companies to non-profit organizations and governments. We have conducted studies in numerous industries, including real estate & construction, hospitality & hotels, sports & recreation, renewable & alternative energy (biodiesel, wind, solar), health care, government, and non-profit, among others. “Q” RENAISSANCE Management Consultants’ unique feasibility study methodology is ideal for judging a new venture’s prospects for success.
Feasibility Study Methodology
“Q” RENAISSANCE Management Consultants’ comprehensive feasibility study development process includes each of the following five distinct services.
Market Sizing & Trends
The first step in conducting a feasibility study is to understand the market size and trends that are affecting the market. To start, “Q” RENAISSANCE Management Consultants identifies all markets in which the client competes or plans to compete. Next, we determine the relevant size of these markets. The relevant market size equals a company’s sales if it were to capture 100% of its specific niche of the market.
“Q” RENAISSANCE Management Consultants determines this size using both a top-down (what percent of the market can we reasonably expect to penetrate) and bottom-up (e.g., how many units can we expect to sell at what price) methodology. As many assumptions are required when sizing a new or emerging market, “Q” RENAISSANCE Management Consultants relies heavily on case studies of thousands of other companies and clients who have penetrated new markets.
In assessing markets, “Q” RENAISSANCE Management Consultants looks at the current market size and what the market size might be in the short, mid and long-term. Specifically, we answer key questions such as the following:
• How has the relevant market size changed over the past one to five years?
• What is the projected growth of the relevant market?
• What factors will affect this growth? General economic factors? Changing regulatory conditions? Changing consumer needs? Etc.
Customer Needs Assessment
In order to successfully serve customers, businesses must have an acute understanding of customers’ needs. Through primary and/or secondary research, “Q” RENAISSANCE Management Consultants uncovers the precise needs of customers, how these needs are currently being fulfilled, and what is required to better satisfy these customers.
We begin by defining exactly which customers the company is serving. This requires specificity. For instance, rather than saying that a company serves small businesses, it may be more appropriate to identify and assess its more precise market, perhaps, small businesses with 5-25 employees in large metropolitan areas. “Q” RENAISSANCE Management Consultants then details the demographic profiles of and assesses the needs of these customers. We answer questions such as:
• What is the average revenues/income of these customers?
• Where are these customers geographically based?
• What products or services are these customers currently purchasing to fulfill their needs?
• What factors drive the decision-making of these customers (e.g., price, service, reliability)?
• How do these customers make buying decisions (e.g., multiple decision makers, multiple bids)?
By truly understanding customers, “Q” RENAISSANCE Management Consultants is able to assess the feasibility of an idea, modify it as needed, and create action plans that maximize the probability of market success.
In today’s global marketplace, conducting detailed competitive intelligence is critical. By uncovering the strategies of large, small and emerging competitors, critical lessons are learned. Armed with this knowledge, “Q” RENAISSANCE Management Consultants is able to develop strategies for clients that avoid potential dangers and capitalize on emerging opportunities. The first step of competitive analysis is for “Q” RENAISSANCE Management Consultants to distinctly define our client’s competitors as any service, product or company that a customer can use to fulfill the same need(s) as the client fulfills.
This definition includes firms that offer similar products, substitute products and other customer options (such as performing the service or building the product themselves). While using this broad definition results in more competitors to analyze, it results in improved strategies and decreased chances of being blindsided by competitive actions in the future. Once the competitors are defined, “Q” RENAISSANCE Management Consultants provides detailed analyses of them, including:
• What products and services they offer and what products and services are in their pipelines
• The infrastructure and operational processes used by these firms and how this impacts their ability to succeed in the future
• Their pricing structures
• What proprietary technology (patents held or filed) the firms maintain
• Where we can expect these competitors to be in the short, mid and long-term
The result of this assessment is a comprehensive list of competitors that also includes each competitor’s strengths and weaknesses and prospects for the future. “Q” RENAISSANCE Management Consultants then uses this information to identify opportunities and create strategies that will result in sustainable competitive advantage.
Idea Assessment & Development
The process of conducting in-depth market sizing and trend analysis, customer needs research, and competitive intelligence results in vast amounts of data and information.“Q” RENAISSANCE Management Consultants works with our clients to expertly access this information. Specifically, we answer questions such as:
• Based on this market research, how sound are the current business ideas?
• What refinements can make these ideas even stronger?
• What new ideas does the research suggest?
Format of our Feasibility Studies
The “Q” RENAISSANCE Management Consultants feasibility studies are executed using classical feasibility analysis structure. We do not use templates but do customize every feasibility studies according to the specific project type and objectives. “Q” RENAISSANCE Management Consultants has an organized approach that employs proven methodologies. Our work has benefited a significant list of clients by carrying out feasibility studies and developing action plans that give them a considerable competitive advantage.
Major Components Covered By Our Feasibility Studies
The feasibility of a project can be ascertained generally on the basis of the following assessments:
Market Feasibility (Analysis)
• Supply analysis: current sources, trends and supply projections
• Demand analysis: Local and external
• Market supply gap analysis: past, present and projected demand analysis
• Competitiveness of products with respect to quality and prices
Technical Feasibility (Analysis)
• Technologies evaluation
• Alternative technologies investigations
• Facilities production capacities analysis
• Production minimum economic size
• Major cost items
• Plant lay out design
• Plant location analysis
• Inputs resources requirements and availability
Operational Feasibility (Analysis)
• Legal requirements for project operations
• Organizational form and management of the project
• Stakeholders and beneficiaries analysis
• Resource requirement and availability including human resources, materials and equipment
Environmental Feasibility (Analysis)
• Temperature relevant to intended project
• Land surface
• Underground resources
• Water resources
• Safety factors
• Plant and process design
• Storage system and safety
• Effective Treatment plan
Financial Feasibility (Analysis)
• Assessment of plant’s commercial profitability
• Projected financial information
• Profit and loss statement
• Balance sheet
• Cash flow projections
• Capital expenditure forecasts for equipment, manpower, raw materials etc
• Sensitivity analysis
• Profitability measurement
Economic Feasibility (Analysis)
• Objectives against which project feasibility is to be assessed
• Identification and evaluation of project costs
• Identification and valuation of project benefits
• Benefit-cost analysis
Our feasibility studies also include other factor analysis such as the following;
• Managerial Feasibility
• Financial Feasibility
• Social and Cultural Feasibility
• Safety Feasibility
• Political Feasibility
Specifically, “Q” RENAISSANCE Management Consultants has a vast working knowledge of firms in multiple industries that have tried and succeeded and/or failed with specific business ideas and strategies. “Q” RENAISSANCE Management Consultants applies this knowledge to our clients so they repeat successes and avoid strategies that have proven to be flawed.
Once the best ideas rise to the top, “Q” RENAISSANCE Management Consultants works with clients to create action plans for executing upon them. From developing realistic operational timelines to detailed human resource plans, “Q” RENAISSANCE Management Consultants creates a comprehensive roadmap for clients to follow in order to be successful.
In developing action plans, “Q” RENAISSANCE Management Consultants often prepares comprehensive financial models so that clients understand the exact capital requirements needed to succeed. Likewise, we create realistic assumptions regarding product/service sales and costs so that results can be more accurately projected.
The financial model and action plan that “Q” RENAISSANCE Management Consultants develops not only positions clients for success from the start, but they provide an ongoing checkpoint against which the company can gauge its progress. As needed, “Q” RENAISSANCE Management Consultants provides ongoing support to modify our clients’ action plans as market conditions change and/or if existing strategies need to be optimized