Definition 

Feasibility studies summarize all aspects to determine the viability of the business, whether it is technically feasible, within an estimated cost, and will produce profits. This report will give an insight into the success probability of a business run based on internal and external factors. The external factors include the market situation, regulation, opportunities and threats, competitor analysis, and current business system. The internal factors include estimated cost, profit prediction, staffing/organization, schedule or timeline (for project-based), and more. The external and internal factor analysis will help by emphasizing the issues in the future. Therefore, the business owner can establish appropriate solutions fast.

Importance

A feasibility study is essential as it will guide your company comprehensively before penetrating the market. A feasibility study may spot risks, prevent them,  also identify other internal and external constraints. The feasibility study can help the company become far more focused. This feasibility study also exposed new opportunities and ideas that had not been recognized before. Thus feasibility study will overall increase the success probability of the company.

Methods

Some methods to construct a feasibility study are S.W.O.T analysis, Porter Five Forces, Force Field analysis, cost-benefit analysis, etc. These methods are used based on the type of feasibility study. The types of a feasibility study are the aspects of a feasibility study report. Those are technical, economic, operational, legal, and scheduling. Below is further guidance on how to create a feasibility study. 

1. Conduct a preliminary study

A preliminary study only focuses on external factors the business owner should know. It calculates all available markets, the regulations related to the business, the demand for the product or services, also the previous trend of market needs. 

2. Market research and determine the market scope

After gaining the available market information, business owners should be able to point out the prioritized market segment. The target market perspective is essential to generate a more accurate profit prediction. 

3. Overall planning 

Build a business plan, and identify and examine organizational, operational, and financial aspects of the business, including labor and estimated cost. Then, create an income statement that covers all revenue, operating budget, and profit. 

4. Create an opening day balance sheet

This sheet will reflect all about the assets and liabilities of the company, the debit, and the credit. It is from estimated capital and its usage. This sheet illustrates the beginning of the financial situation. 

5. Review all data

The team should review all data with accuracy and precision. Since much of the data will be around the financial aspect, the team may focus on this first. Then look deeper into market analysis to confirm the data conformity. Finally, decide whether the business is feasible or whether is it better to call it off.

Unlike other companies' reports, experts and officials need to establish the feasibility study. And to reduce internal conflict, third-party assistance may be necessary, such as a consultant company. PT Inspiry Indonesia Consultant can assist you in establishing your customized feasibility study based on your business needs.

Contact us via:
E-mail: inspiryindonesiakonsultan@gmail.com
Website: www.inspiryconsultant.com
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Salam Inspirasi,
apt. Syifa Amirta Sani, S. Farm