Feasibility study Requirement

FirstPlus Feasibility Studies Requirement

Introduction

A feasibility study is an analysis of the viability of a venture or  project idea. The feasibility study focuses on analyzing of the ability to complete a project idea successfully, taking into account legal, economic, technological, scheduling and other factors. It is used to investigate the possible negative and positive outcomes of the venture or project idea before investing much time and money.  All the activities of the study are directed toward helping answer this question: “ Is the venture or project idea feasible?.

A business project idea is feasible if

  1. it is technically feasible,
  2. It is feasible within the estimated cost, and
  3. It will be profitable.

 Therefore, a feasible business venture is one where the business will generate adequate cash-flow and profits, withstand the risks it will encounter, remain viable in the long-term and meet the goals of the owners. The venture can be either a start-up business, the purchase of an existing business, an expansion of current business operations or a new enterprise for an existing business.

The result of the feasibility studies is documented in a feasibility report which is designed to provide an overview of the primary issues related to the viability of the business venture.  Its purpose is to identify any “make or break” issues that would prevent the business venture from being successful in the marketplace. Therefore a well written feasibility report contains a lot of information necessary for planning and executing the business venture.

Components and Structure of the feasibility report

After the above have been done, then the feasibility report is written in an acceptable and implementable manner that can aids analysis. All the above put together, a feasibility report that will guide the business venture and aid decision making must have the following sections:

  • Executive Summary: The summary of the whole report.
  • Background : Brief description of the company, organization, business, limit and scope of study
  • Market Analysis: It describes the Domestic market profile, Oversea market profile, Target market and Overall market feasibility and analyzes the potential customers and competitions, who and where they are, what makes customers to buy and how to position the business in the market.
  • Marketing Strategy: Analyzes strength, weakness, opportunities and threats for the business and develop strategy for capturing your market niche
  • Operations and production plan: that describes the technical and technology issues and developed operations and production strategy,
  • Management and personal plan :Organizational analysis/Plan
  • Financial Plan: this section contains the5-years projected financial plan made up projected financial statements like Income and Loss Statement, Cash-flow Statement, Balance sheet and financial objectives and assumptions
  • Financial Analysis: Evaluation of the feasibility using financial ratio (like break-even analysis, Gross Profit Margin And Net Profit Margin, Return On Equity And Return On Assets, Earning Per Share, Current ratio, Return on capital employed, Assets turnover and so on) computed from the project financial statement and financial analysis summary
  • Conclusion and recommendation
  • Appendices

If the recipient of feasibility report demanded for a special requirement, it will be presented as required.

Requirements from clients

Presented below is a list of the basic requirements for feasibility studies and business plan from our clients. It is necessary to note that most of the items below is required if the company/business is already in existence. However, if there is any item listed below that the clients do not have, just let us know.

  1. Business details: Name, address, and contact person
  2. Business description:
  3. Type of business (franchise, self-owner etc.)
  4. Industry of operation
  5. Ownership structure and financial contribution (if there is ownership expansion)
  6. Incorporation details: type and year of incorporation, date of starting business and etc.
  7. Management team: List of key management team members, designation, role, business experience, qualification, knowledge and skills. This may include succession plan if there is any.
  8. Organizational structure and number of employees:
  9. Three years Audited account if available
  10. Other issues like insurance policy, staffing policy, the risks in the business and so on.

Business Operations

  1. Purpose of business- present or proposed future business
  2. Briefly explain the current business concept or operations or activities and proposed future business activities, perhaps the need it satisfies or gaps in the market.
  3. Describe the products and services you currently manufactured or sold also proposed products.
  4. The places (regions/states/town) your products are being sold or will be sold.
  5. If possible projected sales.

Business environment: Suppliers, Customers and competition

  1. List of potential Suppliers
  2. List of future suppliers
  3. List of potential customers
  4. List of targeted customers
  5. List of potential competitors and market share, threats that exist from competitors and your business competitive advantage.

(it may be necessary to group them into sectors or some kind of classification)

Manufacturing –Production

This section is for businesses that are into manufacturing of goods.

  1. Briefly description of the production or manufacturing process.
  2. Specify the production capacity of each product.
  3. Description of the major equipment being used in the manufacturing process.
  4. Cost of production: Cost of raw materials and Marginal cost of production
  5. Types of inventory: average value of raw materials, work-in-progress, finished goods and so on

Marketing: Description of previous marketing strategy adopted or new ones.

Purpose of the business plan/feasibility study and specific requirements and Funding:

Thank you very much