A feasibility study looks at the viability of an idea with an emphasis on identifying potential problems. It attempts to answer two main questions: Will the idea work, and should you proceed with it?
You must identify how, where, and to whom you intend to sell a service or product before you begin writing your business plan. You should also assess your competition and figure out how much money will be needed to start your business and to keep it running until it is well established.
A feasibility study addresses things like where and how the business will operate. It provides in-depth details about the business to determine if and how it can succeed, and it serves as a valuable tool for developing a winning business plan.
Why Are Feasibility Studies so Important?
The information you gather and present in your feasibility study will help you:
- Identify all the things you need to make the business work
- Pinpoint logistical and other business-related problems and solutions
- Develop marketing strategies to convince a bank or investor that your business is worth considering as an investment
- Serve as a solid foundation for developing your business plan