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Feasibility Study vs. Business Plan: Describes The Company, Its Goals
Feasibility Study vs. Business Plan: Describes The Company, Its Goals
A feasibility study also determines whether a project makes good business sense, i.e., will it be profitable?
Put simply; the study is an analysis of how easily or successfully we could complete something. It also tries to determine how profitable or unprofitable it might be.
When large sums of money are at stake, companies and organizations typically carry out feasibility studies.
The study aims to flesh out the possibilities in that business idea.
The business plan, on the other hand, describes the company, its goals, strategies, and financial projections (forecasts).
A feasibility analysis tells you whether something will work. A business plan tells you how it will work.
Definition of feasibility
The word ‘feasibility‘ means the degree or state of being easily, conveniently, or reasonably done. If something is ‘feasible,’ it means that we can do it, make it, or
achieve it. In other words, it is ‘doable’ and also ‘viable.’
A viable business, for example, is one we expect will make a profit every year for a long time.
On an Iowa State University webpage, Mary Holz-Clause and Don Hofstrand write:
“The feasibility study focuses on helping answer the essential question of ‘should we proceed with the proposed project idea?’ All activities of the study are
directed toward helping answer this question.”
A viability study is similar to a feasibility study. However, the viability study only looks at how profitable or commercially successful an idea or project might be. It
does not determine whether something is doable.
According to BusinessDictionary.com, a feasibility study is: “An analysis and evaluation of a proposed project to determine if it (1) is technically feasible, (2) is
feasible within the estimated cost, and (3) will be profitable.”
The people carrying out the study will take into account labor and material costs. They will also take into account how disruptive the project might be for staff and
patients.
The study may have to gauge public opinion regarding the new extension. In other words, would the local community be in favor or against such a project?
It is important to determine how the stakeholders will respond. A stakeholder is a person with an interest or concern in a project, business, or organization.
Hospital stakeholders are, for example, doctors, nurses, other hospital staff, patients, hospital visitors, and the hospital’s owner. Members of the local community
may also be stakeholders.
Those conducting the study go through all the pros and cons of the project. They then weigh them against each other. Finally, they determine whether it is a good
idea to go ahead.
Video explanation
Apart from explaining what a feasibility study is, the speaker also shows how it is different from a business plan.