What is a feasibility study?

Definition and examples

A feasibility study is an evaluation and analysis of a project or system that somebody has proposed. We
also call it a feasibility analysis. The study tries to determine whether the project is technically and
financially feasible, i.e., is it technically or financially viable? Financially feasible, in this context, means
whether the project is feasible within the estimated cost.

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.

Feasibility study vs. business plan

The term is similar to a business plan, but the meaning is not the same. When somebody has an initial
business idea, the company carries out a feasibility study.

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:

“A feasibility study is an analysis of the viability of an idea.”

“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.

Feasibility Study

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.”