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What is a Technical Feasibility Study?
The Technical Feasibility Study assesses the details oI how you will deliver a product or
service (i.e., materials, labor, transportation, where your business will be located, technology
needed, etc.). Think oI the technical Ieasibility study as the logistical or tactical plan oI 4
your business will produce, store, deliver, and track its products or services.
A technical Ieasibility study is an excellent tool Ior trouble-shooting and long-term planning.
In some regards it serves as a Ilow chart oI how your products and services evolve and move
through your business to physically reach your market.
The Technical Feasibility Study Must Support Your Financial Information
o not make the mistake oI trying to entice investors with your staggering growth projections
and potential returns on their investment that only includes income (revenue) to the business.
With any increase in revenue there is always an increase in expenses. Expenses Ior technical
requirements (i.e., materials and labor) should be noted in the technical Ieasibility study.
You should also not strictly rely on Ieasibility study conclusions to impress an investor. An
experienced investor or lending institution will read your entire report and come to their own
conclusions. ThereIore, it is critical that the technical and Iinancial data in your study
reconcile. II other parts oI your Ieasibility study shows growth, you will also have to project
labor and other costs and the technical ability to support that growth.
The technical component serves as the written explanation oI Iinancial data because iI oIIers
you a place to include detailed inIormation about why an expense has been projected high or
low, or why it is even necessary. It demonstrates to potential investors and lenders (and in
some cases, potential clients) that you have thought about the long-term needs your business
will have as it grows.
Preparing an Outline for Writing Your Technical Feasibility Study
The order that you present technical inIormation is not as important as making sure you have
all the components to show how you can run your business.
You do not have to include speciIic Iinancial inIormation in the technical portion oI your
Ieasibility study, but all inIormation in this component must support your Iinancial data
represented elsewhere. Basic things that most businesses need to include in their technical
Ieasibility study include:
O aterials
O abor
O Transportation or Shipping
O !hysical ocation
O Technology
alculating Material Requirements
In this section you list the materials you need to produce a product or service, and where you
will get those materials. Include inIormation such as iI volume discounts will be available as
your business grows, or iI you ever plan to manuIacture your own parts at some point in time.
Things to include in your list oI materials:
O !arts needed to produce a product,
O Supplies (glue, nails, etc.), and
O ther materials that are involved in producing or manuIacturing your product.
You do not need to include actual Iinancial data in this portion oI the study but Iinancial data
supporting your narrative assessment should be included in a separate spreadsheet as an
attachment.