FEASIBILITY

STUDIES

Presenter:
Imee G. Apostol
Understanding Business Feasibility Study

- a thorough study of an activity or a business that would

be undertaken; it is done so in order to decide whether the
business is feasible or not to be undertaken.
Understanding Business Feasibility Study

INVESTMENT UNDERSTANDING
Based on William F. Sharfe, INVESTMENT is about sacrificing money now for the
money in the future.

Kinds of Investment:

1. Real Investment
2. Financial Investment
Understanding Business Feasibility Study
PROJECT UNDERSTANDING
Generally, PROJECT is a kind of activity which involves many resources that are
available within a particular bucket (organization) in a particular period of time to do an
activity that has been assigned before or to achieve a particular goal.

Project’s activities include :

1. Building of new facilities

2. Repair of current facilities
3. Research and development
Understanding Business Feasibility Study
PROJECT UNDERSTANDING
How do projects appear :

1. A market demand
2. To increase a product’s quality
3. Government’s activity
Understanding Business Feasibility Study

BUSINESS UNDERSTANDING
 Is an activity or effort that had been done to get benefit based on a purpose and the target
business that was done in order to achieve profit according to the goal and the target
aimed in many aspects, whether it be quantity or time.

 Profit is the main reason within a business, whether it be short term or long term.
Understanding Business Feasibility Study

BUSINESS UNDERSTANDING
Business Benefits:

 Achieving profits
 Providing employment
 Providing facilities
 Opening geographic isolation
 Increasing unity and helping the solidity of development
Understanding Business Feasibility Study

BUSINESS UNDERSTANDING

Economy Benefits:

 Increasing amount of goods and services

 Increasing the product’s quality
Understanding Business Feasibility Study

BUSINESS UNDERSTANDING

Factors That Causes Failure in Business:

 Data and information that are not sufficient

 Wrong direction of work
 Environment condition
 Element of deliberateness
 Miscalculation
Understanding Business Feasibility Study

BUSINESS UNDERSTANDING

Preventing Business Failure:

 Fulfilling and also the accuracy of data and information taken

 Specialist workers that are used are reliable and good
 Selecting the right methods and measuring tool.
 Loyalty from the Business Feasibility Study team
 A Feasibility Study (FS) is the analysis
1.1. of a problem to determine if it can be
solved effectively.

FEASIBILITY The results determine whether the

2.2. solution should be implemented.

STUDY
This activity takes place during the
3.3. project initiation phase and is made
before significant expenses are
engaged.

A feasibility study looks at the viability of an idea with an emphasis on identifying potential problems and attempts to answer one
main question: Will the idea work and should you proceed with it?
 OBJECTIVE
The feasibility study answer the
basic question: Is it realistic to
address the problem or the
opportunity under
consideration?
It produce a final proposal
for the management, this
final report might include:
Feasibility includes:
 Project name
 Problem or opportunity definition
 Project description
 Expected benefit
 Consequence of rejection
 Resource requirements
 alternatives
 Other consideration
 Theorization
FEASIBILITY STUDY

BUSINESS SUCCESS

 Establishing a feasibility study of projects is a critical factor in business success.

 Many factors can be involved and invariably luck can and probably will play a hand.

KEY FACTOR

A key factor in any feasibility study must be ensuring that you are dealing with correct facts, correct
assumption, and up to date financial data.
 5.
1. Makes controlling
easier
Avoiding non-
profitable risks
Reasons in Studying
Business Feasibility
Makes

Makes 4. watching
over staff
2. planning
easier
easier
Makes initiating work
3. easier
Organizations that needs Business Feasibility Study

Business owners Creditor Government

xx xx xx

The citizen Management

xx xx
Feasibility Aspects

1. Law aspect
2. Market and marketing aspect
3. Financial aspect
4. Technical/Operation aspect
5. Management/Organization aspect
6. Social economics aspect
7. Environmental issue aspect
Steps in Business Feasibility Study

1. Acquiring Data and Information

2. Data Processing
3. Data analysing
4. Decision making (if not feasible, abort, if
feasible, proceed)
5. Recommendation
THE COMPONENTS OF A FEASIBILITY STUDY
1. Description of the Business: The product or services to be offered and how
they will be delivered.

2. Market Feasibility: Includes a description of the industry, current market,

anticipated future market potential, competition, sales projections, potential
buyers, etc.

3. Technical Feasibility: Details how you will deliver a product or service (i.e.,
materials, labor, transportation, where your business will be located,
technology needed, etc.).
THE COMPONENTS OF A FEASIBILITY STUDY
4. Financial Feasibility: Projects how much start-up capital is needed, sources
of capital, returns on investment, etc.

5. Organizational Feasibility: Defines the legal and corporate structure of the

business (may also include professional background information about the
founders and what skills they can contribute to the business).

6. Conclusions: Discusses how the business can succeed. Be honest in your

assessment because investors won’t just look at your conclusions they will also
look at the data and will question your conclusions if they are unrealistic.
 1. Technology and system feasibility

1.
Common 2. Economic feasibility

factors of
Feasibility 3.
2.
Legal feasibility

Study
4. Operational feasibility
(TELOS)
3.
5. Schedule feasibility
  The assessment is based on an outline
design of study requirements in terms of
Input, Processes, Output, Fields,
Programs, and Procedures.
1. Technology
 This can be quantified in terms of
and system volumes of data, trends, frequency of
feasibility updating, etc. in order to estimate whether
the new study will perform adequately or
not.
 NEED TO CONSIDER:
 Is the proposed technology or solution
practical?
 Do we currently possess the necessary
1. Technology technology?
and system  Do we possess the necessary technical
expertise
feasibility  …and is the schedule reasonable for this
team?
 Is relevant technology mature enough to
be easily applied to our problem?
 NEED TO CONSIDER:
 What kinds of technology will we need? Some
organizations like to use state-of-the-art
technology…but most prefer to use mature and
proven technology. A mature technology has a
larger customer base for obtaining advice
1. Technology concerning problems and improvements.
 Is the required technology available “in house”?
and system  If the technology is available, does it have the
capacity to handle the solution?
feasibility  If the technology is not available, can it be
acquired?
  Economic analysis is the most frequently used
method for evaluating the effectiveness of a new
study. More commonly known as cost-benefit
analysis, the procedure is to determine the
benefits and savings that are expected from a
2. Economic candidate study and compare them with costs. If
benefits outweigh costs, then the decision is made
feasibility to design and implement the study. An
entrepreneur must accurately weigh the cost
versus benefits before taking an action. Time
Based: Contrast to the manual system,
management can generate any report just by single
click .
 NEED TO CONSIDER:
 Can the bottom line be quantified yet?
 Very early in the project…
 a judgement of whether solving the problem
2. Economic is worthwhile.
 Once specific requirements and solutions have
feasibility been identified, the costs and benefits of each
alternative can be calculated.
 NEED TO CONSIDER:
 Cost-benefit analysis
 Purpose - answer questions such as:
 Is the project justified (i.e. will benefits
outweigh costs)?
2. Economic  What is the minimal cost to attain a certain
study?
feasibility  How soon will the benefits accrue?
 Which alternative offers the best return on
investment?
 Examples of things to consider:
 Hardware/software selection
 Selection among alternative financing
arrangements (rent/lease/purchase)
 3.  Determines whether the proposed system conflicts
with legal requirements, e.g. a data processing
Legal system must comply with the local Data
Protection Acts.
feasibility
  Is a measure of how well a proposed system
4. Operational solves the problems, and takes advantages of the
opportunities identified during scope definition
feasibility and how it satisfies the requirements identified in
the requirements analysis phase of system
development.
 NEED TO CONSIDER:
 How do end-users and managers feel about…
…the problem you identified?
…the alternative solutions you are
exploring?
4. Operational  You must evaluate:
 Not just whether a system can work… but
feasibility also whether a system will work.
 NEED TO CONSIDER:
 Any solution might meet with resistance:
 Does management support the project?
 How do the end users feel about their role in
the new system?
4. Operational  Which users or managers may resist (or not
use) the system?
feasibility  People tend to resist change.
 Can this problem be overcome? If so, how?
 How will the working environment of the end
users change?
 Can or will end users and management adapt
to the change?
  A project will fail if it takes too long to be
completed before it is useful. Typically, this means
estimating how long the system will take to
develop, and if it can be completed in a given time
5. period using some methods like payback period.
Schedule feasibility is a measure of how
Schedule reasonable the project timetable is. Given our
feasibility technical expertise, are the project deadlines
reasonable? Some projects are initiated with
specific deadlines. You need to determine whether
the deadlines are mandatory or desirable.
 NEED TO CONSIDER:
 How long will it take to get the technical
expertise?
 We may have the technology, but that doesn't
5. mean we have the skills required to properly
apply that technology.
Schedule  May need to hire new people
 Or re-train existing systems staff
feasibility  Whether hiring or training, it will impact the
schedule.
 Assess the schedule risk:
 Given our technical expertise, are the project
deadlines reasonable?
 If there are specific deadlines, are they
mandatory or desirable?
UP NEXT:
Other Feasibility Factors
Online References:
https://ghhllc.com/blog/civil-engineering-blog-bid-258756-what-are-feasibility-studies
https://www.marketing91.com/19-types-of-business-industries/
https://www.investopedia.com/terms/f/feasibility-study.asp#:~:text=A%20feasibility%20study%20considers%20
many,might%20include%20revenue%20from%20consumers
.
http://www.solidswiki.com/index.php?title=Feasibility_Studies#:~:text=can%20be%20based.-,Five%20common
%20factors,Legal%2C%20Operational%2C%20and%20Scheduling
.
Thank You!