Developing A Feasibility Study

A Feasibility Study (proof of business concept) is a formalized, written approach to evaluating your business idea.

It should;
• Show you what facts and figures are needed to aid decision making.
• Show whether or not your idea is viable.
• Allow you to discover and look at alternative approaches and solutions to putting your idea into practice.

The Study should be written by you, for you, in language and in terms you can relate to about your business idea. It should include the following content.

The Business Idea

How would you describe your business idea? What is it? Will it work? How is it different from existing businesses? Who will buy from you? Can you put your idea on paper?
It is not enough simply to say “A Service business” or “A coffee shop”. Paint a picture of your business idea in words so that anyone reading this description knows exactly what you are talking about. To start your Feasibility Study – start with your business idea, on paper. Discuss it with others and adjust it as you obtain more information and ideas.

Profiles – Key People

It is not enough to have a good idea – you need people who can implement it. Who are they? Are they you, your partners, your family or any one else? Once you have identified these people you need to
determine your/their skills and strengths and whether they help or hinder in the proposed venture?

Create a one-page resume of each key person. This is not merely a job history, but a picture of each key person, showing pertinent strengths, skills, experience, training and qualifications. It will reveal to you and any potential lender, supplier, partners or agent, the operational/management strengths (and weaknesses) of you and your team. It will also show you the need to acquire any missing skills you can identify.

Personal Objectives

Why do you want to go into business? Answer – To create wealth!

Remember: business is principally a means of allowing people to achieve the things they want in their private life, like a home, cars, holidays and a good lifestyle. You need to set personal objectives. Do you know what you want in your private life? Consider Short Term – say up to one year; Medium Term – one to three years; Long term – greater than three years.

You need to sort out life objectives and ensure that the business will not only assist you in generating wealth but also facilitate your life style.

The Market

Customers: You cannot sell to everyone. So, who are your potential customers? Make a List. Why will they buy from you?

Identify your Market Segments or groups: What knowledge do you have of your market segments or groups? How many are there? What will they buy? How often will they buy? What will be their average

Products & Services: Create a list showing the products / services you will be offering to each segment. Also look at how long it will take you to produce or procure them. Determine how much it will cost to buy or produce them and how much you can sell them for. Suppliers: Identify preferred and alternative suppliers on a list and show products /services / prices on this list. Collect catalogues and brochures to assist this study.

Competition: List your competitors and show their perceived strengths and weaknesses. For each main competitor, list two good points and two bad points. You need to understand why they are competition to your proposed business. Ask the Question: How can you attract their customers from them? Price is not the only answer.

Map: Obtain a map and on it define your market boundaries, location, competitors, suppliers, and demographic information on your market.

Your Business Overview

Location – Your site, is it rented, owned, or at home? Why locate there? What are the advantages and disadvantages?