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Function Of A Feasibility Plan – Proof Of Business Concept

Feasibility plans help entrepreneurs – and their investors – judge whether a business concept is credible.

The process of preparing a feasibility plan is a testing process – a validation process to determine what could go wrong and what needs to go right for an enterprise to root and grow. Preparing a feasibility plan requires a tremendous amount of research and thinking, which often lead to significant changes in the original idea.

The good news is that the stronger the feasibility plan the easier the business plan is to write and the more likely it is that your business will receive financial support and succeed.

Feasibility Plan Narrative

The feasibility plan is not a formal document but it can be considered a structured formal commercial report. It is your first reality check. (The marketplace will be the real check.) As such, the plan should be very carefully thought through, extraordinarily well documented and clearly written.

A feasibility study (proof of business concept) can exist in its own right or be in part of whole a supporting document (appendix) for the formal business plan. With in a formal business plan many decisions or business models will be used and the justification for those actions must be clearly demonstrated and this is often achieved by being able to reference to findings of the original business concept feasibility study

A feasibility plan should at least touch on most issues included in the final business plan. The feasibility plan the focus is on getting the design right and testing its coherence, rather than on convincing investors and other partners to extend their support. Often the feasibility study’s validity is
demonstrated through a cost benefit analysis.

A cost – benefit analysis is a relatively simple and widely used technique for deciding whether a
business model or decision is financially viable. As its name suggests, to use the technique simply add up the value of the benefits of a course of action, and subtract the costs associated with it.

Clarity and factual evidence are more important for the feasibility plan than a convincing business presentation.