10-04-2017, 09:02 PM
As the name implies, 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.
Feasibility studies can be used in many ways but primarily focus on proposed business ventures. Farmers and others with a business idea should conduct a feasibility study to determine the viability of their idea before proceeding with the development of a business. Determining early that a business idea will not work saves time, money and heartache later.
A feasible business venture is one where the business will generate adequate cash-flow and profits, withstand the risks it will encounter, remain viable in the long-term and meet the goals of the founders. The venture can be either a start-up business, the purchase of an existing business, an expansion of current business operations or a new enterprise for an existing business. Information File C5-66, Feasibility Study Outline is provided to give you guidance on how to proceed with the study and what to include. Also, Information File C5-64, How to Use and When to Do a Feasibility Study will help you through the process and help you get the most out of your study.
A feasibility study is only one step in the business idea assessment and business development process (Information File C5-02). Reviewing this process and reading the information below will help put the role of the feasibility study in perspective.
Evaluate Alternatives
A feasibility study is usually conducted after producers have discussed a series of business ideas or scenarios. The feasibility study helps to frame and flesh-out specific business scenarios so they can be studied in-depth. During this process the number of business alternatives under consideration is usually quickly reduced.
During the feasibility process you may investigate a variety of ways of organizing the business and positioning your product in the marketplace. It is like an exploratory journey and you may take several paths before you reach your destination. Just because the initial analysis is negative does not mean that the proposal does not have merit. Sometimes limitations or flaws in the proposal can be corrected.
