Feasibility Study Course
Purpose of the Feasibility Studies Course:
To help business owners prepare and write a
comprehensive feasibility study that will serve
as a basis for creating a small business plan
and marketing plan.
This is a self-paced course
with step-by-step instructions on how to
research, write, and present a feasibility study
for small or large businesses.
Skill Level Required to Complete This
is a beginning level course, assuming that you
have little or no knowledge of starting a
It is also ideal for anyone who has
never created a feasibility study, marketing
plan, or business plan before, or who needs
To complete this
course you will need:
access to conduct research about your industry;
sheet to create financial information; and
processing software to type the final document.
How to Prepare and Write Small Business
Feasibility Study Course Syllabus:-
Lesson 1 = What is a Feasibility
This will teach you basic information about the
nature and purpose of a feasibility study, how
it differs from a marketing study, and why you
should prepare a feasibility study before your
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?
Before you begin writing your business plan you
need to identify how, where, and to whom you
intend to sell a service or product. You also
need to assess your competition and figure out
how much money you need to start your business
and keep it running until it is established.
Feasibility studies address things like where
and how the business will operate.
in-depth details about the business to determine
if and how it can succeed, and serve as a
valuable tool for developing a winning business
Why Are Feasibility Studies so
The information you gather and present in your
feasibility study will help you:
detail all the things you need to make the
logistical and other business-related problems
marketing strategies to convince a bank or
investor that your business is worth considering
as an investment; and
Serve as a
solid foundation for developing your business
Even if you have a great business idea you still
have to find a cost-effective way to market and
sell your products and services.
especially important for store-front retail
businesses where location could make or break
For example, most commercial space leases place
restrictions on businesses that can have a
dramatic impact on income.
A lease may limit
business hours/days, parking spaces, restrict
the product or service you can offer, and in
some cases, even limit the number of customers a
business can receive each day.
Lesson 2 = How to Write a Market
This will give you step-by-step instructions on
how to prepare the market components of
feasibility studies, including a description of
the industry, current market, anticipated future
market potential (industry trends), competition,
sales projections, potential customers and
clients, and other revenue-generating resources.
What is a Market Feasibility Study and How
Does a Market Feasibility Study Differ From a
studies should look at how things work,
if they will work, and identify potential
problems. Feasibility studies are done on ideas,
campaigns, products, processes, and entire
studies assess something and consider both pros
They analyze potential business
A Marketing Plan maps out specific
ideas, strategies, and campaigns based on
feasibility study investigations, that are
intended to be implemented.
Think of market
feasibility studies as a logistical study and a
marketing plan as a specific, planned course of
action to take.
What Should be Included in a Market
Things to Include
in a market feasibility study include:
Description of the Industry
Anticipated Future Market Potential
Buyers and Sources of Revenues
Lesson 3 = How to Write a
Technical Feasibility Study
This will focus on the technical and logistical
aspects of how your business will produce,
store, and deliver its products or services.
technical feasibility includes the details of
how you will deliver a product or service (i.e.,
materials, labor, transportation, where your
business will be located, technology needed,
What is a Technical Feasibility Study?
Feasibility Study assesses the details of how
you will deliver a product or service (i.e.,
materials, labor, transportation, where your
business will be located, technology needed,
Think of the technical feasibility study
as the logistical or tactical plan of how
your business will produce, store, deliver, and
track its products or services.
feasibility study is an excellent tool for
trouble-shooting and long-term planning.
regards it serves as a flow chart of 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
Do not make the
mistake of trying to entice investors with your
staggering growth projections and potential
returns on their investment that only includes
income (revenue) to the business.
increase in revenue there is always an increase
Expenses for technical requirements
(i.e., materials and labor) should be noted in
the technical feasibility study.
You should also
not strictly rely on feasibility study
conclusions to impress an investor.
experienced investor or lending institution will
read your entire report and come to their own
conclusions. Therefore, it is critical that the
technical and financial data in your study
If other parts of your feasibility
study shows growth, you will also have to
project labor and other costs and the technical
ability to support that growth.
component serves as the written explanation of
financial data because if offers you a place to
include detailed information 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 information is not as
important as making sure you have all the
components to show how you can run your
You do not have
to include specific financial information in the
technical portion of your feasibility study, but
all information in this component must support
your financial data represented elsewhere.
things that most businesses need to include in
their technical feasibility study include:
Transportation or Shipping
Calculating Material Requirements
In this section
you list the materials you need to produce a
product or service, and where you will get those
Include information such as if volume
discounts will be available as your business
grows, or if you ever plan to manufacture your
own parts at some point in time.
Things to include
in your list of materials:
needed to produce a product,
(glue, nails, etc.), and
materials that are involved in producing or
manufacturing your product.
You do not need
to include actual financial data in this portion
of the study but financial data supporting your
narrative assessment should be included in a
separate spreadsheet as an attachment.
Lesson 4 = How to Write a
Financial Feasibility Study
This will give you the instructions for business
entrepreneurs on how to prepare the financial
component of feasibility studies.
start-up capital, identify and list sources of
capital, and estimate potential returns on
What is a Financial Feasibility Study?
feasibility study is an assessment of the
financial aspects of something.
If this case,
for starting and running a business.
considers many things including start-up
capital, expenses, revenues, and investor income
and disbursements. Other portions of a complete
feasibility study will also contribute data to
your basic financial study.
feasibility study can focus on one particular
project or area, or on a group of projects (such
as advertising campaigns).
However, for the
purpose of establishing a business or attracting
investors, you should include at least three key
things in your comprehensive financial
Capital Sources, and
Returns for Investors.
Start-Up Capital Requirements
is simply how much cash you need to start your
business and keep it running until it is
You should include enough
capital funds (cash, or access to cash) to run
the business for one to two years.
Finding Start-Up Capital Funding Sources
There are many
ways to raise capital for your business, but no
matter what route you take, investors are more
likely to invest, banks are more likely to
approve loans, and large corporations are more
likely to give you contracts, if you have
personally invested into the business yourself.
When you make a
list of funding resources, be sure to include
anything that you can contribute to the
business, including free labor.
If you are
starting a nonprofit organization, your donated
professional time may even be tax deductible for
Lesson 5 = Organizational
Structure Feasibility Study
This will cover the important details of your
business' organizational structure to help make
your feasibility study and business plan more
attractive to potential investors and clients.
An Organizational Feasibility study defines the
legal and corporate structure of the business,
and offers pertinent professional background
information about the founders, partners, and
other principals involved in the business.
Purpose of an
Organizational Feasibility Study:
To define the legal and corporate structure of
An Organizational Feasibility
Study may also include professional background
information about the founders and principals of
the business and what skills they can contribute
to the business.
Your organizational feasibility study should
Description of Your Business Structure
Description of Your Organizational Structure
and External Principles and Practices of the
Professional Skills and Resumes
of Your Business Structure
This section contains a narrative description of
the legal requirements for establishing your
business and why you feel this is the right
structure for your business.
Discuss the pros
and cons of different business structures.
For example, a sole proprietorship leaves the
sole proprietor open to both financial and legal
A high-risk business should
never be set up as a sole proprietorship because
it will make it difficult to attract investors
as well as clients and customers.
It is also the
hardest and most expensive form of business to
If you wish to become a tax-exempt organization,
you will need to incorporate, file for tax
exemption with the IRS (and, in some cases,
within your own state), and set up a board of
directors and officers of the corporation.
will also need to decide if your organization
should be a membership, or non-membership
Discuss your business’ organizational structure.
One of the best ways to present this information
is with an organizational chart.
An organizational chart shows the hierarchy, or
chain of command in your business. It lists key
positions and subordinate positions under
department heads, supervisors, and managers.
Lesson 6 = How to Write
Feasibility Study Conclusions
This is an important part of the Feasibility
Study writing process because you need to draw
conclusions that you want your investors and
potential customers to see.
It is critical that
your data and other information support your
You need to provide instructions on
drawing and summarizing conclusions from
information in a feasibility study.
Tips for Writing a Professional Conclusion
When you write a
document or prepare your own financial
statements it may be easy for you to draw
conclusions. But what you see may not
always be obvious to your readers.
should state facts and information that you need
to make sure the reader understands.
especially important when you are writing a
comprehensive feasibility study because it has
many parts that all need to be tied in together
in a summarized conclusion.
Remember that a
feasibility study is just that, a study.
conclusions need to be based on research,
verifiable information, and not on a simple
belief that your idea can work.
how the business can succeed. Explain why, using
research-based information, not opinions, that
is contained in your study.
business idea takes a nontraditional approach to
something, explain why this approach will help
For example, most restaurants do
not survive beyond two years. What makes your
idea different and more likely to succeed?
reader back to the location of any examples you
give by listing section, page title and page
the most important points you need to make. Do
not attempt to cover minor or unimportant
summary or conclusion should be concise, no
longer than one to two pages and written in
attempt to persuade the reader with jargon or an
advertising pitch; feasibility study findings
should be objective and based on research and
information in the study.
using phrases like “I believe,” or “in my
opinion,” “I hope, “I anticipate.” Do use
strong, impersonal phrases like “research
supports that this industry will continue to
summarized conclusion helps to develop an
overall impression, but should not replace the
supporting documents. Be sure to submit the
summary as part of the feasibility study, not as
Lesson 7 = Presenting a Completed
This is last,
but important lesson, offers guidelines on how
to assemble your entire Feasibility Study
together in a professional-looking package.
and Practices of the Business
Every business should have a published code of
ethics and principals that govern how the
company conducts its business. In this section,
include both internal and external principals of
Operations Business Principles and Practices
that are incorporated must have a board of
directors. Do you have a conflict of interest
policy in place? Will you use “Robert’s Rules”
for conducting meetings?
offer services where clients need to be screened
for eligibility for financial aid, social
services, or are there other pre-requisite
requirements such being a senior citizen,
minority, or disabled?
have hiring and employee training and management
practices in place?
have an overall corporate philosophy that
inspires, encourages, or offers incentives to
have an anti-discrimination policy in place?
Business Practices and Principles
Do you have a customer policy or philosophy?
Examples of client/customer philosophies
We do not
serve clients; we team with clients to meet
creativity and imagination and use these to our
employees maintain high ethical standards that
reflect on how we treat our clients.
Skills and Resumes
A business’ strengths come from the talent,
skills, and experience of those running the
In this section, you give a brief
overview of all founders, employees, and
partners involved in the business that will be
contributing their skills and input into how the
business is operated.
You should also include
any board members, directors, and officers.
Include in your list of principals (most
important people in your business or
organization), a brief overview of how their
particular skills will serve the business.
can also include accomplishments that relate to
It is also beneficial to attach resumes for at
least the top three principals listed.
Assemble Your Feasibility Study
How you present your final study is just as
important as the information it contains.
have a lot of material put it in a portfolio or
Finding information easily and quickly
is important to busy lenders and investors, so
include tabs (type them it at all possible) to
indicate each component in your study.
Cover letters should not be generic, but should
be individualized depending upon who you are
submitting the study to.
Before you actually submit your study, have
someone else proofread it for you to check for
content and errors. Typographical errors will
make your study appear rushed or unprofessional
and if your descriptions and calculations do not
make sense to the reader they are worthless.
Although you write your conclusion last, it
serves as a summary of all the detail in your
You can place it at the end of your
document (before any exhibits and attachments),
but placing it first (after the table of
contents) sets the tone and identifies key
issues for the reader to be aware of even before
they read the rest of the study.
The following is a checklist of components that
should go into your complete feasibility study.
___ Cover Letter
___ Cover Sheet
___ Table of Contents
___ Description of Your Business (what you do, a
list or products or services, and how you
deliver products or services)
___ Feasibility Study Conclusions
___ Market Feasibility Study
___ Organizational Feasibility Study
___ Technical Feasibility Study
___ Financial Feasibility Study
___ (Optional) Legal Risks Feasibility Study
___ Attachments (spreadsheets)
___ Exhibits or Appendices (statistics, graphs,
examples, literature, contracts, samples, etc.)
feasibility study is a process in which you look
at an idea to see if it is “feasible,” that is,
if and how it will work.
comprehensive feasibility study looks at the
entire structure, needs, and operations of a
or project feasibility study looks at one
specific task, program, idea, or problem.
feasibility study looks at both sides,
considering pros and cons, and troubleshoots
feasibility study is not a business plan, but
serves as a foundation for developing your
feasibility study is not a marketing plan, but
studies markets and market potential, and can be
used to support or develop a marketing plan.
In addition to a business plan, an
investor or lending institution may require you
to submit a feasibility study before considering
your request for capital.