- October 15, 2020
- Posted by: Waqas Siddiqui
- Category: Others
Importance of Conducting a Feasibility Study
A feasibility study is conducted in order to examine if the proposed business idea or venture can be applied practically in a highly volatile and unpredictable market. With almost all the industries seeing a radical change due to the COVID-19, the need to conduct a feasibility study before setting up a business has increased. It provides a head start for the business and streamlines it, saving time and money. The key function of a feasibility study is to assess and evaluate whether it is financially feasible to invest in a business / venture etc.
There are several reasons why a feasibility study is conducted.
Conducting a feasibility study helps in determining if the proposed business / venture can sustain itself for a long term and endure different kinds of risks (economic, financial, market etc.) that may incur. It can help identify the changing consumer requirements in a post-pandemic situation and provide insights on the additional services to be provided to satisfy the consumer needs. Feasibility study also helps in identifying business opportunities and/or potential threats that can hence enable business owners, investors and companies make informed decisions.
A feasibility study (market research) is usually conducted when business owners, investors and companies intend to establish or expand new business / venture in either an existing or new market.
There are several key components of a Feasibility Study which are often combined with a Business and Financial Plan.
- Business / Venture Overview
- Economic Overview (Assess socio-economic conditions and GDP growth rate etc)
- Market Overview (Assess industry size, trends, growth and potential)
- Impact of COVID-19 on the Industry
- Post COVID-19 Situation
- Competition Overview (Evaluates major competitors, market share and positioning)
- Consumer Overview (Assess needs and demands of consumers)
- Business Model Overview (Location / Licensing / SWOT / PORTER Analysis)
- Operations Overview (Management Structure / Controls / Production / Supply Chain)
- Marketing Overview (Market Segmentation / Target Audience Profiling / Marketing Plan)
- Investment Overview (Cost & Revenue Projections / Profitability / Return on Investment)
- Opportunities & Risks
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