Running a business successfully, in these modern times, is tough. The only task standing in its comparison, is that of starting up a new business. Even with a proper plan, a lot of businesses still tend to fail in the practical world. Over the course of years, experts have tried to come up with various measures and techniques to avoid such failures. One of the said techniques, is a feasibility study.
A feasibility study is an analysis of the risk factors and benefits that could potentially affect the success of a project or a business. In simpler words, a feasibility study is an assessment of the viability or practicality of a suggested plan. A good study is one that can answer questions such as; Do we have enough resources and finances to undergo this project? Will the return on investment (ROI) be up to our expectations? What improvements and upgrades could be made to the plan to make it more efficient?
There are 5 types of feasibility studies: Economical, technical, operational, schedule and legal feasibility. Each of the mentioned studies provides the managers of the projects with a different point of view in the evaluation of feasibility. The aim of this is:
– To achieve a thorough understanding of every aspect of the proposed plan.
– To create an awareness of the potential threats and opportunities in the business market.
– To determine how to best put at use the strengths and weaknesses at our disposal.
– To deem a project worthy/unworthy to carry out after the complete research.
It is a common misconception that feasibility studies are ‘irrelevant’ and ‘means to make easy money’. People without the proper knowledge are inclined to believe that existing businesses with the same operational activities as the one they plan to start up, are an indication of the market of the product working quite favorably. However, what they fail to grasp is the fact that sometimes old businesses work effectively because of customer loyalty and having regional monopoly of the product and there is not really enough room or opportunities for a new business start-up. Some people often fail to realize the need of a recent and up-to-date feasibility study and plan their projects on the results of previous studies. This can have major drawbacks. The study conducted previously, might be relevant for that particular publishing date. Nevertheless, market behaviors and consumer wants and needs change quite frequently.
A product might have matched the criteria mentioned in a previous study and yet not hold stability in the present market. Therefore, a fresh study is extremely essential. A lot of people skip the feasibility study in order to save time and money, and in most cases, it has almost the opposite effect. The study is mapped out to assist business owners and managers in making better decisions so that they do not waste their money and time in projects that wouldn’t have the required ROI or growth in the long term. The importance of the study is hence proved.
Though the studies can seldom be proven wrong, habitually these play a key role in the success of a business and are often recommended. Existing businesses need it when launching a new product or service, or a promotional offer, and entrepreneurs who want to put their start up plan into action, need these studies for precautionary measures. Wherever you may be in the market, this works well for all. We hope it does for you too and we wish you and your business all the prosperity and success. May the markets always fare well.
Mr. Muffadal Emran Ali from Greenland Market Research Company Dubai, and Akash Pervaiz from Excellent Research LLC have contributed in this article. They have been in the market research industry for more than a decade now and possess great knowledge of Market research and consultancy.