Feasibility Study

Feasibility studies are market research studies that assess the viability of a new business venture. The goal of a feasibility study is to assess the strengths and weakness of a product, team, and business model. Then, after exhaustive market research, to determine the resources required to execute the plan and the prospects for success. Components of a feasibility study include:

• Technical feasibility – is the product ready for market today?
• Market feasibility – is there a large market ready to adopt the product?
• Economic feasibility – do the numbers make sense?
• Financial feasibility – are the required investment and returns in sync?
• Operational feasibility – are the team and resources in place?
• Competitive feasibility -will the competitive landscape accept a new entrant?

Process of Conducting a Feasibility Study

A feasibility study is conducted by first interviewing future management. Next is exhaustive secondary market research about the industry. This is done through Internet research, reading trade publications, and speaking to trade organizations. The next step is to talk to people in the industry – current operating companies, vendors, and customers. A great resource is people who have invested in the industry, including professional investors and entrepreneurs. They are great sources of information for the key success factors in the industry, capital requirements, ideal entrepreneur backgrounds, etc.

A key discovery in a feasibility study consulting process is uncovering the industry “pain points.” Typically, entrepreneurs will have knowledge of and desire to enter an industry. However, a “me too” entry strategy is often not the optimal choice. In our feasibility studies, we will make “go / no go” recommendations and suggestions of how to improve the business model. Your business focus will sharpen and change for the good after a thorough feasibility study.

Cost and Timeline

A feasibility study typically takes 4 to 6 weeks to complete from start to finish. The price can range significantly based on novelty and complexity. Feasibility studies can range wildly from $5,000 to hundreds of thousands of dollars. However, the average assignment is between $5,000 to $10,000. Since a feasibility study includes exhaustive market research, and market research is a significant part of writing a business plan, commissioning both together results in a significant discount versus buying them separately.