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Feasibility Analysis

Feasibility Analysis

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Published by: tarun_maurya on Feb 17, 2010
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FEASIBILITY ANALYSIS, PROJECTREPORT AND BUSINESS PLAN
STRUCTURE
5.
0 Introduction5.1 Objectives5.2 Feasibility Analysis5.2.1 Market Analysis5.2.2 Financial Analysis5.2.3 Technical Analysis5.2.4 Economic Analysis5.2.5 Ecological Analysis5.2.6 Legal and Administrative Analysis5.3 Project Report5.4 Registration5.5 Business Plan5.5.1 Need5.5.2 Contents5.6 Basic Startup Problems5.7 Summary5.8 Glossary5.9 Self Assessment Questions5.10 Further Readings
 
INTRODUCTION
 The process of setting up a business is preceded by thedecision to choose entrepreneurship as a career andidentification of promising business ideas upon a carefulexamination of the entrepreneurial opportunities. Generationof ideas is not enough; the business ideas must stand thescrutiny from techno-economic, financial and legalperspectives. That is, after the initial screening of the ideasthat do not seem promising prima facie, you should conductan in-depth examination of the chosen three-four beforesettling for the one where you would like to exert your time,money and energies. You should prepare a business planthat will serve as the road map for effective venturing,whether you may require institutional funding (in which caseit is necessary to do so) or not. Setting up of new businessenterprises is a very challenging task; you are likely toencounter many problems en route. It’s advisable to beaware of these problems as to forewarn means to fore arm!
OBJECTIVES
    
Conduct a feasibility analysis of the proposed businessideas in regard toMarketability Technical viabilityFundingLegalities
    
Prepare a business plan
    
Understand basic startup problems.
PROJECT FEASIBILITY STUDY
 
Feasibility literally means whether some idea will work ornot. It knows before hand whether there exists a sizeablemarket for the proposed product/service, what would be theinvestment requirements and where to get the funding from,whether and wherefrom the necessary technical know-howto convert the idea into a tangible product may be available,and so on. In other words, feasibility study involves anexamination of the operations, financial, HR and marketingaspects of a business on ex ante (Before the venture comesinto existence) basis. Thus, you may simultaneously readthis lesson and the lessons on marketing, finance etc. tohave a better idea of the issues involved. What we presenthereunder is a brief outline of the issues impinging upon thevarious aspects of the feasibility of the proposed project.By now, you wouldhave understood that feasibility is a multivariate concept;that is, a project has to be viable not only in technical termsbut also in economic and commercial terms too. Moreover,there always is a possibility that a project that is technicallypossible may not be economically viable. For instance, youcan construct a dust free factory in Rajasthan, but it is moreeconomically sensible to do so in Chandigarh/ Bangalore. Soeven as we take up the various aspects of feasibility one by-one, it must not mislead into believing that there is asequence and that there are no interdependencies.Examination of thefeasibility requires skills that you may fall short of. You maytake the help of the Technical Consultancy Organizations(TCOs) such as HARDICON (Haryana-Delhi IndustrialConsultancy Organization) towards this purpose. There aredistrict-wise industrial potential surveys available with theSISIs and DICs that may serve as a good starting point. Youmay also make use of the Project Reports published by thedirectorate of industries and private consulting firms.Obviously, as you use these off-the- shelf project reports,you need to re-validate their assumptions and findings andresist the temptation of jump-starting. Whether you use thealready published project reports or wish to start afresh, you

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