Industry of Business opportunity

and market Feasibility

Presented by
Nikitha
Shalu
Tanisha
Tanya Gauba
Rameshwar
 FEASIBILITY STUDY

A feasibility assessment is the disciplined and

documented process of thinking through an idea from
its logical beginning to its logical end. This is to
determine its potential to be a viable business given
the realities of the economic and social environment
WHAT IS in which it will operate. While feasibility studies are
FEASIBILITY conducted for engineering, educational and program
initiatives, our discussion in this document is limited
ASSESSMENT? to the feasibility of business initiatives. In this vein,
feasibility studies help you decide if your business
idea can be viable given its domain conditions.
TECHNICAL FEASIBILITY

A feasibility study or assessment is conducted at three

levels.
The first level involves the operational feasibility of
your idea. The question that is asked at this level is
Will it work?
The second level involves technical feasibility and its
associated question is Can it be built? Sometimes,
the first and second levels are addressed together and
simply referred to as technical feasibility.
The third and final level is economic feasibility and it
brings the operational and technical levels together
into a common unit by asking Will it make economic
sense if it works and is built? In other words, Will it
generate profits?
FEASIBILITY STUDY

There can be three possible outcomes for a feasibility

study or assessment:
Feasible within the defined domain (e.g., assumptions
relative to technology, location, market, financing,
industry analysis, etc);
Feasible with changes to certain domain factors; and
Infeasible within the defined domain.

The environment within which the feasibility is

conducted is critical since it defines the external
factors that influence the feasibility of the initiative.
 FEASIBILITY STUDY

The value chain framework for conducting feasibility

studies has the unique advantage of laying out the
project in its logical configuration from input
procurement to customer service and assessing the
technical, operational and economic feasibility at each
WHAT IS VALUE stage, and finally putting it all together to assess the
CHAIN total project feasibility. The advantage in this
approach is revealed in exposing the bottlenecks to
APPROACH? feasibility along the value chain so they can be
assessed for possible improvement.
 FEASIBILITY STUDY

The value chain approach (above) allows the two

assessments to be embedded into a single initiative,
facilitating an increased understanding and
appreciation of the domains effects on the different
stages from input sourcing and procurement to
WHAT IS VALUE customer service and support. It also facilitates an
CHAIN appreciation of the resources, technology, customer
expectations and infrastructure required for the
APPROACH? initiative to succeed, allowing an assessment of their
level and depth at each subsequent stage in the value
chain.
 FEASIBILITY STUDY

The value chain framework for conducting feasibility

studies has the unique advantage of laying out the
project in its logical configuration from input
procurement to customer service and assessing the
technical, operational and economic feasibility at each
WHAT IS VALUE stage, and finally putting it all together to assess the
CHAIN total project feasibility. The advantage in this
approach is revealed in exposing the bottlenecks to
APPROACH? feasibility along the value chain so they can be
assessed for possible improvement.
 FEASIBILITY STUDY

1. Technical Feasibility - this assessment focuses on

the technical resources available to the organization.
It helps organizations determine whether the
technical resources meet capacity and whether the
technical team is capable of converting the ideas into
TYPES OF working systems.
FEASIBILITY
2. Economic Feasibility - this assessment typically
ASSESSMENT: involves a cost/ benefits analysis of the project,
helping organizations determine the viability, cost,
and benefits associated with a project before financial
resources are allocated.
 FEASIBILITY STUDY

3. Legal Feasibility - this assessment investigates

whether any aspect of the proposed project conflicts
with legal requirements like zoning laws, data
protection acts, or social media laws.

TYPES OF 4. Operational Feasibility - this assessment involves

FEASIBILITY undertaking a study to analyze and determine
whetherand how wellthe organizations needs
ASSESSMENT: can be met by completing the project.

5. Scheduling Feasibility - this assessment is the most

important for project success; after all, a project will
fail if not completed on time.
 FEASIBILITY STUDY

When these areas have all been examined, the

feasibility study helps identify any constraints the
proposed project may face, including:
Internal Project Constraints: Technical, Technology,
TYPES OF Budget, Resource, etc.
Internal Corporate Constraints: Financial, Marketing,
FEASIBILITY Export, etc.
ASSESSMENT: External Constraints: Logistics, Environment, Laws and
Regulations, etc.
 FEASIBILITY STUDY

There are certain important types of feasibility study

which are as follows:

TYPES OF Technical Feasibility Study

Managerial Feasibility Study
FEASIBILITY Economic Feasibility Study
STUDY IN THE Financial Feasibility Study
Cultural Feasibility Study
BUSINESS Social Feasibility Study
MARKET : Safety Feasibility Study
Political Feasibility Study
Environmental Feasibility Study
Market Feasibility Study
 FINANCIAL FEASIBILITY

Financial feasibility must be differentiated from

economic feasibility. The ability of the project
management to raise sufficient funds required to
implement the proposed project is included in the
financial feasibility. Additional investors and other
sources of funds are considered by the project
FINANCIAL proponents for their projects in many cases. In such
situations feasibility, sources, soundness and
FEASIBILITY applications of these project funds may be a
hindrance. Other aspects of financial feasibility should
also be viewed, if appropriate, like credit worthiness,
loan availability, equity, and loan schedule. The
implications of land purchase, leases and other
estates in land are also reviewed in the financial
feasibility analysis.
 FINANCIAL FEASIBILITY

A financial feasibility study is an assessment of the

financial aspects of something.
However, for the purpose of establishing a business or
attracting investors, you should include at least three
WHAT IS key things in your comprehensive financial feasibility
study:
FINANCIAL
FEASIBILITY Start-Up Capital Requirements,
STUDY? Start-Up Capital Sources, and
Potential Returns for Investors.
 FINANCIAL FEASIBILITY

Major assumptions
Total project costs
MAJOR Initial working capital requirements
Alternative source of financing considered, if any
PORTIONS OF Sources of financing the project
FINANCIAL Beginning & pro-forma financial statements
Financial analyses
STUDY
INCLUDES:
 FINANCIAL FEASIBILITY

1. The Income Statement It is the computation of

the projects total revenue and costs for one
period or fiscal year, thereby arriving at the
concerns net income or deficit within the period,
TYPES OF together with its performance in terms of
profitability and cost control.
FINANCIAL 2. The Cash Flow Statement or the Cash budget It
STATEMENTS is a systematic presentation of cash receipts and
NEEDED: disbursements for a given operating period or
fiscal year.
3. The Balance Sheet It shows the assets derived
by the project from corresponding liabilities and
equities. It is an overall picture of a firms financial
condition as of a certain time.
 FINANCIAL FEASIBILITY

In order to run a business efficiently it is mandatory to

be financially feasible. Pulling all the information
together into financial units, the analyst can build the
investment, operational costs and revenue
projections over a reasonable time frame and
estimate the net present value and/or the internal
CONCLUSION: rate of return to facilitate making decision
recommendations. A project returning a positive net
present value is deemed feasible and the larger the
net present value the better.
 SOCIAL FEASIBILITY

The social impact analysis (or social feasibility

assessment) can be a very important part of the
general appraisal of projects, since many
infrastructure initiatives cause severe adverse
impacts on communities surrounding the site on
SOCIAL which they are implemented.
FEASIBILITY Social impact analysis is an exercise aimed at
identifying and analysing such impacts in order to
STUDY understand the scale and reach of the projects
social impacts. It also ensures that these impacts
are mitigated, to the extent possible, and fully
considered in the green light decision.
 SOCIAL FEASIBILITY

Social impact analysis greatly reduces the overall

risks of the project, as it helps to reduce
resistance, strengthens general support, and
allows for a more comprehensive understanding
of the costs and benefits of the project.
SOCIAL However, social impact analysis can be
FEASIBILITY expensive and time consuming, so the full
analysis process cannot be justified for all
STUDY projects. At a minimum, all projects demand a
review of project data at the Appraisal Phase, so
as to identify if material social impacts exist. If
they do, a full social impact analysis should be
conducted.
 SOCIAL FEASIBILITY

Several jurisdictions name the process of evaluating

the social feasibility as a social impact assessment,
sometimes integrated with the Environmental Impact
Assessments, and sometimes separated as an
independent evaluation.
Whether integrated or not, the exercise typically
THE PROCESS OF includes the following steps:
ANALYSING
SOCIAL IMPACTS The first step is a thorough identification of the
people residing and/or working within a projects area
of influence, including the mapping of the
communities and their social, economic, and cultural
connection with the site in which the project will be
implemented.
 SOCIAL FEASIBILITY

The second step is the establishment of a social

baseline that indicates the status of the issues to be
considered before the implementation of the project.

The third step is to estimate the impacts of the

project in the communities identified within the area
THE PROCESS OF of influence. Good practice suggests the need to
ANALYSING classify each identified impact in terms of its relative
SOCIAL IMPACTS importance, considering the number of people
affected and the reach of the damage produced.

The fourth step is the identification of the mitigation

strategies for the adverse impacts identified in the
previous steps. This leads to a social action plan.
 SOCIAL FEASIBILITY

The social impact assessment should identify the

impacts of the project in the community and classify
them in terms of significance. It also provides
recommendations for actions that can avoid,
minimize, or compensate the adverse social impacts
THE OUTPUT OF of the project.
THE SOCIAL The process of conducting the assessment also
promotes consultations that play an important role in
IMPACT creating legitimacy of the project among the
ASSESSMENT communities in which it directly engages.
The assessment indicates mitigation actions, some of
which can be implemented in the Appraisal Phase
itself, resulting in changes in the technical
requirements, project design, or other aspects of the
project.
 TECHNICAL FEASIBILITY

The Technical 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, the
technology needed, etc.).
WHAT
IS A Think of the technical feasibility study as the logistical or
tactical plan of how your business will produce, store,
TECHNICAL deliver, and track its products or services.
FEASIBILITY
STUDY ? A technical feasibility study is an excellent tool for
troubleshooting and long-term planning. In some regards,
it serves as a flow chart of how your products and
services evolve and move through your business to
physically reach your market.
 TECHNICAL FEASIBILITY

1. SELECT :
-The Product (S) &/Or Service (S)
-The Manufacturing / Production Process
-The Capacity & Design
-The Supplies
-The Location & Layout
WHAT -The Structures Specifications
SHOULD BE -The Raw Materials & their Sources
DONE? 2. DETERMINE :
-The Quantity & Quality of the Product & Service to
be produced
-The Labor needed (Both skilled & non-skilled)
-The Utilities required & Waste Disposal
-The Transportation Necessary
 TECHNICAL FEASIBILITY

3. PROVIDE :
-Estimates of the total project cost and enumerate
them major items of capital cost.

WHAT 4. LIST DOWN IN DETAIL

-The estimated production and over head costs
SHOULD BE that will go into operating the proposed project.
DONE?
5. TAKE INTO CONSIDERATION
-The major technological development in the
industry which may affect the commercial or
technical soundness of the project.
 TECHNICAL FEASIBILITY

A. THE PRODUCT(S)/SERVICE(S)
THE TECHNICAL B. MANUFACTURING/ PRODUCTION PROCESS
C. SIZE OF THE BUSINESS & PRODUCTION
STUDY IS SCHEDULES
PRESENTED BY D. PRODUCTION SCHEDULES
DESCRIBING & E. MACHINERY & EQUIPMENT
F. LOCATION
MAKING G. LAYOUT
NECESSARY H. BUILDING & FACILITIES
I. RAW MATERIALS & SUPPLIES
CALCULATIONS J. UTILITIES
FOR THE K. WASTE DISPOSAL
FOLLOWING: L. PRODUCTION COST
M. LABOR REQUIREMENT
 TECHNICAL FEASIBILITY

The order in which you present your technical

requirements is not as important as making sure that
you include all the technical requirements of your
business from production to customer receipt.

This information will help investors know more about

SUMMARY the operations of your business. Having a great idea
for a product or business is not enough; you have to
show how you can make money from the idea. The
technical feasibility study addresses the physical and
logistical mechanics of if, and how, you will be able to
get something into the product and back out the door
to customers.
Thank you