MODULE 6 THE FEASIBILITY STUDY

THE FEASIBILITY STUDY and

BUSINESS PLAN
INTRODUCTION
This module is intended to assist the students of this subject in the preparation of
feasibility study, a business plan and project proposal; all of which are important tool to
ensure the success of any entrepreneurial or business undertaking.
The feasibility study is an exploratory and evaluation tool used to determine
whether an intended venture idea is viable or not. The business plan is prepared with the
intent to serve as a “blueprint” in the operation of the business. A project proposal is
prepared with the intention of seeking funding support from funding or lending institutions.
Preparation of business plan or project proposal is always preceded by the
preparation of feasibility study; both use information obtained through the feasibility study.
The business plan is conducted after the feasibility. The project proposal is prepared after
the business plan, as shown in the figure below:

FEASIBILITY STUDY BUSINESS PLAN PROJECT PROPOSAL

This module will focus solely in the preparation of feasibility study, and if time forbids
student will prepare also a business plan. The feasibility format that the class will use will
be based on the DA-MEMO-ORDER-61.
The entire topic for the feasibility and business plan will be divided into different sub-
modules, but all of which will be under on this subject.

LEARNING OBJECTIVES
At the end of the semester, the students are expected to:
1. Prepare a market feasibility study
2. Prepare a production/technical feasibility study
3. Prepare the organizational feasibility study
4. Prepare a financial feasibility study
4. Prepare a financial feasibility study
5. Prepare a business plan
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LEARNING OUTCOMES
At the end of this module, the students are expected to;
1. Understand the important key words for feasibility study in lined with agriculture;
2. Prepare an agricultural market study.
LEARNING PLAN

I. Key Terms
A project feasibility study is an analytical report of the assessment of a project
concerning its market, technical, financial, socio-economic and management feasibilities.
It is the culmination report of all the preparatory work that provides comprehensive review
of all aspects of the project before a final decision about its implementation is taken. A
standard feasibility study (FS) contains the following parts which provides the basis for
evaluation: (a) Project summary, (b) Market Feasibility, (c) Technical Feasibility, (d)
Financial Feasibility, (e) Socio-economic Feasibility, and (f) Management Feasibility.
A project proponent is an entity, individual, or group of individuals organizing and
pushing for the implementation of the project. Project implementor is an entity, individual,
or group of individuals establishing and operating the project. The project proponent
usually becomes the project implementor at the project implementation stage. The project
implementor is also called the project owner when referring to ownership.
The FS preparer is a qualified individual or team hired by the project proponent to
conduct the FS and prepare the FS report. The FS evaluator is a qualified individual
assigned to evaluate the FS by the funding agency or by an office having a jurisdiction on
the implementation of the project.

II. Advantages and Disadvantages of Feasibility

Advantages of Feasibility
1. It offers a means of determining whether valuable resources may be committed
in an undertaking.
2. It reduces the potential risk of failure in an undertaking.
3. It allows the identification of critical issues and critical resources in an
undertaking.
Disadvantages
1. It requires a technical knowledge.
2. It requires initial expenses.
3. It requires time and effort.
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III. Purpose of Feasibility Study

The FS shall be prepared of any or all of the following purposes;
1. To evaluate the profitability of a new business
2. To evaluate the benefits to be gained in the expansion of business
3. To evaluate the financial impact for changes in business location
4. To evaluate the benefits from new methods of production, technology, or
machinery
5. To evaluate changes in organization
6. To evaluate the benefits from business mergers or business acquisition

IV. Preparation
In as much as the feasibility study will serves as the basis for making a decision about
the viability of a given business undertaking, then the information contained in must have
the following characteristic.
a. Accuracy
b. Reliability
c. Timeliness

V. Seatwork
Answer the following questions (individual) – to be submitted today.
1. What is the importance of feasibility studies?
2. In your own understanding, explain the disadvantages of the feasibility studies.
3. Explain why a feasibility study must be accurate, reliable and timely.

Group discussion – to be submitted on or before Sunday.

Prepare three (3) business ideas that your team want to pursue. Under which, briefly
discuss the business ideas, remember that it should be (a) accurate, (b) reliable, and (c)
timely.
The format of your business idea proposal should contain the following:
1. Title Page
▪ Company’s Name (Tentative)
▪ Group members
▪ Logo is not yet required
2. Justification – it should be able to answer the ‘why’
▪ Introduction
▪ Problem Encountered in the society
▪ Solution (explain)
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3. Maximum 3 pages including the title page, should be encoded in an A4 size

bond paper

VI. References
Fonollera, Danilo ‘Danny’. Feasibility Study, Project Proposal, and Business Plan.
Western Mindanao State University.

DAO-MEMO-ORDER-No.61 Guidelines in the Preparation and Evaluation of

Feasibility Study for Agricultural and Fisheries Facilities, Agri-Fisheries
Machinery, and Equipment Service Centers, and other Agri-Fisheries
Mechanization Projects. Department of Agriculture