APEKSHA RAJPUROHIT.

FEASIBILITY REPORT:
Feasibility literally means whether some idea will work or not. It knows before hand whether
there exists a sizeable market for the proposed product/service, what would be the investment
requirements and where to get the funding from, whether and wherefrom the necessary technical
know-how to convert the idea into a tangible product may be available, and so on.
Before starting a small-scale industry, it is mandatory for entrepreneurs to consult the
Director of Industries Service Institute (SISI) located in the state. The SISI guides entrepreneurs
as to the type of industry to start, where to start and how to start it. SISI suggests the lines on
which the project reports for the proposed units should be prepared for the consideration of
various financial institutions with a view to securing financial assistance. It also provides
technical guidance related to selection of raw material, type of machinery &information about
various incentives available to the small scale industries from various organizations.

In simple words the feasibility report can be defined as the preliminary study that is being
conducted to examine whether a certain project is capable of being done in a practical and useful
way or in another words in an efficient and effective way, and the outcome of this study helps in
the decision whether to proceed with the project or not. If we examine from another angle there
is another objective behind the feasibility study. What possible problems that can occur during
the project and based on this analysis some best possible alternative solutions are designed and
recommended. The best alternative solution is also formed.
Project feasibility analysis
1st step - establishment of objectives to be attained
2nd step ± in-depth study
3rd step- analysis Include market analysis, technical analysis, financial analysis & social
profitability analysis.
A feasibility study is a detailed analysis of a company and its operations that is conducted in
order to predict the results of a specific future course of action. Small business owners may find
it helpful to conduct a feasibility study whenever they anticipate making an important strategic
decision. For example, a company might perform a feasibility study to evaluate a proposed
change in location, the acquisition of another company, a purchase of major equipment or a new
computer system, the introduction of a new product or service, or the hiring of additional
employees. In such situations, a feasibility study can help a small business's managers
understand the impact of any major changes they might contemplate. "It will provide you with
objective information to evaluate existing services and strengths. You will gain an understanding
of the competition and marketplace indicators that affect your [business]. This is the best way for
you to grasp the impact of future decisions you may be considering. The feasibility study will
help you accurately anticipate what will and will not work in varied situations. You will be able
to determine what resources are essential to complete varied situations and gain an understanding
of how to draw on your strengths."

FEASIBILITY REPORT
Before starting a small-scale industry, one should consult director of industries & SISI located
in one¶s state.
SISI guides entrepreneurs as to type of industry to start, where to start & how to start it.
Help them to select various items of manufacture, various financial institutions with a view to
securing financial assistance, technical help in selection of proper raw materials& type of
machine.

SELECTION OF SITE
Nearness to source of raw materials.
Nearness to market.
Availability of land at cheap rates.
Availability of skilled labor &cost of labor in area.
Availability of transport &communication facilities.
Availability of power, water, waste disposal & other essential services Incentives &
concessions available in different states.
General business climate in the region.
Climate &environmental factors.
Availability of factory sheds in industrial estates.
Project Feasibility Analysis
‡ Project feasibility analysis includes market analysis,technical analysis, financial analysis &
social cost-benefitanalysis.
‡ Market Analysis: A market analysis is a method of screening theproject ideas as well as
means of evaluating a project¶s feasibility interms of market. The market analysis should cover
the followingareas.
1. A brief market description including market area, channels of distribution,transportation &
general trade practices.
2. An analysis of past & present demand, identification of major consumers.
3. An analysis of supply & competitive position of product , such asselling price, quality &
marketing practices of competitors

‡ The technical analysis of a project feasibility studyestablishes whether the project is

technically feasible or not. It involves following aspects.
1. Description of product & alternative manufacturing processes.
2. Determination of plant size, selection of machinery & equipments,set up time & technical
factors.
3. An identification of plant location, building & plant layout
4. A study of availability of raw materials, its cost, terms of payment,sources of supply etc.
5. An estimate of labour requirements. Skilled, semi-skilled & unskilledlabour. Supervisory
work force required.
6.Waste & waste disposal.
7. An estimate of production cost of the product.

Financial analysis of feasibility study consists of preparation of financial statements to

evaluateprofitability. Risk analysis is necessary for the investmentdecision. The financial
analysis should include:
1. Statement of total project cost, initial capital requirement, and cashflow statement in case of
new companies.
2. Supporting schedules for financial projections, collection period,inventory levels, payment
period, element of production cost, selling,administrative, & financial expenses
3. Financial analysis showing returns on investments, returns onequity, break-even volume, and
price analysis.
4. A sensitivity analysis to identify items having substantial impact onprofitability or possibly a
risk analysis.

Social cost-benefit analysis is necessary to justify aproject from the national viability point of
view.
We not only take into account direct costs & benefits but also thecost of all entities connected
with the project and the benefits which will be enjoyed by all such entities. Thisanalysis include
following aspects broadly:
1. Priorities as per national five year plan.
2. Employment capability
.3. Social acceptance
.4. Pollution & pollution control.
5. Conservation of energy.
6. Generation of foreign exchange.
7. Overall economic development.

FEASIBILITY REPORT OUTLINE::

I. Introduction
a. Purpose
b. Reasons for conducting the study

Who is it for? 
Why do they need it? 
What do they need/want?

c. Background

provide history of the situation

explain the system
present system
new proposed system
basic principles involved/ the basic theory
 d. Definition of the problem (Type I) or problems (Type II) overview of problems
e. Criteria

What basic criteria must be met for the problem to be solved?

What basic criteria must be met for the solutions to be feasible? (Cost, design considerations,
etc.)

f. Scope

list topics the study covers (What do you cover?)

list limitations of the study (What elements, factors are not considered/omitted?)
list basic assumptions
 

II. Discussion 

Type I: One problem, various solutions

 
a. Solution A

Explain solution
Evaluate/analyze 

b. Solution B

Explain solution
Evaluate/analyze

c. Solution C

Explain solution
Evaluate/analyze 

III. Type II: Various problems, various solutions for each problem 
a. Problem A

Explain problem A
Give solution(s)
Evaluate/analyze solution(s)

b. Problem B

Explain problem B
Give solution(s)
Evaluate/analyze solution(s)
 c. Problem C

Explain problem C
Give solution(s)
Evaluate/analyze solution(s)

IV. Conclusions

base on evaluations
analyze evaluations 

V.
Type I: 

Which solution is best?  

Will the solution work?
Is the solution feasible? (based on cost + other criteria) 

VI. Type II: 

Do the solutions solve all the problems?

Emphasize the solutions that work.
Will the solutions work?
Are the solutions feasible? (based on cost, other criteria)
  
 

VII. Recommendations
--base on conclusions