When starting a business, one of the most important steps is to conduct a feasibility study.

It is a
detailed examination of whether or not a proposed business venture is likely to be successful. Several
factors need to be considered when conducting a feasibility study, including the marketability of your
product or service, the competition, the financial stability of your company, and more. A feasibility
study aims to provide information that will help business owners make informed decisions about
their new venture.

The importance of a feasibility study is based on organizational desire to “get it right” before
committing resources, time, or budget. A feasibility study might uncover new ideas that could
completely change a project’s scope. It’s best to make these determinations in advance, rather than to
jump in and to learn that the project won’t work. Conducting a feasibility study is always beneficial
to the project as it gives you and other stakeholders a clear picture of the proposed project. 

According to Rodney, O (2007), alluded that a business feasibility study can be defined as a
controlled process for identifying problems and opportunities, determining objectives, describing
situations, defining successful outcomes and assessing the range of costs and benefits associated with
several alternatives for solving a problem. The business feasibility study is used to help the decision-
making process based on a cost-benefit analysis of the real business or project viability. Prior to
beginning the formal business plan phase of the business development cycle, a feasibility study is
carried out. It is an analytical tool with constraints and recommendations that is used to help
decision-makers decide whether a company idea is viable.

Kreigsmann, B (1979), stated that the word "feasible" refers to something that is possible, probable,
or likely to occur. A feasibility study is the culmination of all the steps you take and inquiries you
make in order to assess the viability of an idea, concept, or plan. An effective study can help you
decide whether to develop your idea further, leave it as is, or throw it out completely and start over.

The profitability of a business initiative can be ascertained with the use of a feasibility study before
investing. Entrepreneurs and investors must evaluate the viability of a company initiative before
launching or growing it. Analysis of the business's viability and the likelihood of successful business
results is aided by feasibility studies. Business managers utilize feasibility studies to assess the
advantages and disadvantages of a new venture. This is done to determine whether or not their time
and money are worth investing.

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Preparing a project's feasibility study is an important step that may assist project managers in making
informed decisions about whether or not to spend time and money on the endeavor. Feasibility
studies may also help a company's management avoid taking on a tricky business endeavor by
providing them with critical information (Mcnaram, J 2012).

An additional advantage of doing a feasibility study is that it aids in the creation of new ventures by
providing information on factors such as how a company will work, what difficulties it could face,
who its competitors are, and how much and where it will get its funding from. These marketing
methods are the goal of feasibility studies, which try to persuade financiers and banks whether
putting money into a certain company venture makes sense.

Furthermore, Gumpert, D (1994), stated that Feasibility study is important to ensure the prospective
customers interest with the proposed project. Some investors may think that their ideas are more than
wonderful, but this is not the measure. Instead of the main determining factor is considered the
intended audience for this idea. How will they persuade with that idea? Will the intended audience
accept to buy this product if the idea is implemented? So the most important purpose of the
feasibility study is to measure the interest of your targeted audience in the product or service you
intend to offer before you start and invest in times, efforts and funds and then you discover that the
market in the field of the industry is already saturated and then you will have to withdraw or make
more efforts and money to continue

By calculating the opportunity cost, a business feasibility study can assist in selecting the optimal
solution. Investigating possibilities might disclose opportunities that were previously unknown while
the reasons for rejecting a certain option can expose business shortcomings. From this, a business can
determine what causes specific elements to hurt them and identify solutions. When these procedures
are carried out and the required remedial actions are made, its performance is evaluated. Profits can
then be generated simply, luring investors. The results of this research may be used to obtain
financing from financial institutions (Clark, I (2001).

The fact that a feasibility study provides detailed information about what a project needs in order to
be sustainable is arguably its biggest advantage. You'll get a sense for the sources of funding,
partners, and business model required to accomplish success by comprehending development
expenses, the competitive landscape, where potential customers will come from, and revenue
possibilities. The feasibility study's elements will act as a road map, outlining the ideal course for
developing a new complex.

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Feasibility studies will give you an identity. When planning a new sports, recreation, or
entertainment facility, you’ll have a general idea of who you are targeting. However, to attract this
valued audience, you must understand their needs as well as the competitive landscape. A feasibility
study will help you understand what they have to offer (Kreigsmann, B 1979).

The economic benefits to be reaped by the business are ascertained by a feasibility study. It helps
provide the degree to which the economic advantages of the idea are greater than the economic costs.
An accurate analysis of the comparison of the all the costs to be incurred and the benefits to be
received is conducted. This not only determines the viability of the project, but also directs the
business towards saving itself from an inadequate allocation of resources. The credibility of the idea
is assessed, and the management achieves a distinct breakdown of all the various costs it will have to
incur from the initiation to the execution of the entire project. These costs, when weighed against the
benefits that may be generated, result into the overall economic feasibility of the project (Daner, N
2002).

Feasibility study helps in terms of financial study. Financial planning is very important to handle the
different operations of the organization within the budget limits. In financial research, the researchers
cover the assessment of total capital requirements, sales and prices, break even outputs, amount of
sales required to attain profit in the business. It helps entrepreneurs to get an idea about how much
money is required for handling a business project successfully.

Because a feasibility study examines the current market and investigates the projected expansion of
your chosen business area, you can gain information of trends. A feasibility study can assist a
company and a project manager in determining if a business initiative will be lucrative. It should be
emphasized that ambiguity may reduce a feasibility study's effectiveness. Projected expenses and
revenues are entirely based on future estimates (Gumpert, D 1994).

In summary, a feasibility study's primary goal is to identify major issues that could arise during the
course of company and explore options for removing them in order to proceed with the enterprise.
When deciding whether to move forward with a project, a feasibility study is a crucial tool. You may
make wiser decisions about whether to proceed with a project by knowing its viability. Lots of
information required for the business strategy is provided by a thorough feasibility investigation.
This suggests that you have the opportunity to get it right before investing time by doing a feasibility
study.

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 REFERENCES

Clark, I (2001). The Financial Dimensions of Charting Strategic Business Direction‖. Journal of
International Business Management 14(5).

Daner, N (2002). Theories on Economic Feasibility for Systems. Journal of the American planning
Association. 20(2).

Gumpert, D (1994). How to really create a successful Business plan. Boston Inc. magazine
publishing.

Hofstrand, D et al (2009). Feasibility and Business Plan. agdm@aslate.edu. Assessed 20 July,

2016.

Kreigsmann, B (1979). The Feasibility study in a tools for venture analysis. Business. Journal of
Small Business Management 17(1).

Maraka,G (2011). Developing Business/TT Solutions, in Management Information Systems.

New York Magraw- Hill.

Mcnaram, J (2012). Measuring Organizational Performance. Www.cipd.co.uk. Assessed on 21

July 2016.

Rodney, O (2007). Feasibility studies made simple. Martin play limited publishers

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