BUSINESS

FEASIBILTY
STUDY
by afeez,ALEBIOSU
What is a
FEASIBILITY
STUDY
 A business feasibility study is a
research carried out to know
whether a business will succeed or
not looking from the economical,
technical and also the managerial
point of view so as find a lasting
solution to the problems.
 MAIN AREAS TO CONSIDER IN A
FEASIBILITY STUDY
• Market environment
• Technical and operational
requirements
• Financial projections
MARKET ENVIRONMENT
 MARKET ENVIRONMENT
A business is assessed as feasible if it can
be shown that there is sufficient market
demand
Make sure you have enough customers
in your geographical location.
QUESTIONS TO ASK RELATING TO
THE MARKET
• Are you selling to individuals, households or
businesses?
• What is the population of these customers in your
target geographical location?
• How much, in an average year, do customers spend
on your product/service?
• What are total sales for the region?
• How much is currently purchased in the region?
• Is there space for the market for new players?
TECHNICAL AND OPERATIONAL
ASSESSMENT
TECHNICAL AND OPERATIONAL
ASSESSMENT
A business is considered technically and
operationally feasible if it has the necessary
expertise, infrastructure and capital to
develop, install, operate and maintain the
proposed system, and that by establishing
such a system the business will be able to
deliver goods and services at a profit.
 Factors to be considered are;
 Equipment needed
 Equipment suppliers
 Materials
 Raw materials suppliers
 Facility
 Managerial
 EQUIPMENT NEEDED
 What type of equipment and technology will
the business need to produce its
product/service.
 What costs are involved to purchase and set
up the equipment ?
 What are the costs involved in the ongoing
running of the equipment?
 EQUIPMENT SUPPLIERS
 Who are the potential suppliers of the
equipment?
 Where are they located?
 What sort of service and warranties do they
provide?
 How long will it take to acquire the equipment
and begin operations?
 MATERIALS
 How much raw materials do you need?
 What quality material do you need?
 RAW MATERIALS SUPPLIERS
 Who are the potential suppliers of the
materials?
 Where are they located?
 What sort of service and guarantees do they
provide?
 How long will it take to acquire the materials
and begin operations?
 How much credit(gbèsè) is accessible?
 FACILITY
 What are possible locations for the facility?
 What size facility is needed?
 What are the costs involved in the building?
 Do you need to build your own facility , or purchase
an existing one?
 Where will the facility be located in relation to your
customers?
 Who will be responsible for transport of goods
between the facility and the market?
 What are costs involded?
 MANAGERIAL
 What organisational structure is appropriate for the
business?
 How important are the delivery contracts and a fixed
source of supply to the succeess of the business?
 What qualifications are needed to manage operations?
 What are the key staff positions that need to be filled?
 What experience does management need to have?
 how much will it cost to find AND retain acceptable
candidates?
FINANCIAL ASSESSMENT
 A business or project may be
regarded as economically
feasible if it is able to produce
goods/services and distribute
them to the marketplace and
still return a profit to the
owners.
What are total start-up costs needed
in order to begin operations?

Cost of land, plant and equipment

Legal costs in setting up a company
structure
Accounting costs
 What are the day-to-day
operating costs involved ?
 Wages
 Rent
 Utilities
 Interest payment on debts
What is the business’s projected
income?
How will determine your pricing
arrangements?
 What are possible sources of
financing ?

Bank loans
Accounts with suppliers
Venture capital
 WHEN DOES THIS BUSINESS

BRE AKEVEN