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Introductio N: What Is A Business Development Feasibility Study?

A business development feasibility study is used to determine if a particular business concept is viable. Only 1 or 2% of new business ideas are actually viable - that's why we are not all millionaires!

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Djamaludin Akmal Iqbal
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226 views8 pages

Introductio N: What Is A Business Development Feasibility Study?

A business development feasibility study is used to determine if a particular business concept is viable. Only 1 or 2% of new business ideas are actually viable - that's why we are not all millionaires!

Uploaded by

Djamaludin Akmal Iqbal
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as RTF, PDF, TXT or read online on Scribd
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Introductio

n
This page describes how
the different types of
feasibility study have
been and are currently
used to suit different
circumstances right
across the globe.

What is a
business
development
feasibility
study?
A business development
feasibility study is an
analytical tool that is
used to determine if a
particular business
concept is viable and is
heavily weighted
towards market research
and analysis. It must
provide clear evidence to
the stakeholders that a
concept is viable.

Only 1 or 2% of new
business ideas are
actually viable - that's
why we are not all
millionaires! So the
business development
feasibility study is a very
useful tool that must be
used to avoid the waste
of valuable resources.

If the results of the study


show that the project is
feasible then it can be
developed into a full
scale business plan.

The business
development feasibility
study would include
sections dealing with:

Introduction
Details of the product or
service
Identification of any
technical issues
The existing market and
the competition
The business structure
Marketing and sales
strategy
Operational parameters
Staffing levels
Patents, trademarks etc
Regulatory issues
Environmental issues
Risk analysis
Profit and loss and
balance sheet
forecasts
Cash flow and capital
requirements
Recommendations and
conclusions
What is the
difference
between pre-
feasibility
studies,
business
development
feasibility
studies and
project
development
feasibility
studies?
They are all similar but
because the final product
is different there is a
different emphasis on
the various elements of
each study.

For instance if a firm is


planning to establish a
new business making
shoes in one of four
countries somewhere in
Europe the pre-feasibility
study might include:

Introduction to the basic


social and business
infrastructure of
each country
The skills of the local
workforces
The availability of local
raw materials and
their cost and
quality
The capex and opex of
the manufacturing
facility
The social, political and
economic risks
The incentives available
The planning and
regulatory regime
Recommendations of the
country of choice
and terms of
reference for a
feasibility study

Or;

If an established
international shoe-maker
is planning to establish a
new business making
shoes in Italy The
business feasibility study
might include the
following elements:

Introduction
Details of the range of
shoes
The machinery to be
used
The market for the shoes
and the competition
The business structure of
the foreign entity
Marketing and sales
strategy
Operational parameters
Staffing levels
Patents, trademarks etc
Regulatory issues
Environmental issues
Risk analysis
Profit and loss and
balance sheet
forecasts
Cash flow and capital
requirements
Recommendations and
conclusions

Or;

If an established
international shoe-maker
is planning to build a
factory extension
alongside its existing
operation The project
development feasibility
study might include

Introduction
Details of the new range
of shoes
Examination of new
manufacturing
techniques and the
machinery required
How the new range will
compete in the
existing market and
the competition
The additional managers
required
Staffing levels
Planning and local issues
Risk analysis
Profit and loss and
balance sheet
forecasts
Cash flow and capital
requirements
Recommendations and
conclusions

What is the
difference
between a
feasibility
study and a
business plan?
A feasibility study is not
a business plan. The
separate roles of the
feasibility study and the
business plan are
frequently
misunderstood. The
feasibility study provides
an investigating function
that should answer the
question of “Is this a
viable business
venture?”

The business plan


provides a planning
function that outlines the
actions needed to take
the proposal from “idea”
to “reality.”

The feasibility study


outlines and analyzes
several alternatives or
methods of achieving
business success. So the
feasibility study helps to
narrow the scope of the
project to identify the
best business model. The
business plan deals with
only one alternative or
model. The feasibility
study must narrow the
scope of the project to
identify and define two
or three scenarios or
alternatives. The
consultant conducting
the feasibility study may
work with the group to
identify the “best”
alternative for their
situation. This becomes
the basis of the business
plan.

The feasibility study is


conducted before the
business plan. A
business plan is
prepared only after the
business venture has
been deemed to be
feasible. If a proposed
business venture is
considered to be
feasible, then a business
plan constructed that
provides a “roadmap” of
how the business will be
created and developed.
The business plan
provides the “blueprint”
for project
implementation. If the
venture is deemed not to
be feasible, efforts may
be made to correct its
deficiencies, other
alternatives may be
explored, or the idea is
dropped.

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