Feasibility study One way to plan the start up process and resolve many of the issues is to carry out

- or commission - a formal feasibility study. This may well be appropriate when creation of a trust depends on making a bid to one or more funders. This sheet consequently describes a 'top down' process. Each situation will be different, but here are some guidelines which should help ensure the feasibility work leads to a well structured bid. Summary The eventual feasibility of a Development Trust depends on a number of key factors which correspond to areas of good practice or competence.

A well-conceived start up process involving key interests in developing a bid to funders based on an outline business plan. Recruiting high-calibre people from public, private and voluntary sectors for the Board to develop a shared mission. They will be responsible for the governance of the Trust. Establishing sound management practices Making communications a two-way process - both presenting ideas well, and listening to others Planning for financial sustainability from the start Following sound project management practices

The Competence summary sheet, and other main competence sheets, provide more detailed checklists. Any feasibility work should, therefore, aim to answer the question: How can we create a competent Development Trust? From the above it should be clear that feasibility is more than a question of identifying project opportunities and funding sources. It also involves finding people with commitment and skills, and ways of working with existing organisations. This means that establishing whether a Trust is feasible or not is a process with a number of strands - not a snapshot technical study. The main strands are:

Understanding what funders may offer Developing and discussing a concept, or vision, of what the Trust may be like with a number of interests A local audit, or appraisal, of the problems and opportunities in an area, who is doing what, and the resources that may be available Identifying possible projects - some of which will earn income for the Trust Recruiting key interests who may sponsor, support, or play a part in the Trust Testing different packages of projects, staffing and funding which may form the basis of the bid.

The elements of the feasibility study These strands of work are set out below in more detail. They relate to the early stages described in the Start Up summary sheet.

Understanding what is on offer Funders who may be inviting a bid will brief the 'champions' who want to promote a Development Trust on what they can offer, and what is expected. These terms may well be formalised in some form of agreement. The initial concept or vision After one or more meetings with funders the initial champions will develop their first concept or vision of what a local Development Trust might be like, and discuss that informally with those who may be sponsors. A development officer should be appointed to carry through the next stages of the process. The local audit The development officer, perhaps working with a consultant, should:

Understand the boundaries of possible Development Trust activity: what may be funded, what is realistic, what performance measures are used. Identify the main problems and opportunities in the area which will establish the need for a Development Trust. Identify projects or programme areas which could meet these needs, and would be appropriate to the work programme of the Trust whether it is directly implementing or playing some other role. Review what other organisations are working in the area, and consider how the Trust could complement their activities and work in partnership with them. Identify what support may lie in the public, private or voluntary sectors in terms of funding and participation in the Trust.

People and project Some project opportunities may be obvious - and so may some supporters. However, the key to a successful Trust often lies in linking projects and people. On the one hand projects are more like to be supported if they are 'owned' by key interests. On the other hand one of the easiest ways to recruit people is to offer them a way of following their enthusiasms. The way to make the link is a three-stage process.

Networking: making informal contact with a range of interests identified in your audit, one contact often leading to another. Workshops: running informal sessions at which your contacts can brainstorm project ideas and reach a consensus on priorities Feedback: presenting the results of the workshops and any subsequent research back to participants.

It is often most productive to run separate workshops or presentations with public, private and voluntary interests to see how far their 'pictures of the future' differ or overlap, then bring those interested together at a seminar. It may be appropriate to produce some simple leaflets or newsletters during the process to keep people informed and motivated.

Preparing the bid or proposal The proposal or bid for funding should be developed as a draft business plan. See the information sheet on this in the Management section. Checklist In undertaking a feasibility assessment, consider:

whether you understand from the outset what funders offers, and what may be expected. who you should talk to informally before starting the process what skills and funds you will need for the feasibility process whether you will be able to find a development officer within your own organisation which local organisations might host workshops and presentations at what stage it will be appropriate to form a steering group how you will communicate with people during the feasibility assessment whether there are any fixed points which should influence the timetable

A feasibility study is a preliminary study undertaken before the real work of a project starts to ascertain the likelihood of the project's success. It is an analysis of possible solutions to a problem and a recommendation on the best solution to use. It involves evaluating how the solution will fit into the corporation. It, for example, can decide whether an order processing be carried out by a new system more efficiently than the previous one. A feasibility study is defined as an evaluation or analysis of the potential impact of a proposed project or program. A feasibility study is conducted to assist decision-makers in determining whether or not to implement a particular project or program. The feasibility study is based on extensive research on both the current practices and the proposed project/program and its impact on the selected organization operation. The feasibility study will contain extensive data related to financial and operational impact and will include advantages and disadvantages of both the current situation and the proposed plan. Why Prepare Feasibility Studies?

Developing any new business venture is difficult. Taking a project from the initial idea through the operational stage is a complex and time-consuming effort. Most ideas, whether from a cooperative or invest or owned business, do not develop into business operations. If these ideas make it to the operational stage, most fail within the first 6 months. Before the potential members invest in a proposed business project, they must determine if it can be economically viable and then decide if investment advantages outweigh the risks involved. Many cooperative business projects are quite expensive to conduct. The projects involve operations that differ from those of the members individual business. Often, cooperative businesses operations involve risks with which the members are unfamiliar. The study allows groups to preview potential project outcomes and to decide if they should continue. Although the costs of conducting a study may seem high, they are relatively minor when compared with the total project cost. The small initial expenditure on a feasibility study can help to protect larger capital investments later. Feasibility studies are useful and valid for many kinds of projects. Evaluations of a new business venture both from new groups and established businesses, are the most common, but not the only usage. Studies can help groups decide to expand existing services, build or remodel facilities, change methods of operation, add new products, or even merge with another business. A feasibility study assists decision makers whenever they need to consider alternative development opportunities. Feasibility studies permit planners to outline their ideas on paper before implementing them. This can reveal errors in project design before their implementation negatively affects the project. Applying the lessons gained from a feasibility study can significantly lower the project costs. The study presents the risks and returns associated with the project so the prospective members can evaluate them. There is no "magic number" or correct rate of return a project needs to obtain before a group decides to proceed. The acceptable level of return and appropriate risk rate will vary for individual members depending on their personal situation. Cooperatives serve the needs and enhance the economic returns of their members, and not outside investors, so the appropriate economic rate of return for a cooperative project may be lower than those required by projects of investor-owned firms. Potential members should evaluate the returns of a cooperative project to see how it would affect the returns of all of their business operations. The proposed project usually requires both risk capital from members and debt capital from banks and other financiers to become operational. Lenders typically require an objective evaluation of a project prior to investing. A feasibility study conducted by someone without a vested interest in the project outcome can provide this assessment. What Is a Feasibility Study? This analytical tool used during the project planning process shows how a business would operate under a set of assumptions the technology used (the facilities, equipment, production process, etc.) and the financial aspects (capital needs, volume, cost of goods, wages etc.). The study is the first time in a project development process that the pieces are assembled to see if they perform together to create a technical and economically feasible concept. The study also shows the sensitivity of the business to changes in these basic assumptions.

Feasibility studies contain standard technical and financial components, as discussed in more detail later in this report. The exact appearance of each study varies. This depends on the industry studied, the critical factors for that project, the methods chosen to conduct the study, and the budget. Emphasis can be placed on various sections of an individual feasibility study depending upon the needs of the group for whom the study was prepared. Most studies have multiple potential uses, so they must be designed to serve everyones needs. The feasibility study evaluates the projects potential for success. The perceived objectivity of the evaluation is an important factor in the credibility placed on the study by potential investors and financiers. Also, the creation of the study requires a strong background both in the financial and technical aspects of the project. For these reasons, outside consultants conduct most studies. Feasibility studies for a cooperative are similar to those for other businesses, with one exception. Cooperative members use it to be successful in enhancing their personal businesses, so a study conducted for a cooperative must address how the project will impact members as individuals in addition to how it will affect the cooperative as a whole. The feasibility study is conducted to assist the decision-makers in making the decision that will be in the best interest of the school food service operation. The extensive research, conducted in a non-biased manner, will provide data upon which to base a decision. A feasibility study could be used to test a new working system, which could be used because:

The current system may no longer suit its purpose, Technological advancement may have rendered the current system redundant, The business is expanding, allowing it to cope with extra work load, Customers are complaining about the speed and quality of work the business provides, Competitors are not winning a big enough market share due to an effective integration of a computerized system. Although few businesses would not benefit from a computerized system at all, the process of carrying out this feasibility study makes the purchaser/client think carefully about how it is going to be used. After request clarification, analyst proposes some solutions. After that for each solution it is checked whether it is practical to implement that solution. This is done through feasibility study. In this various aspects like whether it is technically or economically feasible or not. So depending upon the aspect on which feasibility is being done it can be categorized into four classes:

Technical Feasibility Economic Feasibility Operational Feasibility Legal Feasibility

The outcome of the feasibility study should be very clear. It should answer the following issues.

Is there an alternate way to do the job in a better way? What is recommended?

Technical Feasibility
In technical feasibility the following issues are taken into consideration.

Whether the required technology is available or not Whether the required resources are available -

- Manpower- programmers, testers & debuggers - Software and hardware Once the technical feasibility is established, it is important to consider the monetary factors also. Since it might happen that developing a particular system may be technically possible but it may require huge investments and benefits may be less. For evaluating this, economic feasibility of the proposed system is carried out.

Economic Feasibility
For any system if the expected benefits equal or exceed the expected costs, the system can be judged to be economically feasible. In economic feasibility, cost benefit analysis is done in which expected costs and benefits are evaluated. Economic analysis is used for evaluating the effectiveness of the proposed system. In economic feasibility, the most important is cost-benefit analysis. As the name suggests, it is an analysis of the costs to be incurred in the system and benefits derivable out of the system. Click on the link below which will get you to the page that explains what cost benefit analysis is and how you can perform a cost benefit analysis. Cost Benefit Analysis

Operational Feasibility
Operational feasibility is mainly concerned with issues like whether the system will be used if it is developed and implemented. Whether there will be resistance from users that will effect the possible application benefits? The essential questions that help in testing the operational feasibility of a system are following.

Does management support the project? Are the users not happy with current business practices? Will it reduce the time (operation) considerably? If yes, then they will welcome the change and the new system. Have the users been involved in the planning and development of the project? Early involvement reduces the probability of resistance towards the new system.

Will the proposed system really benefit the organization? Does the overall response increase? Will accessibility of information be lost? Will the system effect the customers in considerable way?

Legal Feasibility
It includes study concerning contracts, liability, violations, and legal other traps frequently unknown to the technical staff.