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CHAPTER 1 - Overview of Feasibility Study Lecture

The document discusses the purpose and nature of a feasibility study. A feasibility study tests the viability of a business project in key areas to determine if it is sustainable and profitable. It also serves to evaluate the project's success, seek additional funding, and establish the expected return. A good feasibility study is comprehensive, objective, simple, and reliable. It focuses on market size, suppliers/distributors, and management abilities, while a business plan includes additional operational and financial details for a specific business.

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Carla Jean NIETO
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65 views

CHAPTER 1 - Overview of Feasibility Study Lecture

The document discusses the purpose and nature of a feasibility study. A feasibility study tests the viability of a business project in key areas to determine if it is sustainable and profitable. It also serves to evaluate the project's success, seek additional funding, and establish the expected return. A good feasibility study is comprehensive, objective, simple, and reliable. It focuses on market size, suppliers/distributors, and management abilities, while a business plan includes additional operational and financial details for a specific business.

Uploaded by

Carla Jean NIETO
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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CHAPTER 1: Overview of Feasibility Study

FEASIBILITY STUDY 5. Serve as a measuring instrument in


evaluating actual project results.
Cabrera (2000), for instance, defines a project
feasibility study as “a systematic 6. Mitigate, if not totally avoid, the
investigation which ascertains whether a expected business difficulty that may
business undertaking is viable and, if so, the be experienced during the actual
degree of its profitability.” implementation of the project.
Purpose of a Feasibility Study 7. Meet and satisfy the requirements set
by the investors of a proposed
The general purpose behind of a feasibility
business project.
study is to test the viability of a business
project in all areas. Corollary to this
underlying premise, a feasibility study is
Nature of a Feasibility Study
conducted to achieve the following:
Based on the given definition of project
1. Enhance the sustainability of a
feasibility study, the key points to remember
particular business endeavor
are as follows:
undertaken;
1. Systematic Inquiry
2. Easily facilitate the evaluation of a
2. Proposed Business Activity
project’s success in all areas covered 3. Viability in all areas
by the study; 4. Measurement of profitability level
3. Seek the infusion of additional fresh
working capital from a financial Qualities of a Good Feasibility Study
institution.
1. Comprehensive.
4. Determine the recovery period of 2. Objective.
capital investment or the expected 3. Simple.
return on investment. 4. Reliable.
Feasibility Study vs Business Plan

FEASIBILITY STUDY BUSINESS PLAN

It focus on the size of the potential market, Business plans also include operations plans,
availability and prices of suppliers and marketing strategies, location, management
distributors, and the abilities of the team and in-depth financial projections.
entrepreneur.

It usually compare several possible scenarios It describe a specific business, but include
for how a business might work. different sections depending on which parts of
the business are interesting to the audience.

A business sill probably fail if its feasibility Business plans, will go through many iterations
study is done poorly the first time. and are designed to evolve to describe an
ongoing business.

Parts of the Feasibility Study (FRAMEWORK)

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