In terms, a feasibility study is an important study to do, especially when starting a project or business. By carrying out this feasibility study, you can assess and analyze feasibility of a business or project when executed.
Therefore, in this article, Ipadguides will discuss what is meant by a feasibility study and what aspects must be present when conducting a feasibility study. Come on, see the following explanation!
Definition of Feasibility Study
What is a feasibility study? Feasibility study is an analytical study used to measure and assess the level of feasibility of a project. This activity is carried out to find out how feasible a project plan is. Feasibility is very important for companies because it can help inform perceptions about what benefits are received from the project.
Then, the results of the feasibility study can also help companies identify and assess threats and opportunities in the surrounding environment, resource requirements, and success. Therefore, the main factors in this study process include economic, legal, technical, and scheduling considerations.
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As Ipadguides explained above, Feasibility Study is important to do to develop a project or business. Feasibility studies are also useful to avoid the potential that could hinder the operation of a project and determine how much funding is needed to run the project.
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Can determine and consider all important aspects of whether a project is feasible to run.
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The company can fully understand all parts of the project.
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Can see and find solutions to problems that exist when the project is about to run.
Types of Feasibility Study
Next, so that the results of the feasibility study can provide benefits for all project areas. There are 4 types of feasibility studies that are commonly used by companies. Each type of course has a different role, the following types of feasibility study examples include:
1. Economic Feasibility Study
The first type of feasibility study is from an economic perspective. Generally, this type of feasibility study involves an analysis of expenses and assists the company in assessing the feasibility of a project before financial capital is used.
2. Technical Feasibility Study
This type of feasibility study relies on the technical capacity of the company. Technical feasibility studies can help companies determine whether the technical capacity has met the required resources for the project and is able to turn the concept into the best working system.
The technical feasibility study also includes an evaluation of software, hardwareand other technical aspects that were announced during the project planning stage.
3. Operational Feasibility Study
Operational feasibility study is an analytical study related to the assessment that the implementation of a project can be fulfilled optimally or not. This type of feasibility study can also verify the extent to which the project plan has met the requirements, in this case it is at the analysis stage of project development.
4. Legal Feasibility Study
The last type of feasibility study is a legal feasibility study. This study is used to identify the factors in the project that contradict the legal provisions, namely the law.
Also Read: What is Market Segmentation? See Examples, Objectives and Types
Aspects of Feasibility Study
Meanwhile, regarding the implementation of the feasibility study, you also need to know what aspects must be considered when conducting a feasibility study, some aspects of the feasibility study are:
1. Operational aspects
From the operational side, the feasibility of a project can be determined from the expertise and skills of its human resources. These skills and expertise are able to provide a more specific description of the operational system that will be carried out on the project.
2. Market aspect
Then, the aspects that need to be considered in the feasibility study are market analysis. This analysis includes the analysis of the company’s products or services, supply analysis, demand analysis, marketing strategy analysis and market penetration analysis.
3. Economic aspects
The economic aspect focuses on forecasting the country’s economic conditions for the next 5 years and predicting the growth rate of the business industry from the projects being carried out.
4. Financial aspect
The financial aspect in the feasibility study includes capital, investment, and reinvestment from the flow of expenditure and cash receipts for the entire project. In addition, the application of taxes must also be considered on the project to be carried out.
5. Environmental aspects
Aspects in this feasibility study are related to the impact on the environment around the project to be carried out. This includes natural, social and cultural elements.
6. Organizational aspects
Then, the last aspect of the feasibility study is the organizational aspect. This aspect measures how many human resources are needed to be able to run a project. Prospective workers can be assessed in terms of quality and quantity.
Components in Feasibility Study
After knowing the meaning of a feasibility study and its types, the next thing you need to understand from a feasibility study is the components in it, which include:
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Executive summary
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Technology requirement details
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Market analysis
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Marketing strategy
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Human resources needed
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Project schedule
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Financial details
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Study results and recommendations
Feasibility Study Stages
In addition, you also need to know what steps must be taken to carry out feasibility studies properly and correctly, as follows:
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Data and information collection: that is to collect the required information and data completely and accurately. The data can be in the form of quantitative or qualitative data based on official and reliable sources.
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Data processing: the data that has been collected earlier is then processed in a detailed and structured manner.
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Data analysis: after the data is processed, the next step is to analyze the data to assess the feasibility parameters of a project.
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Decision making: once the project feasibility parameters have been determined, then you can make a decision on the results of the analysis of the study next.
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Providing recommendations: the last stage of the feasibility study is to provide recommendations to related parties regarding the feasibility studies that have been carried out and to collect suggestions if needed.
That was the discussion about the feasibility study that was summarized by Ipadguides. Feasibility study is the most important first step for you when you want to know the feasibility of a project or business in order to avoid the risk of loss. I hope this helps!
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