difference between market research and initial feasibility study

Market Research and Feasibility Studies

Are you ready to turn your project or business idea into a concrete reality but unsure about its feasibility? Whether you're a seasoned entrepreneur or a first-time project manager, understanding the intricate process of conducting a feasibility study is vital for making informed decisions and maximizing your chances of success.

This guide will equip you with the knowledge and tools to navigate the complexities of market, technical, financial, and operational feasibility studies. By the end, you'll have a clear roadmap to confidently assess, plan, and execute your project.

What is a Feasibility Study?

A feasibility study is a systematic and comprehensive analysis of a proposed project or business idea to assess its viability and potential for success. It involves evaluating various aspects such as market demand, technical feasibility, financial viability, and operational capabilities. The primary goal of a feasibility study is to provide you with valuable insights and data to make informed decisions about whether to proceed with the project.

Why is a Feasibility Study Important?

Conducting a feasibility study is a critical step in the planning process for any project or business. It helps you:

• Minimize Risks: By identifying potential challenges and obstacles early on, you can develop strategies to mitigate risks.
• Optimize Resource Allocation: A feasibility study helps you allocate your resources more efficiently, including time and money.
• Enhance Decision-Making: Armed with data and insights, you can make well-informed decisions about pursuing the project or exploring alternative options.
• Attract Stakeholders: Potential investors, lenders, and partners often require a feasibility study to assess the project's credibility and potential return on investment.

Now that you understand the importance of feasibility studies, let's explore the various types and dive deeper into each aspect.

Types of Feasibility Studies

Feasibility studies come in various forms, each designed to assess different aspects of a project's viability. Let's delve into the four primary types of feasibility studies in more detail:

1. Market Feasibility Study

Market feasibility studies are conducted to determine whether there is a demand for a product or service in a specific market or industry. This type of study focuses on understanding customer needs, market trends, and the competitive landscape. Here are the key elements of a market feasibility study:

• Market Research and Analysis: Comprehensive research is conducted to gather market size, growth potential , and customer behavior data. This includes both primary research (surveys, interviews) and secondary research (existing reports, data).
• Target Audience Identification: Identifying the ideal customer base by segmenting the market based on demographics, psychographics, and behavior. Understanding your target audience is crucial for tailoring your product or service.
• Competitive Analysis : Assessing the competition within the market, including identifying direct and indirect competitors, their strengths, weaknesses, and market share.
• Demand and Supply Assessment: Analyzing the balance between the demand for the product or service and its supply. This helps determine whether there is room for a new entrant in the market.

2. Technical Feasibility Study

Technical feasibility studies evaluate whether the project can be developed and implemented from a technical standpoint. This assessment focuses on the project's design, technical requirements, and resource availability. Here's what it entails:

• Project Design and Technical Requirements: Defining the technical specifications of the project, including hardware, software, and any specialized equipment. This phase outlines the technical aspects required for project execution.
• Technology Assessment: Evaluating the chosen technology's suitability for the project and assessing its scalability and compatibility with existing systems.
• Resource Evaluation: Assessing the availability of essential resources such as personnel, materials, and suppliers to ensure the project's technical requirements can be met.
• Risk Analysis: Identifying potential technical risks, challenges, and obstacles that may arise during project development. Developing risk mitigation strategies is a critical part of technical feasibility.

3. Financial Feasibility Study

Financial feasibility studies aim to determine whether the project is financially viable and sustainable in the long run. This type of study involves estimating costs, projecting revenue, and conducting financial analyses. Key components include:

• Cost Estimation: Calculating both initial and ongoing costs associated with the project, including capital expenditures, operational expenses, and contingency funds.
• Revenue Projections: Forecasting the income the project is expected to generate, considering sales, pricing strategies, market demand, and potential revenue streams.
• Investment Analysis: Evaluating the return on investment (ROI), payback period, and potential risks associated with financing the project.
• Financial Viability Assessment: Analyzing the project's profitability, cash flow, and financial stability to ensure it can meet its financial obligations and sustain operations.

4. Operational Feasibility Study

Operational feasibility studies assess whether the project can be effectively implemented within the organization's existing operational framework. This study considers processes, resource planning, scalability, and operational risks. Key elements include:

• Process and Workflow Assessment: Analyzing how the project integrates with current processes and workflows, identifying potential bottlenecks, and optimizing operations.
• Resource Planning: Determining the human, physical, and technological resources required for successful project execution and identifying resource gaps.
• Scalability Evaluation: Assessing the project's ability to adapt and expand to meet changing demands and growth opportunities, including capacity planning and growth strategies.
• Operational Risks Analysis: Identifying potential operational challenges and developing strategies to mitigate them, ensuring smooth project implementation.

Each type of feasibility study serves a specific purpose in evaluating different facets of your project, collectively providing a comprehensive assessment of its viability and potential for success.

How to Prepare for a Feasibility Study?

Before you dive into the nitty-gritty details of conducting a feasibility study, it's essential to prepare thoroughly. Proper preparation will set the stage for a successful and insightful study. In this section, we'll explore the main steps involved in preparing for a feasibility study.

1. Identify the Project or Idea

Identifying and defining your project or business idea is the foundational step in the feasibility study process. This initial phase is critical because it helps you clarify your objectives and set the direction for the study.

• Problem Identification: Start by pinpointing the problem or need your project addresses. What pain point does it solve for your target audience?
• Project Definition: Clearly define your project or business idea. What are its core components, features, or offerings?
• Goals and Objectives: Establish specific goals and objectives for your project. What do you aim to achieve in the short and long term?
• Alignment with Vision: Ensure your project aligns with your overall vision and mission. How does it fit into your larger strategic plan?

Remember, the more precisely you can articulate your project or idea at this stage, the easier it will be to conduct a focused and effective feasibility study.

2. Assemble a Feasibility Study Team

Once you've defined your project, the next step is to assemble a competent and diverse feasibility study team. Your team's expertise will play a crucial role in conducting a thorough assessment of your project's viability.

• Identify Key Roles: Determine the essential roles required for your feasibility study. These typically include experts in areas such as market research, finance, technology, and operations.
• Select Team Members: Choose team members with the relevant skills and experience to fulfill these roles effectively. Look for individuals who have successfully conducted feasibility studies in the past.
• Collaboration and Communication: Foster a collaborative environment within your team. Effective communication is essential to ensure everyone is aligned on objectives and timelines.
• Project Manager: Designate a project manager responsible for coordinating the study, tracking progress, and meeting deadlines.
• External Consultants: In some cases, you may need to engage external consultants or specialists with niche expertise to provide valuable insights.

Having the right people on your team will help you collect accurate data, analyze findings comprehensively, and make well-informed decisions based on the study's outcomes.

3. Set Clear Objectives and Scope

Before you begin the feasibility study, it's crucial to establish clear and well-defined objectives. These objectives will guide your research and analysis efforts throughout the study.

Steps to Set Clear Objectives and Scope:

• Objective Clarity: Define the specific goals you aim to achieve through the feasibility study. What questions do you want to answer, and what decisions will the study inform?
• Scope Definition: Determine the boundaries of your study. What aspects of the project will be included, and what will be excluded? Clarify any limitations.
• Resource Allocation: Assess the resources needed for the study, including time, budget, and personnel. Ensure that you allocate resources appropriately based on the scope and objectives.
• Timeline: Establish a realistic timeline for the feasibility study. Identify key milestones and deadlines for completing different phases of the study.

Clear objectives and a well-defined scope will help you stay focused and avoid scope creep during the study. They also provide a basis for measuring the study's success against its intended outcomes.

4. Gather Initial Information

Before you delve into extensive research and data collection, start by gathering any existing information and documents related to your project or industry. This initial step will help you understand the current landscape and identify gaps in your knowledge.

• Document Review: Review any existing project documentation, market research reports, business plans, or relevant industry studies.
• Competitor Analysis: Gather information about your competitors, including their products, pricing, market share, and strategies.
• Regulatory and Compliance Documents: If applicable, collect information on industry regulations, permits, licenses, and compliance requirements.
• Market Trends: Stay informed about current market trends, consumer preferences, and emerging technologies that may impact your project.
• Stakeholder Interviews: Consider conducting initial interviews with key stakeholders, including potential customers, suppliers, and industry experts, to gather insights and feedback.

By starting with a strong foundation of existing knowledge, you'll be better prepared to identify gaps that require further investigation during the feasibility study. This proactive approach ensures that your study is comprehensive and well-informed from the outset.

How to Conduct a Market Feasibility Study?

The market feasibility study is a crucial component of your overall feasibility analysis. It focuses on assessing the potential demand for your product or service, understanding your target audience, analyzing your competition, and evaluating supply and demand dynamics within your chosen market.

Market Research and Analysis

Market research is the foundation of your market feasibility study. It involves gathering and analyzing data to gain insights into market trends, customer preferences, and the overall business landscape.

• Data Collection: Utilize various methods such as surveys, interviews, questionnaires, and secondary research to collect data about the market. This data may include market size, growth rates, and historical trends.
• Market Segmentation: Divide the market into segments based on factors such as demographics, psychographics , geography, and behavior. This segmentation helps you identify specific target markets .
• Customer Needs Analysis: Understand the needs, preferences, and pain points of potential customers . Determine how your product or service can address these needs effectively.
• Market Trends: Stay updated on current market trends, emerging technologies, and industry innovations that could impact your project.
• SWOT Analysis: Conduct a SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis to identify internal and external factors that may affect your market entry strategy.

In today's dynamic market landscape, gathering precise data for your market feasibility study is paramount. Appinio offers a versatile platform that enables you to swiftly collect valuable market insights from a diverse audience.

With Appinio, you can employ surveys, questionnaires, and in-depth analyses to refine your understanding of market trends, customer preferences, and competition.

Enhance your market research and gain a competitive edge by booking a demo with us today!

Book a Demo

Target Audience Identification

Knowing your target audience is essential for tailoring your product or service to meet their specific needs and preferences.

• Demographic Analysis: Define the age, gender, income level, education, and other demographic characteristics of your ideal customers.
• Psychographic Profiling: Understand the psychographics of your target audience, including their lifestyle, values, interests, and buying behavior.
• Market Segmentation: Refine your target audience by segmenting it further based on shared characteristics and behaviors.
• Needs and Pain Points: Identify your target audience's unique needs, challenges, and pain points that your product or service can address.
• Competitor's Customers: Analyze the customer base of your competitors to identify potential opportunities for capturing market share.

Competitive Analysis

Competitive analysis helps you understand the strengths and weaknesses of your competitors, positioning your project strategically within the market.

• Competitor Identification: Identify direct and indirect competitors within your industry or market niche.
• Competitive Advantage: Determine the unique selling points (USPs) that set your project apart from competitors. What value can you offer that others cannot?
• SWOT Analysis for Competitors: Conduct a SWOT analysis for each competitor to assess their strengths, weaknesses, opportunities, and threats.
• Market Share Assessment: Analyze each competitor's market share and market penetration strategies.
• Pricing Strategies: Investigate the pricing strategies employed by competitors and consider how your pricing strategy will compare.

Leveraging the power of data collection and analysis is essential in gaining a competitive edge. With Appinio , you can efficiently gather critical insights about your competitors, their strengths, and weaknesses. Seamlessly integrate these findings into your market feasibility study, empowering your project with a strategic advantage.

Demand and Supply Assessment

Understanding supply and demand dynamics is crucial for gauging market sustainability and potential challenges.

• Market Demand Analysis: Estimate the current and future demand for your product or service. Consider factors like seasonality and trends.
• Supply Evaluation: Assess the availability of resources, suppliers, and distribution channels required to meet the expected demand.
• Market Saturation: Determine whether the market is saturated with similar offerings and how this might affect your project.
• Demand Forecasting: Use historical data and market trends to make informed projections about future demand.
• Scalability: Consider the scalability of your project to meet increased demand or potential fluctuations.

A comprehensive market feasibility study will give you valuable insights into your potential customer base, market dynamics, and competitive landscape. This information will be pivotal in shaping your project's direction and strategy.

How to Conduct a Technical Feasibility Study?

The technical feasibility study assesses the practicality of implementing your project from a technical standpoint. It involves evaluating the project's design, technical requirements, technological feasibility, resource availability, and risk analysis. Let's delve into each aspect in more detail.

1. Project Design and Technical Requirements

The project design and technical requirements are the foundation of your technical feasibility study. This phase involves defining the technical specifications and infrastructure needed to execute your project successfully.

• Technical Specifications: Clearly define the technical specifications of your project, including hardware, software, and any specialized equipment.
• Infrastructure Planning: Determine the physical infrastructure requirements, such as facilities, utilities, and transportation logistics.
• Development Workflow: Outline the workflow and processes required to design, develop, and implement the project.
• Prototyping: Consider creating prototypes or proof-of-concept models to test and validate the technical aspects of your project.

2. Technology Assessment

A critical aspect of the technical feasibility study is assessing the technology required for your project and ensuring it aligns with your goals.

• Technology Suitability: Evaluate the suitability of the chosen technology for your project. Is it the right fit, or are there better alternatives?
• Scalability and Compatibility: Assess whether the chosen technology can scale as your project grows and whether it is compatible with existing systems or software.
• Security Measures: Consider cybersecurity and data protection measures to safeguard sensitive information.
• Technical Expertise: Ensure your team or external partners possess the technical expertise to implement and maintain the technology.

3. Resource Evaluation

Resource evaluation involves assessing the availability of the essential resources required to execute your project successfully. These resources include personnel, materials, and suppliers.

• Human Resources: Evaluate whether you have access to skilled personnel or if additional hiring or training is necessary.
• Material Resources: Identify the materials and supplies needed for your project and assess their availability and costs.
• Supplier Relationships: Establish relationships with reliable suppliers and consistently assess their ability to meet your resource requirements.

4. Risk Analysis

Risk analysis is a critical component of the technical feasibility study, as it helps you anticipate and mitigate potential technical challenges and setbacks.

• Identify Risks: Identify potential technical risks, such as hardware or software failures, technical skill gaps, or unforeseen technical obstacles.
• Risk Mitigation Strategies: Develop strategies to mitigate identified risks, including contingency plans and resource allocation for risk management.
• Cost Estimation for Risk Mitigation: Assess the potential costs associated with managing technical risks and incorporate them into your project budget.

By conducting a thorough technical feasibility study, you can ensure that your project is technically viable and well-prepared to overcome technical challenges. This assessment will also guide decision-making regarding technology choices, resource allocation, and risk management strategies.

How to Conduct a Financial Feasibility Study?

The financial feasibility study is a critical aspect of your overall feasibility analysis. It focuses on assessing the financial viability of your project by estimating costs, projecting revenue, conducting investment analysis, and evaluating the overall financial health of your project. Let's delve into each aspect in more detail.

1. Cost Estimation

Cost estimation is the process of calculating the expenses associated with planning, developing, and implementing your project. This involves identifying both initial and ongoing costs.

• Initial Costs: Calculate the upfront expenses required to initiate the project, including capital expenditures, equipment purchases, and any development costs.
• Operational Costs: Estimate the ongoing operating expenses, such as salaries, utilities, rent, marketing, and maintenance.
• Contingency Funds: Allocate funds for unexpected expenses or contingencies to account for unforeseen challenges.
• Depreciation: Consider the depreciation of assets over time, as it impacts your financial statements.

2. Revenue Projections

Revenue projections involve forecasting the income your project is expected to generate over a specific period. Accurate revenue projections are crucial for assessing the project's financial viability.

• Sales Forecasts: Estimate your product or service sales based on market demand, pricing strategies, and potential growth.
• Pricing Strategy: Determine your pricing strategy, considering factors like competition, market conditions, and customer willingness to pay.
• Market Penetration: Analyze how quickly you can capture market share and increase sales over time.
• Seasonal Variations: Account for any seasonal fluctuations in revenue that may impact your cash flow.

3. Investment Analysis

Investment analysis involves evaluating the potential return on investment (ROI) and assessing the attractiveness of your project to potential investors or stakeholders.

• Return on Investment (ROI): Calculate the expected ROI by comparing the project's net gains against the initial investment.
• Payback Period: Determine how long it will take for the project to generate sufficient revenue to cover its initial costs.
• Risk Assessment: Consider the level of risk associated with the project and whether it aligns with investors' risk tolerance.
• Sensitivity Analysis: Perform sensitivity analysis to understand how changes in key variables, such as sales or costs, affect the investment's profitability.

4. Financial Viability Assessment

A financial viability assessment evaluates the project's ability to sustain itself financially in the long term. It considers factors such as profitability, cash flow, and financial stability.

• Profitability Analysis: Assess whether the project is expected to generate profits over its lifespan.
• Cash Flow Management: Analyze the project's cash flow to ensure it can cover operating expenses, debt payments, and other financial obligations.
• Break-Even Analysis: Determine the point at which the project's revenue covers all costs, resulting in neither profit nor loss.
• Financial Ratios: Calculate key financial ratios, such as debt-to-equity ratio and return on equity, to evaluate the project's financial health.

By conducting a comprehensive financial feasibility study, you can gain a clear understanding of the project's financial prospects and make informed decisions regarding its viability and potential for success.

How to Conduct an Operational Feasibility Study?

The operational feasibility study assesses whether your project can be implemented effectively within your organization's operational framework. It involves evaluating processes, resource planning, scalability, and analyzing potential operational risks.

1. Process and Workflow Assessment

The process and workflow assessment examines how the project integrates with existing processes and workflows within your organization.

• Process Mapping: Map out current processes and workflows to identify areas of integration and potential bottlenecks.
• Workflow Efficiency: Assess the efficiency and effectiveness of existing workflows and identify opportunities for improvement.
• Change Management: Consider the project's impact on employees and plan for change management strategies to ensure a smooth transition.

2. Resource Planning

Resource planning involves determining the human, physical, and technological resources needed to execute the project successfully.

• Human Resources: Assess the availability of skilled personnel and consider whether additional hiring or training is necessary.
• Physical Resources: Identify the physical infrastructure, equipment, and materials required for the project.
• Technology and Tools: Ensure that the necessary technology and tools are available and up to date to support project implementation.

3. Scalability Evaluation

Scalability evaluation assesses whether the project can adapt and expand to meet changing demands and growth opportunities.

• Scalability Factors: Identify factors impacting scalability, such as market growth, customer demand, and technological advancements.
• Capacity Planning: Plan for the scalability of resources, including personnel, infrastructure, and technology.
• Growth Strategies: Develop strategies for scaling the project, such as geographic expansion, product diversification, or increasing production capacity.

4. Operational Risk Analysis

Operational risk analysis involves identifying potential operational challenges and developing mitigation strategies.

• Risk Identification: Identify operational risks that could disrupt project implementation or ongoing operations.
• Risk Mitigation: Develop risk mitigation plans and contingency strategies to address potential challenges.
• Testing and Simulation: Consider conducting simulations or testing to evaluate how the project performs under various operational scenarios.
• Monitoring and Adaptation: Implement monitoring and feedback mechanisms to detect and address operational issues as they arise.

Conducting a thorough operational feasibility study ensures that your project aligns with your organization's capabilities, processes, and resources. This assessment will help you plan for a successful implementation and minimize operational disruptions.

How to Write a Feasibility Study?

The feasibility study report is the culmination of your feasibility analysis. It provides a structured and comprehensive document outlining your study's findings, conclusions, and recommendations. Let's explore the key components of the feasibility study report.

1. Structure and Components

The structure of your feasibility study report should be well-organized and easy to navigate. It typically includes the following components:

• Executive Summary: A concise summary of the study's key findings, conclusions, and recommendations.
• Introduction: An overview of the project, the objectives of the study, and a brief outline of what the report covers.
• Methodology: A description of the research methods , data sources, and analytical techniques used in the study.
• Market Feasibility Study: Detailed information on market research, target audience, competitive analysis, and demand-supply assessment.
• Technical Feasibility Study: Insights into project design, technical requirements, technology assessment, resource evaluation, and risk analysis.
• Financial Feasibility Study: Comprehensive information on cost estimation, revenue projections, investment analysis, and financial viability assessment.
• Operational Feasibility Study: Details on process and workflow assessment, resource planning, scalability evaluation, and operational risks analysis.
• Conclusion: A summary of key findings and conclusions drawn from the study.

Recommendations: Clear and actionable recommendations based on the study's findings.

2. Write the Feasibility Study Report

When writing the feasibility study report, it's essential to maintain clarity, conciseness, and objectivity. Use clear language and provide sufficient detail to support your conclusions and recommendations.

• Be Objective: Present findings and conclusions impartially, based on data and analysis.
• Use Visuals: Incorporate charts, graphs, and tables to illustrate key points and make the report more accessible.
• Cite Sources: Properly cite all data sources and references used in the study.
• Include Appendices: Attach any supplementary information, data, or documents in appendices for reference.

3. Present Findings and Recommendations

When presenting your findings and recommendations, consider your target audience. Tailor your presentation to the needs and interests of stakeholders, whether they are investors, executives, or decision-makers.

• Highlight Key Takeaways: Summarize the most critical findings and recommendations upfront.
• Use Visual Aids: Create a visually engaging presentation with slides, charts, and infographics.
• Address Questions: Be prepared to answer questions and provide additional context during the presentation.
• Provide Supporting Data: Back up your findings and recommendations with data from the feasibility study.

4. Review and Validation

Before finalizing the feasibility study report, conducting a thorough review and validation process is crucial. This ensures the accuracy and credibility of the report.

• Peer Review: Have colleagues or subject matter experts review the report for accuracy and completeness.
• Data Validation: Double-check data sources and calculations to ensure they are accurate.
• Cross-Functional Review: Involve team members from different disciplines to provide diverse perspectives.
• Stakeholder Input: Seek input from key stakeholders to validate findings and recommendations.

By following a structured approach to creating your feasibility study report, you can effectively communicate the results of your analysis, support informed decision-making, and increase the likelihood of project success.

Feasibility Study Examples

Let's dive into some real-world examples to truly grasp the concept and application of feasibility studies. These examples will illustrate how various types of projects and businesses undergo the feasibility assessment process to ensure their viability and success.

Example 1: Local Restaurant

Imagine you're passionate about opening a new restaurant in a bustling urban area. Before investing significant capital, you'd want to conduct a thorough feasibility study. Here's how it might unfold:

• Market Feasibility: You research the local dining scene, identify target demographics, and assess the demand for your cuisine. Market surveys reveal potential competitors, dining preferences, and pricing expectations.
• Technical Feasibility: You design the restaurant layout, plan the kitchen setup, and assess the technical requirements for equipment and facilities. You consider factors like kitchen efficiency, safety regulations, and adherence to health codes.
• Financial Feasibility: You estimate the initial costs for leasing or purchasing a space, kitchen equipment, staff hiring, and marketing. Revenue projections are based on expected foot traffic, menu pricing, and seasonal variations.
• Operational Feasibility: You create kitchen and service operations workflow diagrams, considering staff roles and responsibilities. Resource planning includes hiring chefs, waitstaff, and kitchen personnel. Scalability is evaluated for potential expansion or franchising.
• Risk Analysis: Potential operational risks are identified, such as food safety concerns, labor shortages, or location-specific challenges. Risk mitigation strategies involve staff training, quality control measures, and contingency plans for unexpected events.

Example 2: Software Development Project

Now, let's explore the feasibility study process for a software development project, such as building a mobile app:

• Market Feasibility: You analyze the mobile app market, identify your target audience, and assess the demand for a solution in a specific niche. You gather user feedback and conduct competitor analysis to understand the competitive landscape.
• Technical Feasibility: You define the technical requirements for the app, considering platforms (iOS, Android), development tools, and potential integrations with third-party services. You evaluate the feasibility of implementing specific features.
• Financial Feasibility: You estimate the development costs, including hiring developers, designers, and ongoing maintenance expenses. Revenue projections are based on app pricing, potential in-app purchases, and advertising revenue.
• Operational Feasibility: You map out the development workflow, detailing the phases from concept to deployment. Resource planning includes hiring developers with the necessary skills, setting up development environments, and establishing a testing framework.
• Risk Analysis: Potential risks like scope creep, technical challenges, or market saturation are assessed. Mitigation strategies involve setting clear project milestones, conducting thorough testing, and having contingency plans for technical glitches.

These examples demonstrate the versatility of feasibility studies across diverse projects. Whatever type of venture or endeavor you want to embark on, a well-structured feasibility study guides you toward informed decisions and increased project success.

In conclusion, conducting a feasibility study is a crucial step in your project's journey. It helps you assess the viability and potential risks, providing a solid foundation for informed decision-making. Remember, a well-executed feasibility study not only enables you to identify challenges but also uncovers opportunities that can lead to your project's success.

By thoroughly examining market trends, technical requirements, financial aspects, and operational considerations, you are better prepared to embark on your project confidently. With this guide, you've gained the knowledge and tools needed to navigate the intricate terrain of feasibility studies.

How to Conduct a Feasibility Study in Minutes?

Speed and precision are paramount for feasibility studies, and Appinio delivers just that. As a real-time market research platform, Appinio empowers you to seamlessly conduct your market research in a matter of minutes, putting actionable insights at your fingertips.

Here's why Appinio stands out as the go-to tool for feasibility studies:

• Rapid Insights: Appinio's intuitive platform ensures that anyone, regardless of their research background, can effortlessly navigate and conduct research, saving valuable time and resources.
• Lightning-Fast Responses: With an average field time of under 23 minutes for 1,000 respondents, Appinio ensures that you get the answers you need when you need them, making it ideal for time-sensitive feasibility studies.
• Global Reach: Appinio's extensive reach spans over 90 countries, allowing you to define the perfect target group from a pool of 1,200+ characteristics and gather insights from diverse markets.

Get free access to the platform!

Join the loop 💌

Be the first to hear about new updates, product news, and data insights. We'll send it all straight to your inbox.

Get the latest market research news straight to your inbox! 💌

Wait, there's more

09.04.2024 | 29min read

What is a Confidence Interval and How to Calculate It?

05.04.2024 | 27min read

What is Field Research? Definition, Types, Methods, Examples

03.04.2024 | 29min read

What is Cluster Sampling? Definition, Methods, Examples

• Designing & Implementation of Loyalty & Rewards program
• News & Report
• Case Studies

Image credit: Unsplash

A market research feasibility study is a critical step in making informed business decisions. It’s a comprehensive analysis that provides invaluable insights into the potential success of a business endeavor.

A detailed market feasibility study in marketing offers a solid foundation for understanding the potential success of a new venture. The venture might be a product, service, or expansion.

This blog post explores the 4 key elements that comprise a market research feasibility study. It will equip you with the tools to navigate these critical decisions.

Definition of a Market Research Feasibility Study

A market research feasibility study is an integral part of a feasibility study akin to a blueprint for success. It’s a step-by-step evaluation of the potential of a new business venture.

The importance of a market feasibility study isn’t a mere formality but an essential step towards avoiding risks and maximizing success in the long term.

Imagine you’re considering opening a new restaurant. Market research would look into the proposed project’s location, target market, competition, and financial projections. This ensures you’re not just opening a restaurant but one poised for success.

The 4 key elements that comprise a market research analysis are similar to those seen in other types of feasibility studies. It includes market analysis, technical analysis, financial analysis, and risk analysis. Each element works in hand with others to provide a sustainable business adventure.

Let us take a broader overview of each element:

Key Element 1: Market Analysis

Understanding the market is similar to understanding the battlefield before entering a war. Market analysis is an important component of market research. It involves a careful examination of various aspects of your feasibility study marketing strategy. Then, it provides you with a clear sales projection , crucial to the success of your business idea.

Market Size

This entails determining the total addressable market, i.e., the total demand for your product or service. For example, you have to look for customers in the fitness market if you want to launch a new type of fitness tracker.

Demography means studying your target customer’s info like age, where they live, and how much they earn. It’s super important when starting a new business. For example, if you’re opening a trendy skate shop, knowing if many young skaters are in the area helps you plan right. It’s like having a secret weapon for your business!

Market Trends

Markets are dynamic, and trends can make or break a business. For example, suppose you’re considering a foray into the electric vehicle industry. In that case, understanding the current shift toward sustainable transportation is crucial.

Competition Analysis

Knowing your competitors is like understanding the strategies of opposing forces. It’s about identifying who you’re up against, their strengths and weaknesses. Let’s say you’re planning a new e-commerce platform; competitive assessment of giants like Amazon and eBay is essential.

Key Element 2: Technical Analysis

Technical analysis is the engine under the hood of your venture. It’s about ensuring you have the necessary resources, capabilities, and technology to make your business concept a reality.

Production Capacity

Production capacity involves assessing how much you can produce or deliver. For instance, understanding your brewing capacity per batch is vital if you’re planning to start a craft brewery.

Resource Assessment

Do you have access to the required materials, labor, and equipment? This step ensures that you’re not just ideating but capable of executing. In the case of a software startup, having a skilled development team and necessary software licenses are crucial resources.

Technology Evaluation

Depending on your industry, technology can be a game-changer. Consider a scenario where you’re venturing into the field of renewable energy. Assessing the latest solar panel technology and its efficiency would be a key aspect of the technical analysis.

Key Element 3: Financial Analysis

This is where dreams meet numbers. Financial analysis is the bedrock of any feasibility study.

Cost Assessment

Cost assessment is about understanding what it takes to start the venture. This includes initial investments, operation costs, and more. If you’re planning a boutique hotel, this would involve expenses like construction, interior design, and staff recruitment.

Revenue Projections

How do you plan to make money? Revenue projections involve estimating income streams. If you’re developing a software-as-a-service (SaaS) product, you’d project subscription-based revenue.

Profit Index Analysis

Profit index analysis is the heart of financial analysis. Are you going to make a profit, and if so, when? For instance, considering a food delivery service, you’d factor in expenses like food sourcing, logistics, and marketing costs against potential earnings.

Essential Element 4: Risk Analysis

In business, as in life, risks are inevitable. Identifying and mitigating risk is a critical aspect of any market research study.

Risk Identification

This involves identifying potential obstacles, challenges, or uncertainties that could hinder the success of your venture. For example, a risk might include charging infrastructure if you plan to launch a new line of electric cars.

Risk Assessment

Once identified, risk assessment on the potential impact and likelihood of occurrence should follow. In our electric car example, the effect of limited charging infrastructure on sales and market penetration would be a critical assessment.

Risk Mitigation Strategies

What are you going to do about these risks? This step involves developing plans and strategies to minimize the impact of identified threats in your product lines. This might include partnerships with charging infrastructure providers or innovative solutions like swappable batteries.

Differences Between Marketing Feasibility Study, Marketing Plan, and Business Plan

Marketing feasibility, marketing plan, and business plan have several similarities. However, there are clear differences between these business strategies.

Marketing Feasibility

Market Feasibility is like doing your homework before starting a business. It’s all about finding out if there’s a real need for what you want to offer.

The component of a marketing feasibility study includes feasibility study market analysis, customer demographics, competition assessment, and financial projections.

For instance, if you’re into starting a tutoring service, you’d want to know if enough students seek help in your area.

Marketing Plan

Marketing Plan is your game plan for promoting your business. It’s like making a strategy for how you’ll let people know about your awesome products or services.

The component of your marketing plan includes market analysis, target audience identification, competitive analysis, marketing tactics, budget allocation, and performance metrics.

Let’s say you’re launching a cool app; your marketing plan might involve social media ads. You can also use influencers and maybe even some fun launch events.

Business Plan

Business Plan is like the master plan for your whole business. It’s like a roadmap that covers everything about your business. It covers details from what you’re selling to how you’ll make money and even how you’ll grow in the future.

The components of a business plan include an executive summary , target market, and operation structure. Other notable elements are marketing strategies, financial projections, and the long-term goals of your business.

If you’re considering starting a small bakery, your business plan would have information about your menu and location. Other information will include budget and how you’ll stand out from other bakeries.

However, these plans work together to ensure your business idea is strong and ready to shine.

Reasons to Hire a Research Firm for Your Market Research Feasibility Study

Market research feasibility is the most critical type of Feasibility Analysis . This is because it directly impacts the success of any business venture.

As a startup entrepreneur, having a perfect result might step beyond due to associated market experience and technology requirements. Expert market research firms remove these worries and allow you to focus on other aspects of the business.

One standout market research firm you can hire in the UAE and Dubai markets is Researchers. Hiring firms like Researchers offers you the following:

Access to Advanced Tools

Research firms have cutting-edge technology and computation tools. These technical resources may not be readily available in-house, leading to more refined and accurate results.

Industry Knowledge

Specialized research firms often have deep industry expertise. This experience enables them to understand market terms and trends that may not be apparent to a generalist.

Privacy and Security

Professional research firms prioritize privacy and have robust data security measures to safeguard sensitive information.

Benchmarking and Comparison

Research firms can provide benchmarking against industry standards and competitors, giving you a clearer understanding of your position in the market.

Global Reach

If your market extends beyond borders, research firms with international capabilities can offer insights into global markets. This insight can help you make strategic decisions with a great ROI on your time and money.

In business ventures, knowledge truly is power. A marketing feasibility study equips you with the insights needed to navigate the complexities of a new endeavor. Let’s recap why each component is crucial:

• Market Analysis: It’s about understanding your battlefield. Knowing your demography, market size, trends, and competition provides a solid foundation for your venture.
• Technical Analysis: This ensures you have the capabilities and resources to turn your concept into reality. It’s the engine that drives your business forward.
• Financial Analysis: Dreams meet reality here. It’s where you assess the costs and project revenues and determine if your venture will be financially viable.
• Risk Analysis: Business is not without its risks. Identifying, assessing, and mitigating these risks sets successful ventures apart from the rest.

So, take this knowledge and implement it in your own ventures. A well-conducted market research can determine between a venture that dips and one that soars.

As you embark on your business journey, remember that a well-informed choice today can lead to a thriving venture tomorrow. Hire expert research firms like Researchers for an optimal result.

• Azhar Siddique
• No Comments

Share Post -

Contact us today

Let us assist you in making the best decision and handling the work. Your company deserves the best. We make your vision a reality!

TECHNOLOGIES

● strategy & consultation, ● business consultation & implementaion, ● on chain ecosystem consulting, ● blockchain infra consulting, ● asset tokenization, ● defi consultation, ● web 3.0 strategy & consultation, ● tokenzation, ● market making, ● feasibility studies, ● data story telling, ● mystery shopping, ● customers experience & happiness, ● employee satisfaction & engagement, ● qualitative & quantitative surveys, ● brand postioning & benchmarking, ● competitior analysis, ● marketing consulting, ● dashboard & reporting, ● data analytics, ● master data management, ● data quality, ● data integration, ● ibm cognos analytics, ● microsoft power bi, ● qlikview / qliksense, ● product analysis, ● process analysis, ● designing and implementing of loyalty & rewards program.

• +971 56 574 7998
• [email protected]
• 20th Floor, Regal Tower, Business Bay, Dubai, United Arab Emirates

⛊ Privacy Policy

© researchers 2024. all rights reserved..

• Search Search Please fill out this field.

What Is a Feasibility Study?

Understanding a feasibility study, how to conduct a feasibility study.

• Feasibility Study FAQs

The Bottom Line

• Business Essentials

Feasibility Study

Yarilet Perez is an experienced multimedia journalist and fact-checker with a Master of Science in Journalism. She has worked in multiple cities covering breaking news, politics, education, and more. Her expertise is in personal finance and investing, and real estate.

A feasibility study is a detailed analysis that considers all of the critical aspects of a proposed project in order to determine the likelihood of it succeeding.

Success in business may be defined primarily by return on investment , meaning that the project will generate enough profit to justify the investment. However, many other important factors may be identified on the plus or minus side, such as community reaction and environmental impact.

Although feasibility studies can help project managers determine the risk and return of pursuing a plan of action, several steps should be considered before moving forward.

Key Takeaways

• A company may conduct a feasibility study when it's considering launching a new business, adding a new product line, or acquiring a rival.
• A feasibility study assesses the potential for success of the proposed plan or project by defining its expected costs and projected benefits in detail.
• It's a good idea to have a contingency plan on hand in case the original project is found to be infeasible.

Investopedia / Lara Antal

A feasibility study is an assessment of the practicality of a proposed plan or project. A feasibility study analyzes the viability of a project to determine whether the project or venture is likely to succeed. The study is also designed to identify potential issues and problems that could arise while pursuing the project.

As part of the feasibility study, project managers must determine whether they have enough of the right people, financial resources, and technology. The study must also determine the return on investment, whether this is measured as a financial gain or a benefit to society, as in the case of a nonprofit project.

The feasibility study might include a cash flow analysis, measuring the level of cash generated from revenue versus the project's operating costs . A risk assessment must also be completed to determine whether the return is enough to offset the risk of undergoing the venture.

When doing a feasibility study, it’s always good to have a contingency plan that is ready to test as a viable alternative if the first plan fails.

Benefits of a Feasibility Study

There are several benefits to feasibility studies, including helping project managers discern the pros and cons of undertaking a project before investing a significant amount of time and capital into it.

Feasibility studies can also provide a company's management team with crucial information that could prevent them from entering into a risky business venture.

Such studies help companies determine how they will grow. They will know more about how they will operate, what the potential obstacles are, who the competition is, and what the market is.

Feasibility studies also help convince investors and bankers that investing in a particular project or business is a wise choice.

The exact format of a feasibility study will depend on the type of organization that requires it. However, the same factors will be involved even if their weighting varies.

Preliminary Analysis

Although each project can have unique goals and needs, there are some best practices for conducting any feasibility study:

• Conduct a preliminary analysis, which involves getting feedback about the new concept from the appropriate stakeholders
• Analyze and ask questions about the data obtained in the early phase of the study to make sure that it's solid
• Conduct a market survey or market research to identify the market demand and opportunity for pursuing the project or business
• Write an organizational, operational, or business plan, including identifying the amount of labor needed, at what cost, and for how long
• Prepare a projected income statement, which includes revenue, operating costs, and profit
• Prepare an opening day balance sheet
• Identify obstacles and any potential vulnerabilities, as well as how to deal with them
• Make an initial "go" or "no-go" decision about moving ahead with the plan

Suggested Components

Once the initial due diligence has been completed, the real work begins. Components that are typically found in a feasibility study include the following:

• Executive summary : Formulate a narrative describing details of the project, product, service, plan, or business.
• Technological considerations : Ask what will it take. Do you have it? If not, can you get it? What will it cost?
• Existing marketplace : Examine the local and broader markets for the product, service, plan, or business.
• Marketing strategy : Describe it in detail.
• Required staffing : What are the human capital needs for this project? Draw up an organizational chart.
• Schedule and timeline : Include significant interim markers for the project's completion date.
• Project financials .
• Findings and recommendations : Break down into subsets of technology, marketing, organization, and financials.

Examples of a Feasibility Study

Below are two examples of a feasibility study. The first involves expansion plans for a university. The second is a real-world example conducted by the Washington State Department of Transportation with private contributions from Microsoft Inc.

A University Science Building

Officials at a university were concerned that the science building—built in the 1970s—was outdated. Considering the technological and scientific advances of the last 20 years, they wanted to explore the cost and benefits of upgrading and expanding the building. A feasibility study was conducted.

In the preliminary analysis, school officials explored several options, weighing the benefits and costs of expanding and updating the science building. Some school officials had concerns about the project, including the cost and possible community opposition. The new science building would be much larger, and the community board had earlier rejected similar proposals. The feasibility study would need to address these concerns and any potential legal or zoning issues.

The feasibility study also explored the technological needs of the new science facility, the benefits to the students, and the long-term viability of the college. A modernized science facility would expand the school's scientific research capabilities, improve its curriculum, and attract new students.

Financial projections showed the cost and scope of the project and how the school planned to raise the needed funds, which included issuing a bond to investors and tapping into the school's endowment . The projections also showed how the expanded facility would allow more students to be enrolled in the science programs, increasing revenue from tuition and fees.

The feasibility study demonstrated that the project was viable, paving the way to enacting the modernization and expansion plans of the science building.

Without conducting a feasibility study, the school administrators would never have known whether its expansion plans were viable.

A High-Speed Rail Project

The Washington State Department of Transportation decided to conduct a feasibility study on a proposal to construct a high-speed rail that would connect Vancouver, British Columbia, Seattle, Washington, and Portland, Oregon. The goal was to create an environmentally responsible transportation system to enhance the competitiveness and future prosperity of the Pacific Northwest.

The preliminary analysis outlined a governance framework for future decision-making. The study involved researching the most effective governance framework by interviewing experts and stakeholders, reviewing governance structures, and learning from existing high-speed rail projects in North America. As a result, governing and coordinating entities were developed to oversee and follow the project if it was approved by the state legislature.

A strategic engagement plan involved an equitable approach with the public, elected officials, federal agencies, business leaders, advocacy groups, and indigenous communities. The engagement plan was designed to be flexible, considering the size and scope of the project and how many cities and towns would be involved. A team of the executive committee members was formed and met to discuss strategies, lessons learned from previous projects and met with experts to create an outreach framework.

The financial component of the feasibility study outlined the strategy for securing the project's funding, which explored obtaining funds from federal, state, and private investments. The project's cost was estimated to be between $24 billion to $42 billion. The revenue generated from the high-speed rail system was estimated to be between $160 million and $250 million.

The report bifurcated the money sources between funding and financing. Funding referred to grants, appropriations from the local or state government, and revenue. Financing referred to bonds issued by the government, loans from financial institutions, and equity investments, which are essentially loans against future revenue that needs to be paid back with interest.

The sources for the capital needed were to vary as the project moved forward. In the early stages, most of the funding would come from the government, and as the project developed, funding would come from private contributions and financing measures. Private contributors included Microsoft Inc., which donated more than $570,000 to the project.

The benefits outlined in the feasibility report show that the region would experience enhanced interconnectivity, allowing for better management of the population and increasing regional economic growth by $355 billion. The new transportation system would provide people with access to better jobs and more affordable housing. The high-speed rail system would also relieve congested areas from automobile traffic.

The timeline for the study began in 2016 when an agreement was reached with British Columbia to work together on a new technology corridor that included high-speed rail transportation. The feasibility report was submitted to the Washington State land Legislature in December 2020.

What Is the Main Objective of a Feasibility Study?

A feasibility study is designed to help decision-makers determine whether or not a proposed project or investment is likely to be successful. It identifies both the known costs and the expected benefits.

In business, "successful" means that the financial return exceeds the cost. In a nonprofit, success may be measured in other ways. A project's benefit to the community it serves may be worth the cost.

What Are the Steps in a Feasibility Study?

A feasibility study starts with a preliminary analysis. Stakeholders are interviewed, market research is conducted, and a business plan is prepared. All of this information is analyzed to make an initial "go" or "no-go" decision.

If it's a go, the real study can begin. This includes listing the technological considerations, studying the marketplace, describing the marketing strategy, and outlining the necessary human capital, project schedule, and financing requirements.

Who Conducts a Feasibility Study?

A feasibility study may be conducted by a team of the organization's senior managers. If they lack the expertise or time to do the work internally it may be outsourced to a consultant.

What Are the 4 Types of Feasibility?

The study considers the feasibility of four aspects of a project:

Technical: A list of the hardware and software needed, and the skilled labor required to make them work.

Financial: An estimate of the cost of the overall project and its expected return.

Market: An analysis of the market for the product or service, the industry, competition, consumer demand, sales forecasts, and growth projections

Organizational: An outline of the business structure and the management team that will be needed.

Feasibility studies help project managers determine the viability of a project or business venture by identifying the factors that can lead to its success. The study also shows the potential return on investment and any risks to the success of the venture.

A feasibility study contains a detailed analysis of what's needed to complete the proposed project. The report may include a description of the new product or venture, a market analysis, the technology and labor needed, as well as the sources of financing and capital. The report will also include financial projections, the likelihood of success, and ultimately, a go-or-no-go decision.

Washington State Department of Transportation. " Ultra-High-Speed Rail Study ."

Washington State Department of Transportation. " Cascadia Ultra High Speed Ground Transportation Framework for the Future ."

Washington State Department of Transportation. " Ultra-High-Speed Rail Study: Outcomes ."

Washington State Department of Transportation. " Ultra-High-Speed Ground Transportation Business Case Analysis ." Page ii.

• Terms of Service
• Editorial Policy
• Privacy Policy
• Your Privacy Choices

• Search Search Please fill out this field.
• Building Your Business
• Operations & Success

What Is a Marketing Feasibility Study?

How to write a market feasibility study, how to identify potential customers, clients, and contract sources, how a market feasibility study differs from a marketing plan, frequently asked questions (faqs).

Hero Images / Getty Images

Market feasibility studies are documents that help businesses assess their likelihood of success. These studies include an analysis of the industry, competitors, and more.

Key Takeaways

• A market feasibility study helps businesses set expectations and plans.
• A good market feasibility study assesses the market environment while also identifying potential customers and other sources of revenue.
• Unlike marketing plans, which aim to make your business look as good as possible, market feasibility studies should be an objective assessment.

Market feasibility studies should include a description of the industry, current market analysis, competition, anticipated future market potential, potential sources of revenue, and sales projections.

Industry Description

Give a brief description (one or two paragraphs) of the industry your business is in, according to the U.S. Department of Labor. Determining your industry is essential for receiving government contracts,  attracting investors , and for receiving grants if you form a nonprofit.

For example, Fictitious Business Example (FBE) is being established to produce and provide quality industrial first aid kits to the U.S. Government and both private and public companies to improve worker safety on the job. FBE's services are classified under the U.S. Department of Labor Standard Industrial Classification (SIC) as SIC Code 5047 and classified as being in the "Medical, Dental, and Hospital Equipment and Supplies" industry. Your company's SIC can be found on OSHA's SIC search tool .

Current Market Analysis

This section of a market feasibility study describes the current market for your product or service. If you are offering something so unique that there are few market statistics, you can either use related industry information or conduct your own independent study. Several ways to conduct your research for new ideas include polling internet forums, sending out questionnaires addressed to targeted consumer groups or the general population, and even customer surveys.

Any solid evidence you have that there is a demand (or market) for your product or services will help you sell your idea. It is particularly important if you are marketing something unique or within a small, specialized market.

You need to show that your ideas are novel because you have found a niche and not because there is no existing market for the idea.

A good source for finding out what is selling (and what is not) is the Department of Labor. Industries showing employee growth is often a good indicator of an industry's overall stability, and massive layoffs indicate fewer business opportunities. Where there is a demand for something, there should be correlating employment growth, the number of new companies being formed, or in the industry's overall combined revenue.

Competition

If you are planning only to serve a local market, start by identifying every competitor within a 50-mile radius. List each competitor by location and distance from you, as well as their distances from each other. You should closely examine all competing businesses that are within 15 miles of your location. Consider their locations, business hours, and how long they have been in business. These things can help you determine how hard it will be to establish a similar business in the same geographic area.

You should also make a note of any similar businesses in your area that have recently gone out of business. There may be a reason such as poor location, high taxes, operating restrictions, or not enough demand for the product or service in that area to sustain a business. Researching local competitor information can tell you two things: what works now and what has not worked for other businesses.

If you are planning to sell your products or services on a larger scale through franchise development or internet sales, you need to look beyond the local competition. To find smaller competition, use a search engine to find businesses by keywords related to your industry. The return will show you companies selling similar products that are ranking high in search engine results and possibly getting more business.

Visit their websites to see what they are selling and what they are not selling.

If you are not sure what keywords relate to your industry, use free, online keyword search tools to help you know what most people are searching for in your related field.

Anticipated Future Market Potential

This section should include a narrative description, as well as attached spreadsheets, graphs, or tables showing trends, statistics, or projections. There are no surefire ways to tell if an industry will have measurable growth in the future, but you can make logical and reasonable predictions based on trends, past growth, and the current markets.

It is critical in this section that your projections are fact-based as much as possible. Every business takes risks; the key is to minimize those risks by carefully studying already successful companies. Rather than targeting the entire industry, try to isolate similar businesses and study what they are doing, how they are doing it, and their financial track record.

Potential Sources of Revenue

You can obtain a lot of information by visiting company websites and looking over product lines. Look for discontinued products or services and high-priced items. Somewhere in between these two things are probably the most stable long-term items. Discontinued means consumers no longer demand the product, while high-priced items may indicate a fad.

Since big companies spend big bucks on market research, take advantage of their money spent and public information. For example, if you are trying to crack the pet market, look at PetSmart and Petco. Examine the new product lines or services they are offering; chances are good that they spent millions researching industry trends to develop new product ideas.

Look for press releases about businesses in your industry. Press releases are an advertisement, but they also often tell why a company is branching out, closing a division, or changing its product line. They have already done the research for you, so do not hesitate to take clues from other businesses.

Sales Projections

Sales projections can be a challenge for any new business owner because there is little or no track record to support how fast you will grow or what products or services will sell best. Sales projections should factor in how much time and money will be invested in the business and the markets you will be targeting.

For example, if you get your product in the door at Walmart or Target, your sales are more likely to grow faster than if you sell your product in local mom-and-pop stores.

That's why it is important that you write a market feasibility study first. Your market study will help you decide where to sell your product or services and what products and services are most likely to generate the most revenue. 

If you have an internet-based business, you should estimate the total traffic (number of visitors) to your website each month, project anticipated site traffic volume over time, use traffic projections to estimate the average number of sales per every 10,000 visits to your site, and calculate the average amount of each sale.

The more traffic you can drive to your site, the more opportunities you have for making a sale—and it helps to have good search engine optimization (SEO) skills. This is important for all internet businesses because, as your site becomes more popular, you can project an increase in sales. A good rule of thumb is to summarize sales projections in the content but attach a spreadsheet showing actual numbers based on sales projections.

This component of your small business market feasibility study should be descriptive. Your potential customers, clients, and contract sources should include a list of current customers, clients, and contracts, as well as possible new or renewed contracts. Make a note of any sales lead that may generate new customers or clients, a list of government contracting agencies—with a brief description of what type of contracts they solicit and how they pertain to your industry—and a list of market types you currently target or intend to target, such as senior citizens, working mothers, organizations, specialty retailers, etc.

Depending on the nature of your business, it may not be possible to associate specific amounts of revenue with a particular market, but you can at least try to estimate the percentage of total revenue expected from each source. For example, if you plan to sell products to five specialty stores, list each store you plan to sell to, and total overall revenue for the specialty stores, rather than an amount for each individual store.

Feasibility studies are done on ideas, campaigns, products, processes, and entire businesses, and they look at how things work, if they will work, and if there are potential problems. Feasibility studies are assessment tools, not just reports to try and sell your business to investors. They should consider both the pros and cons and analyze a variety of potential business scenarios.

A marketing plan maps out specific ideas, strategies, and campaigns based on feasibility study investigations, and is intended to be implemented. Think of market feasibility studies as a logistical study, and a marketing plan as a specific, planned course of action to take.

What is the importance of the market feasibility study?

Market feasibility studies give you a more realistic sense of whether or not your business can survive. Marketing efforts, pitch decks, and similar documents will always highlight your company's best potential. A market feasibility study helps you gauge your probability of success after reviewing all of the issues and competitors.

What are the main parts of a market feasibility study?

The main parts of a market feasibility study are the executive summary , the description of the product or service, the technology considerations, the product or service marketplace, the identification of a specific market, the marketing strategy, the organization structure, the schedule, and the final projections.

Bureau of Labor Statistics. " Industries at a Glance ."

Department of Labor. " Description for 5047: Medical, Dental, and Hospital Equipment and Supplies ."

Department of Labor. " Standard Industrial Classification (SIC) Manual ."

Bureau of Labor Statistics. " Employment Projections ."

Google. " Search Engine Optimization (SEO) Starter Guide ."

Iowa State University. " What Is a Feasibility Study? "

• Software Categories

Get results fast. Talk to an expert now.

855-718-1369

What is a feasibility study: step-by-step guide.

Key takeaways

• A feasibility study is an essential analytical tool that evaluates the viability of a proposed project on multiple fronts, such as financials, technical requirements, and market demand.
• Conducted during the project initiation phase, this type of study serves as an early checkpoint to identify potential roadblocks and assess risks.
• Feasibility studies act as the first line of defense against project failure, saving time, money, and resources.

In this article...

What is a feasibility study?

A feasibility study is an analytical tool used to evaluate the practicality of a proposed project or business idea. It assesses various factors such as financial viability, technical requirements, legal constraints, and market demand. The study aims to answer the question “Are the goals of this project realistically attainable?” by examining data, studies, and other relevant information.

A feasibility study is a crucial step to take before diving into any project and is generally performed during the project initiation phase of project management . It helps identify potential roadblocks, assess risks, and estimate resource allocation; skipping this step can lead to project failure, wasted resources, and financial losses.

Feasibility studies represent one of the many intricacies of project planning . Understanding the other requirements of this crucial step can give you a well-rounded view of how to set your project up for success.

Steps to conduct a feasibility study

Successfully executing a project hinges on thorough planning and risk assessment. Following this step-by-step guide for conducting a feasibility study will help you meticulously evaluate the viability of your project from the outset.

Step 1: Conduct preliminary analysis

This is where you take a good, hard look at your project to determine whether it’s worth pursuing. At this stage, you should also decide if a more detailed feasibility study is necessary.

A few key criteria usually come into play during this initial assessment. First, consider a general sense of the market demand for your project, the resources you have at your disposal, and some ballpark figures for initial costs. If it’s difficult to get clear estimates, it may be worthwhile to invest additional time and resources in a more comprehensive feasibility study. If no significant roadblocks pop up in this preliminary analysis, then you have the green light to proceed.

Some project management software includes useful features that can help you efficiently collect and organize all this data. These features can be very helpful in decision-making, especially when you’re looking at multiple variables.

Step 2: Create a projected income statement

This vital component of the feasibility study involves forecasting the income, expenses, and profitability associated with the proposed project. The projected income statement is akin to peering into a financial crystal ball to see how the numbers might align.

There are several approaches you can take to assess a project’s financial impact. Historical data and industry benchmarks, for example, can serve as reliable guides. These projections are important for assessing financial feasibility and making informed decisions.

The significance of these forecasts cannot be overstated — they help stakeholders understand the project’s potential ROI and ultimately make the go/no-go decision for the project.

Step 3: Survey the market

The market survey stage involves rolling up your sleeves to gather valuable data and insights about your target market(s) and audience(s). Think of it as your project’s reconnaissance mission: You’re scouting the terrain to understand what you’re getting into.

To start, you’ll want to learn your customers’ preferences to see if your project will fulfill a need or solve a problem they currently face. For example, a software company’s research might reveal customer demand for a new feature that aligns with the project’s goals.

Also consider if your project is timely and whether it will make a significant impact now or in the near future, depending on emerging market trends. It may be useful to conduct competitor research as well; knowing what and who you’re up against can help stakeholders decide whether you should move forward with the project and, if so, how you will approach it.

Surveys and interviews are ideal for firsthand quantitative and qualitative data. However, don’t underestimate the power of existing market reports. This preexisting data can offer a broad market landscape view, helping you make data-driven decisions. You can also leverage other research and data collection methods, such as focus groups and publicly available databases like Statista and the U.S. Census Bureau .

Step 4: Review and analyze the data

With all of the necessary information in hand, use tools like a SWOT analysis to evaluate the project’s strengths, weaknesses, opportunities, and threats. A risk assessment is another go-to method that can help you identify potential pitfalls that could derail your project.

At this point in the feasibility study, weigh key metrics and indicators like projected ROI, milestone dates, market penetration rates, and possible vulnerabilities. These gauges, when reviewed in tandem, paint a broader picture of your project’s viability and value.

Step 5: Determine the next steps

Use your research-backed analysis to decide whether the project you’ve proposed is the best way to address the problems it intends to address. If the metrics are favorable and the risks are manageable, you should feel confident advancing to the planning phase. Too many red flags, however, may mean you need to go back to the drawing board.

Here’s a little tech tip to make this decision easier: Many project management software dashboards can compile your key metrics and findings neatly in one visual package. It’s like having a project feasibility snapshot right at your fingertips, which makes it much easier for stakeholders to understand important data and make informed decisions.

Types of feasibility studies

There are different types of feasibility studies that each focus on a unique aspect of projects and project planning . By understanding the nuances of each, you’ll become better equipped to make well-informed decisions, mitigate risks, and ultimately steer your project toward success.

Technical feasibility

Technical feasibility digs into the nuts and bolts of the project. You’re looking at what kind of technology you’ll need, whether it’s available, and if it can be integrated into your current systems. It’s like checking if you have all the ingredients you need before cooking a specific recipe.

Economic feasibility

This study is all about the money — how much the project will cost and what kinds of economic or profitability benefits it will bring forth. With an economic feasibility study, you’re most often doing a cost-benefit analysis to see if the financials add up in your favor. It’s like weighing the pros and cons but in dollar signs. 

Legal feasibility

This is your legal checkpoint. You’re looking at any laws or regulations that might create risks or restrict your project. This feasibility study could also involve checking compliance with industry-specific or regional regulations.

Operational feasibility

An operational feasibility study will help you see how the project fits into your current operations and operational goals and resources. After completing this type of study, you should know if your project will require new workflows and if your team can handle project tasks alongside their current workloads.

This study also evaluates whether the organization has the expertise to accomplish all project goals.

Scheduling feasibility

This feasibility study is all about time. You’re considering how long the project will take and whether you can afford any delays. Gantt charts , a feature commonly found in project management software, can be convenient in this type of study.

These visual timelines allow you to map out the entire project schedule, set milestones, and identify potential bottlenecks. You can also easily see if your project’s timeline is realistic or if you need to make adjustments to avoid delays.

Feasibility study examples

Feasibility studies add value to the project lifecycle across diverse industries. With each of these examples, the feasibility study is a critical preliminary step to identify potential roadblocks and assess the likelihood of project success.

Construction

A construction project feasibility study might focus on land evaluation, zoning laws, and material costs to determine if a new housing development is viable. In this example, the study helps avoid legal snags and ensure profitable land use.

A healthcare feasibility study may assess the demand for a new medical facility in a specific location by looking at factors like local population health statistics and existing healthcare infrastructure. This type of research helps determine whether a new facility would serve the community appropriately and utilize resources effectively.

Information technology

An IT feasibility study might analyze the technical requirements, cost, and market demand for a new software application to understand whether the development effort would offer a reasonable return on investment. This information helps project teams avoid sinking time and money into software that no one wants or needs.

Free feasibility study template

Download our feasibility study template for free:

Why are feasibility studies crucial in project management?

In project management, feasibility studies help you gauge whether your project is a go or a no-go, saving you time, money, and a lot of headaches in the long run. But it’s not just about giving your project a thumbs-up or down.

Feasibility studies are also invaluable for decision-making and risk assessment. They provide the data and insights you need to make informed choices. Whether it’s deciding on the project scope, budget, or timeline, these studies offer a comprehensive view of what you’re up against.

Plus, feasibility studies help you identify potential roadblocks and risks, allowing you to prepare effective contingency plans. Operating with a feasibility study as your project’s foundation is like giving your team both a roadmap and a weather forecast to help you better navigate your project journey.

About the author

Looking for software? Try our Project Management Product Selection Tool

Get FREE Expert Advice

How should our experts reach you?

Learn everything you need to know about What Is a Feasibility Study: Step-by-Step Guide. Our experts will reach out to you shortly.

By clicking the button above, I confirm that I have read and agree to the Terms of Use and Privacy Policy.

404 Not found

• 1-800-609-6480

• Your Audience
• Your Industry
• Customer Stories
• Case Studies
• Alchemer Survey
• Alchemer Survey is the industry leader in flexibility, ease of use, and fastest implementation. Learn More
• Alchemer Workflow
• Alchemer Workflow is the fastest, easiest, and most effective way to close the loop with customers. Learn More
• Alchemer Digital
• Alchemer Digital drives omni-channel customer engagement across Mobile and Web digital properties. Learn More
• Additional Products
• Alchemer Mobile
• Alchemer Web
• Email and SMS Distribution
• Integrations
• Panel Services
• Website Intercept
• Onboarding Services
• Business Labs
• Basic Training
• Alchemer University
• Our full-service team will help you find the audience you need. Learn More
• Professional Services
• Specialists will custom-fit Alchemer Survey and Workflow to your business. Learn More
• Mobile Executive Reports
• Get help gaining insights into mobile customer feedback tailored to your requirements. Learn More
• Self-Service Survey Pricing
• News & Press
• Help Center
• Mobile Developer Guides
• Resource Library
• Close the Loop
• Security & Privacy

What is a Feasibility Study, and How Can Surveys Help?

• Share this post:

What is a Feasibility Study?

Feasibility studies are designed to answer a very simple question: Is this idea feasible?

While simple on the surface, finding an answer to that question often involves considerable investigative energy into many different areas.

From existing competitors to financial options to technical and production considerations, there are dozens of factors affecting the feasibility of any new venture.

In this guide we’ll explore the appropriate times to run a feasibility study, what your final report on your findings should include, who’s best suited to run a this analysis, and how surveys can help you answer some of the most pressing feasibility questions.

The Right Time to Conduct a Feasibility Study

Regardless of your confidence in your new product or your brilliant idea, it’s always a good idea to investigate its real world feasibility before you invest too much time or money.

All new businesses should conduct a feasibility study before starting production and/or going to market, and most established companies conduct them in advance of new product launches.

These types of reports can also offer the hard data necessary to make hard decisions about the future direction of a company or product. If you have internal disagreement about the next steps for your marketing, development, or expansion, a feasibility study can settle it with unbiased information.

Ready to Factor in Feasibility?

When You Don’t Need a Feasibility Study

In order to save money and time, and often to simply go to market faster, entrepreneurs may choose to forego running a feasibility study. This can pay off with being the first into an emerging market, or it can backfire if a new company encounters unexpected obstacles.

Some common reasons that you might want to bypass this type of exploration:

• Founders or entrepreneurs know the new venture is feasible based on their own experience or on a similar business model that is currently successful.
• You’re still confident in the results from your most recent study and don’t think there have been enough changes to warrant a new one.
• The costs in both money and time prohibit completing a full feasibility analysis.

Key Components of a Feasibility Study

A feasibility study can cover a wide variety of topics that might have an impact on your new venture, but most fall into one or more of these categories.

Do you have proprietary technology on which your launch depends? Might new technology emerge that would affect your product?

Consider existing and future economic conditions that might impact your market’s ability or willingness to purchase your product or service, along with any sources of initial cash flow.

This is where to investigate existing patents, copyrights, or other restrictions that might affect your idea.

Do you need a store front? Employees? Letterhead? Make note of the costs of all your operating costs.

If you need to release your product at a particular time of year, or before an event, make sure to take these restrictions into account.

Marketability

Marketability is an extremely broad category that could include:

• Competitors
• Level of demand
• Unoccupied niches
• Target markets, including specific demographics and purchasing habits
• Physical vs. online marketing

How to Get Data Resulting from a Feasibility Study

By far the quickest way to get going is to hire a consultant to run the study from start to finish and report on their findings. While tempting, this option is probably out of the question for all but the best-funded startups.

You’ll also need to include the costs of the feasibility report itself in your economic factors, and doing so might push businesses that were just barely profitable in their early stages into the red.

On the other hand, if you barrel forward without data you risk losing initial capital investments. Many investors will also refuse to entertain your proposals without this type of information, so it may be a non-negotiable expense.

The good news is that with secondary market research data widely available and lots of handy survey templates like this one out there, you can do a lot of the leg work yourself and reduce the overhead while still getting great feasibility data.

Using Surveys in a Feasibility Study to Understand Your Marketability

You need to reach out to your target market to learn as much as possible about the people who you hope are going to be paying for your product or service, and surveys are by far the best way to do this.

Running a survey of your potential customers might even reveal dissatisfaction with particular products or features that you could exploit, changing your feasibility prospects from questionable to positive.

Sample Format for a Feasibility Study Report

Once you have your data, you need to collect it into an easy-to-ready, digestible document that clearly demonstrates how your idea will some day rule the world (or is at least initially doable).

Feasibility study reports should include at least these sections, though you may need to add additional details to cover your particular niche or idea:

Executive Summary

The high level points and overview of the data you’ll be exploring later. Cover all the most important details, because lots of readers won’t get beyond this part.

Defining Your Idea

Here’s where you go into detail about your product, service, company, app, or whatever you’re investigating. Differentiating factors and unique value proposition belong here, as do any existing hurdles like products with similar names or functionality.

Market Analysis

All your primary and secondary survey data goes on display in this section, from competitive analysis to buyer behavior to market segmentation. The existence of strong markets is vital to your success, so many reports spend a lot of time on this section.

Profitability and Operating Costs

If you can estimate when you’ll likely be turning a profit, do so in this section. You should also include details about what it will cost to run your operation on a day to day basis, and what sort of margins you can expect in the short, medium, and long terms.

Conclusions and Recommendations

So…is it feasible? Pull all your data together to answer the big question.

Example Questions from a Feasibility Survey

If you were investigating the feasibility of a new wireless security camera, you might ask different segments of your audience questions like these to clarify their buying habits and position yourself in the market.

Is a Feasibility Study…Feasible?

Tackling a full blown feasibility study can feel daunting, but once you’ve invested the time for designing, collecting, analyzing, and reporting on all the data it can perform a wide variety of functions in a growing business.

Whether it’s a presentation to venture capital firms, writing a professional business plan, or guiding your early marketing efforts, this data will be invaluable. Take the time to do it right, and feasibility studies will become not just feasible, but maybe even enjoyable.

• Get Your Free Demo Today Get Demo
• See How Easy Alchemer Is to Use See Help Docs

Start making smarter decisions

Related posts, introducing alchemer workflow – the fastest, easiest, most effective way to close the loop with customers and employees.

• February 14, 2023
• 3 minute read

Alchemer Acquires Apptentive, Market-Leading Mobile Feedback Platform

• January 4, 2023

Don’t let State and Federal Regulations Crush Your IT Department 

• April 8, 2024
• 4 minute read

Don’t Let Unknown Data Siloes Put Your Entire School District at Risk

• April 1, 2024

How School IT Departments can Worry Less and Focus More on Security

• March 26, 2024

See it in Action

Request a demo.

• Privacy Overview
• Strictly Necessary Cookies
• 3rd Party Cookies

This website uses cookies so that we can provide you with the best user experience possible. Cookie information is stored in your browser and performs functions such as recognising you when you return to our website and helping our team to understand which sections of the website you find most interesting and useful.

Strictly Necessary Cookie should be enabled at all times so that we can save your preferences for cookie settings.

If you disable this cookie, we will not be able to save your preferences. This means that every time you visit this website you will need to enable or disable cookies again.

This website uses Google Analytics to collect anonymous information such as the number of visitors to the site, and the most popular pages.

Keeping this cookie enabled helps us to improve our website.

Please enable Strictly Necessary Cookies first so that we can save your preferences!

Research vs. Feasibility — What's the Difference?

Difference Between Research and Feasibility

Table of contents, key differences, comparison chart, methodologies, considerations, compare with definitions, feasibility, common curiosities, are feasibility studies only conducted for business projects, how do the outcomes of research and feasibility studies differ, why is research important, is a feasibility study always conclusive, why might a project be deemed infeasible, what makes a feasibility study critical before starting a project, can research be a part of a feasibility study, how does the focus of research and feasibility studies differ, how do technological advancements impact research and feasibility studies, can the results of a feasibility study affect future research, share your discovery.

Author Spotlight

Popular Comparisons

Trending Comparisons

New Comparisons

Trending Terms