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4 Key Elements That Comprise a Market Research Feasibility Study

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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
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How to conduct a feasibility study: Template and examples

Editor’s note : This article was last updated on 27 August 2004 to bolster the step-by-step guide with more detailed instructions, more robust examples, and a downloadable, customizable template.

Opportunities are everywhere. Some opportunities are small and don’t require many resources. Others are massive and need further analysis and evaluation.

One of your key responsibilities as a product manager is to evaluate the potential success of those opportunities before investing significant money, time, and resources. A feasibility study, also known as a feasibility assessment or feasibility analysis, is a critical tool that can help product managers determine whether a product idea or opportunity is viable, feasible, and profitable.

So, what is a feasibility analysis? Why should product managers use it? And how do you conduct one?

Click here to download our customizable feasibility study template .

What is a feasibility study?

A feasibility study is a systematic analysis and evaluation of a product opportunity’s potential to succeed. It aims to determine whether a proposed opportunity is financially and technically viable, operationally feasible, and commercially profitable.

A feasibility study typically includes an assessment of a wide range of factors, including the technical requirements of the product, resources needed to develop and launch the product, the potential market gap and demand, the competitive landscape, and economic and financial viability. These factors can be broken down into different types of feasibility studies:

• Technical feasibility — Evaluates the technical resources and expertise needed to develop the product and identifies any technical challenges that could arise
• Financial feasibility — Analyzes the costs involved, potential revenue, and overall financial viability of the opportunity
• Market feasibility — Assesses the demand for the product, market trends, target audience, and competitive landscape
• Operational feasibility — Looks at the organizational structure, logistics, and day-to-day operations required to launch and sustain the product
• Legal feasibility — Examines any legal considerations, including regulations, patents, and compliance requirements that could affect the opportunity

Based on the analysis’s findings, the product manager and their product team can decide whether to proceed with the product opportunity, modify its scope, or pursue another opportunity and solve a different problem.

Conducting a feasibility study helps PMs ensure that resources are invested in opportunities that have a high likelihood of success and align with the overall objectives and goals of the product strategy .

What are feasibility analyses used for?

Feasibility studies are particularly useful when introducing entirely new products or verticals. Product managers can use the results of a feasibility study to:

• Assess the technical feasibility of a product opportunity — Evaluate whether the proposed product idea or opportunity can be developed with the available technology, tools, resources, and expertise
• Determine a project’s financial viability — By analyzing the costs of development, manufacturing, and distribution, a feasibility study helps you determine whether your product is financially viable and can generate a positive return on investment (ROI)
• Evaluate customer demand and the competitive landscape — Assessing the potential market size, target audience, and competitive landscape for the product opportunity can inform decisions about the overall product positioning, marketing strategies, and pricing
• Identify potential risks and challenges — Identify potential obstacles or challenges that could impact the success of the identified opportunity, such as regulatory hurdles, operational and legal issues, and technical limitations
• Refine the product concept — The insights gained from a feasibility study can help you refine the product’s concept, make necessary modifications to the scope, and ultimately create a better product that is more likely to succeed in the market and meet users’ expectations

How to conduct a feasibility study

The activities involved in conducting a feasibility study differ from one organization to another. Also, the threshold, expectations, and deliverables change from role to role. However, a general set of guidelines can help you get started.

Here are some basic steps to conduct and report a feasibility study for major product opportunities or features:

1. Clearly define the opportunity

Imagine your user base is facing a significant problem that your product doesn’t solve. This is an opportunity. Define the opportunity clearly, support it with data, talk to your stakeholders to understand the opportunity space, and use it to define the objective.

2. Define the objective and scope

Each opportunity should be coupled with a business objective and should align with your product strategy.

Determine and clearly communicate the business goals and objectives of the opportunity. Align those objectives with company leaders to make sure everyone is on the same page. Lastly, define the scope of what you plan to build.

3. Conduct market and user research

Now that you have everyone on the same page and the objective and scope of the opportunity clearly defined, gather data and insights on the target market.

Include elements like the total addressable market (TAM) , growth potential, competitors’ insights, and deep insight into users’ problems and preferences collected through techniques like interviews, surveys, observation studies, contextual inquiries, and focus groups.

4. Analyze technical feasibility

Suppose your market and user research have validated the problem you are trying to solve. The next step should be to, alongside your engineers, assess the technical resources and expertise needed to launch the product to the market.

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Dig deeper into the proposed solution and try to comprehend the technical limitations and estimated time required for the product to be in your users’ hands. A detailed assessment might include:

• Technical requirements — What technology stack is needed? Does your team have the necessary expertise? Are there any integration challenges?
• Development timeline — How long will it take to develop the solution? What are the critical milestones?
• Resource allocation — What resources (hardware, software, personnel) are required? Can existing resources be repurposed?

5. Assess financial viability

If your company has a product pricing team, work closely with them to determine the willingness to pay (WTP) and devise a monetization strategy for the new feature.

Conduct a comprehensive financial analysis, including the total cost of development, revenue streams, and the expected return on investment (ROI) based on the agreed-upon monetization strategy. Key elements to include:

• Cost analysis — Breakdown of development, production, and operational costs
• Revenue projections — Estimated revenue from different pricing models
• ROI calculation — Expected return on investment and payback period

6. Evaluate potential risks

Now that you have almost a complete picture, identify the risks associated with building and launching the opportunity. Risks may include things like regulatory hurdles, technical limitations, and any operational risks.

A thorough risk assessment should cover:

• Technical risks — Potential issues with technology, integration, or scalability.
• Market risks — Changes in market conditions, customer preferences, or competitive landscape.
• Operational risks — Challenges in logistics, staffing, or supply chain management.
• Regulatory risks — Legal or compliance issues that could affect the product’s launch. For more on regulatory risks, check out this Investopedia article .

7. Decide, prepare, and share

Based on the steps above, you should end up with a comprehensive report that helps you decide whether to pursue the opportunity, modify its scope, or explore alternative options. Here’s what you should do next:

• Prepare your report — Compile all your findings, including the feasibility analysis, market research, technical assessment, financial viability, and risk analysis into a detailed report. This document should provide a clear recommendation on whether to move forward with the project
• Create an executive summary — Summarize the key findings and recommendations in a concise executive summary , tailored for stakeholders such as the C-suite. The executive summary should capture the essence of your report, focusing on the most critical points
• Present to stakeholders — Share your report with stakeholders, ensuring you’re prepared to discuss the analysis and defend your recommendations. Make sure to involve key stakeholders early in the process to build buy-in and address any concerns they may have
• Prepare for next steps — Depending on the decision, be ready to either proceed with the project, implement modifications, or pivot to another opportunity. Outline the action plan, resource requirements, and timeline for the next phase

Feasibility study template

The following feasibility study report template is designed to help you evaluate the feasibility of a product opportunity and provide a comprehensive report to inform decision-making and guide the development process.

Note: You can customize this template to fit your specific needs. Click here to download and customize this feasibility study report template .

Feasibility study example

Imagine you’re a product manager at a company that specializes in project management tools. Your team has identified a potential opportunity to expand the product offering by developing a new AI-powered feature that can automatically prioritize tasks for users based on their deadlines, workload, and importance.

A feasibility study can help you assess the viability of this opportunity. Here’s how you might approach it according to the template above:

• Opportunity description — The opportunity lies in creating an AI-powered feature that automatically prioritizes tasks based on user-defined parameters such as deadlines, workload, and task importance. This feature is expected to enhance user productivity by helping teams focus on high-priority tasks and ensuring timely project completion
• Problem statement — Many users of project management tools struggle with managing and prioritizing tasks effectively, leading to missed deadlines and project delays. Current solutions often require manual input or lack sophisticated algorithms to adjust priorities dynamically. The proposed AI-powered feature aims to solve this problem by automating the prioritization process, thereby reducing manual effort and improving overall project efficiency
• Business objective — The primary objective is to increase user engagement and satisfaction by offering a feature that addresses a common pain point. The feature is also intended to increase customer retention by providing added value and driving user adoption
• Scope — The scope includes the development of an AI algorithm capable of analyzing task parameters (e.g., deadlines, workload) and dynamically prioritizing tasks. The feature will be integrated into the existing project management tool interface, with minimal disruption to current users. Additionally, the scope covers user training and support for the new feature

Market analysis:

• Total addressable market (TAM)  — The TAM for this feature includes all users who actively manage projects and could benefit from enhanced task prioritization
• Competitor analysis — Competitor products such as Asana and Trello offer basic task prioritization features, but none use advanced AI algorithms. This presents a unique opportunity to differentiate this product by offering a more sophisticated solution
• User pain points — Surveys and interviews with current users reveal that 65 percent struggle with manual task prioritization, leading to inefficiencies and missed deadlines. Users expressed a strong interest in an automated solution that could save time and improve project outcomes

Technical requirements:

• AI algorithm development — The core of the feature is an AI algorithm that can analyze multiple factors to prioritize tasks. This requires expertise in machine learning, data processing, and AI integration
• Integration with existing infrastructure — The feature must seamlessly integrate with the existing architecture without causing significant disruptions. This includes data compatibility, API development, and UI/UX considerations
• Data handling and privacy — The feature will process sensitive project data, so robust data privacy and security measures must be implemented to comply with regulations like GDPR

Development timeline:

• Phase 1 (3 months) — Research and development of the AI algorithm, including training with sample datasets
• Phase 2 (2 months) — Integration with the platform, including UI/UX design adjustments
• Phase 3 (1 month) — Testing, quality assurance, and bug fixing
• Phase 4 (1 month) — User training materials and documentation preparation

Resource allocation:

• Development team  — Two AI specialists, three backend developers, two frontend developers, one project manager
• Hardware/software  — Additional cloud computing resources for AI processing, development tools for machine learning, testing environments

Cost analysis:

• Development costs — Estimated at $300,000, including salaries, cloud computing resources, and software licenses
• Marketing and launch costs  — $50,000 for promotional activities, user onboarding, and initial support
• Operational costs  — $20,000/year for maintenance, AI model updates, and ongoing support

Revenue projections:

• Pricing model — The AI-powered feature will be offered as part of a premium subscription tier, with an additional monthly fee of $10/user
• User adoption — Based on user surveys, an estimated 25 percent of the current user base (10,000 users) is expected to upgrade to the premium tier within the first year
• Projected revenue — First-year revenue is projected at $1.2 million, with an expected growth rate of 10 percent annually

ROI calculation:

• Break-even point — The project is expected to break even within 6 months of launch
• Five-year ROI — The feature is projected to generate a 200% ROI over five years, driven by increased subscription fees and user retention

Technical risks:

• AI algorithm complexity — Developing an accurate and reliable AI algorithm is challenging and may require multiple iterations
• Integration issues — There is a risk that integrating the new feature could disrupt the existing platform, leading to user dissatisfaction

Market risks:

• User adoption — There’s a risk that users may not perceive sufficient value in the AI feature to justify the additional cost, leading to lower-than-expected adoption rates

Operational risks:

• Support and maintenance — Maintaining the AI feature requires continuous updates and monitoring, which could strain the development and support teams

Regulatory risks:

• Data privacy compliance — Handling sensitive project data requires strict adherence to data privacy regulations. Noncompliance could lead to legal challenges and damage to the company’s reputation
• Decision — Based on the comprehensive analysis, the recommendation is to proceed with the development and launch of the AI-powered task prioritization feature. The potential for increased user engagement, differentiation from competitors, and positive ROI justifies the investment
• Prepare the report — A detailed report will be compiled, including all findings from the feasibility study, cost-benefit analysis, and risk assessments. This report will be presented to key stakeholders for approval
• Create an executive summary — A concise executive summary will be prepared for the C-suite, highlighting the key benefits, expected ROI, and strategic alignment with the company’s goals
• Next steps — Upon approval, the project will move into the development phase, following the timeline and resource allocation outlined in the study. Continuous monitoring and iterative improvements will be made based on user feedback and performance metrics

8. Executive summary

This feasibility study evaluates the potential for developing and launching an AI-powered task prioritization feature within our project management tool. The feature is intended to automatically prioritize tasks based on deadlines, workload, and task importance, thus improving user productivity and project efficiency. The study concludes that the feature is both technically and financially viable, with a projected ROI of 200 percent over five years. The recommendation is to proceed with development, as the feature offers a significant opportunity for product differentiation and user satisfaction.

Mock feasibility study report

Now let’s see what a feasibility study report based on the above example scenario would look like ( download an example here ):

Introduction

The purpose of this feasibility study is to assess the viability of introducing an AI-powered task prioritization feature into our existing project management software. This feature aims to address the common user challenge of manually prioritizing tasks, which often leads to inefficiencies and missed deadlines. By automating this process, we expect to enhance user productivity, increase customer retention, and differentiate our product in a competitive market.

Market and user research

The total addressable market (TAM) for this AI-powered task prioritization feature includes all current and potential users of project management tools who manage tasks and projects regularly. Based on market analysis, the current user base primarily consists of mid-sized enterprises and large organizations, where task management is a critical component of daily operations.

• Competitor analysis  — Key competitors in the project management space, such as Asana and Trello, offer basic task prioritization features. However, these solutions lack advanced AI capabilities that dynamically adjust task priorities based on real-time data. This gap in the market presents an opportunity for us to differentiate our product by offering a more sophisticated, AI-driven solution
• User pain points — Surveys and interviews conducted with our current user base reveal that 65 percent of users experience challenges with manual task prioritization. Common issues include difficulty in maintaining focus on high-priority tasks, inefficient use of time, and the tendency to miss deadlines due to poor task management. Users expressed a strong interest in an automated solution that could alleviate these challenges, indicating a high demand for the proposed feature

Technical feasibility

• AI algorithm development — The core component of the feature is an AI algorithm capable of analyzing multiple task parameters, such as deadlines, workload, and task importance. The development of this algorithm requires expertise in machine learning, particularly in natural language processing (NLP) and predictive analytics. Additionally, data processing capabilities will need to be enhanced to handle the increased load from real-time task prioritization
• Integration with existing infrastructure — The AI-powered feature must be integrated into our existing project management tool with minimal disruption. This includes ensuring compatibility with current data formats, APIs, and the user interface. The integration will also require modifications to the UI/UX to accommodate the new functionality while maintaining ease of use for existing features
• Data handling and privacy — The feature will process sensitive project data, making robust data privacy and security measures critical. Compliance with regulations such as GDPR is mandatory, and the data flow must be encrypted end-to-end to prevent unauthorized access. Additionally, user consent will be required for data processing related to the AI feature
• Phase 1 (3 months) — Research and development of the AI algorithm, including dataset acquisition, model training, and initial testing
• Phase 2 (2 months) — Integration with the existing platform, focusing on backend development and UI/UX adjustments
• Phase 3 (1 month) — Extensive testing, quality assurance, and bug fixing to ensure stability and performance
• Phase 4 (1 month) — Development of user training materials, documentation, and preparation for the product launch

Financial analysis

• Development costs — Estimated at $300,000, covering salaries, cloud computing resources, machine learning tools, and necessary software licenses
• Marketing and launch costs — $50,000 allocated for promotional campaigns, user onboarding programs, and initial customer support post-launch
• Operational costs — $20,000 annually for ongoing maintenance, AI model updates, and customer support services
• Pricing model — The AI-powered task prioritization feature will be included in a premium subscription tier, with an additional monthly fee of $10 per user
• User adoption — Market research suggests that approximately 25% of the current user base (estimated at 10,000 users) is likely to upgrade to the premium tier within the first year
• Projected revenue — First-year revenue is estimated at $1.2 million, with an anticipated annual growth rate of 10% as more users adopt the feature
• Break-even point — The project is expected to reach its break-even point within 6 months of the feature’s launch
• Five-year ROI — Over a five-year period, the feature is projected to generate a return on investment (ROI) of 200 percent, driven by steady subscription revenue and enhanced user retention

Risk assessment

• AI algorithm complexity — Developing a sophisticated AI algorithm poses significant technical challenges, including the risk of inaccuracies in task prioritization. Multiple iterations and extensive testing will be required to refine the algorithm
• Integration issues — Integrating the new feature into the existing platform could potentially cause compatibility issues, resulting in performance degradation or user dissatisfaction
• User adoption — There is a possibility that users may not perceive enough value in the AI-powered feature to justify the additional cost, leading to lower-than-expected adoption rates and revenue
• Support and maintenance — The ongoing support and maintenance required for the AI feature, including regular updates and monitoring, could place a significant burden on the development and customer support teams, potentially leading to resource constraints
• Data privacy compliance — Handling sensitive user data for AI processing necessitates strict adherence to data privacy regulations such as GDPR. Failure to comply could result in legal repercussions and damage to the company’s reputation

Conclusion and recommendations

The feasibility study demonstrates that the proposed AI-powered task prioritization feature is both technically and financially viable. The feature addresses a significant user pain point and has the potential to differentiate the product in a competitive market. With an estimated ROI of 200 percent over five years and strong user interest, it is recommended that the project move forward into the development phase.

Next steps include finalizing the development plan, securing approval from key stakeholders, and initiating the development process according to the outlined timeline and resource allocation. Continuous monitoring and iterative improvements will be essential to ensure the feature meets user expectations and achieves the projected financial outcomes.

Overcoming stakeholder management challenges

The ultimate challenge that faces most product managers when conducting a feasibility study is managing stakeholders .

Stakeholders may interfere with your analysis, jumping to conclusions that your proposed product or feature won’t work and deeming it a waste of resources. They may even try to prioritize your backlog for you.

Here are some tips to help you deal with even the most difficult stakeholders during a feasibility study:

• Use hard data to make your point — Never defend your opinion based on your assumptions. Always show them data and evidence based on your user research and market analysis
• Learn to say no — You are the voice of customers, and you know their issues and how to monetize them. Don’t be afraid to say no and defend your team’s work as a product manager
• Build stakeholder buy-in early on — Engage stakeholders from the beginning of the feasibility study process by involving them in discussions and seeking their input. This helps create a sense of ownership and ensures that their concerns and insights are considered throughout the study
• Provide regular updates and maintain transparency — Keep stakeholders informed about the progress of the feasibility study by providing regular updates and sharing key findings. This transparency can help build trust, foster collaboration, and prevent misunderstandings or misaligned expectations
• Leverage stakeholder expertise — Recognize and utilize the unique expertise and knowledge that stakeholders bring to the table. By involving them in specific aspects of the feasibility study where their skills and experience can add value, you can strengthen the study’s outcomes and foster a more collaborative working relationship

Final thoughts

A feasibility study is a critical tool to use right after you identify a significant opportunity. It helps you evaluate the potential success of the opportunity, analyze and identify potential challenges, gaps, and risks in the opportunity, and provides a data-driven approach in the market insights to make an informed decision.

By conducting a feasibility study, product teams can determine whether a product idea is profitable, viable, feasible, and thus worth investing resources into. It is a crucial step in the product development process and when considering investments in significant initiatives such as launching a completely new product or vertical.

For a more detailed approach and ready-to-use resources, consider using the feasibility study template provided in this post. If you’re dealing with challenging stakeholders, remember the importance of data-driven decisions, maintaining transparency, and leveraging the expertise of your team.

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• How to conduct a feasibility study: Tem ...

How to conduct a feasibility study: Templates and examples

Conducting a feasibility study is an important step in successful project management. By evaluating the viability of a proposed project, a feasibility study helps you identify potential challenges and opportunities, ensuring you make informed decisions. In this guide, we’ll walk you through how to conduct a feasibility study with practical templates and real-world examples, designed for project managers seeking to optimize their project planning process.

It can be exciting to run a large, complex project that has a huge potential impact on your organization. On the one hand, you’re driving real change. On the other hand, failure is intimidating. 

What is a feasibility study? 

A feasibility study—sometimes called a feasibility analysis or feasibility report—is a way to evaluate whether or not a project plan could be successful. A feasibility study evaluates the practicality of your project plan in order to judge whether or not you’re able to move forward with the project. 

It does so by answering two questions: 

Does our team have the required tools or resources to complete this project? 

Will there be a high enough return on investment to make the project worth pursuing? 

Benefits of conducting a feasibility study

There are several key benefits to conducting a feasibility study before launching a new project:

Confirms market opportunities and the target market before investing significant resources

Identifies potential issues and risks early on

Provides in-depth data for better decision making on the proposed project's viability

Creates documentation on expected costs and benefits, including financial analysis

Obtains stakeholder buy-in by demonstrating due diligence

Feasibility studies are important for projects that represent significant investments for your business. Projects that also have a large potential impact on your presence in the market may also require a feasibility assessment. 

As the project manager , you may not be directly responsible for driving the feasibility study, but it’s important to know what these studies are. By understanding the different elements that go into a feasibility study, you can better support the team driving the feasibility study and ensure the best outcome for your project.

When should you conduct a feasibility analysis?

A feasibility study should be conducted after the project has been pitched but before any work has actually started. The study is part of the project planning process. In fact, it’s often done in conjunction with a SWOT analysis or project risk assessment , depending on the specific project. 

Feasibility studies help: 

Confirm market opportunities before committing to a project

Narrow your business alternatives

Create documentation about the benefits and disadvantages of your proposed initiative

Provide more information before making a go-or-no-go decision

You likely don’t need a feasibility study if:

You already know the project is feasible

You’ve run a similar project in the past

Your competitors are succeeding with a similar initiative in market

The project is small, straightforward, and has minimal long-term business impact

Your team ran a similar feasibility analysis within the past three years

One thing to keep in mind is that a feasibility study is not a project pitch. During a project pitch, you’re evaluating whether or not the project is a good idea for your company and whether the goals of the project are in line with your overall strategic plan. Typically, once you’ve established that the project is a good idea, you'll run a feasibility study to confirm that the project is possible with the tools and resources you have at your disposal. 

Types of feasibility studies

There are five main types of feasibility studies: technical feasibility, financial feasibility, market feasibility (or market fit), operational feasibility, and legal feasibility. Most comprehensive feasibility studies will include an assessment of all five of these areas.

Technical feasibility

A technical feasibility study reviews the technical resources available for your project. This study determines if you have the right equipment, enough equipment, and the right technical knowledge to complete your project objectives . For example, if your project plan proposes creating 50,000 products per month, but you can only produce 30,000 products per month in your factories, this project isn’t technically feasible. 

Financial feasibility

Financial feasibility describes whether or not your project is fiscally viable. A financial feasibility report includes a cost-benefit analysis of the project. It also forecasts an expected return on investment (ROI) and outlines any financial risks. The goal at the end of the financial feasibility study is to understand the economic benefits the project will drive. 

Market feasibility

The market feasibility study is an evaluation of how your team expects the project’s deliverables to perform in the market. This part of the report includes a market analysis, a market competition breakdown, and sales projections.

Operational feasibility

An operational feasibility study evaluates whether or not your organization is able to complete this project. This includes staffing requirements, organizational structure, and any applicable legal requirements. At the end of the operational feasibility study, your team will have a sense of whether or not you have the resources, skills, and competencies to complete this work. 

Legal feasibility

A legal feasibility analysis assesses whether the proposed project complies with all relevant legal requirements and regulations. This includes examining legal and regulatory barriers, necessary permits, licenses, or certifications, potential legal liabilities or risks, and intellectual property considerations. The legal feasibility study ensures that the project can be completed without running afoul of any laws or incurring undue legal exposure for the organization.

Feasibility assessment checklist

Most feasibility studies are structured in a similar way. These documents serve as an assessment of the practicality of a proposed business idea. Creating a clear feasibility study helps project stakeholders during the decision making process. 

The essential elements of a feasibility study are: 

An executive summary describing the project’s overall viability

A description of the product or service being developed during this project

Any technical considerations , including technology, equipment, or staffing

The market survey , including a study of the current market and the marketing strategy 

The operational feasibility study evaluates whether or not your team’s current organizational structure can support this initiative

The project timeline

Financial projections based on your financial feasibility report

6 steps to conduct a feasibility study

You likely won’t be conducting the feasibility study yourself, but you will probably be called on to provide insight and information. To conduct a feasibility study, hire a trained consultant or, if you have an in-house project management office (PMO) , ask if they take on this type of work. In general, here are the steps they’ll take to complete this work: 

1. Run a preliminary analysis

Creating a feasibility study is a time-intensive process. Before diving into the feasibility study, it’s important to evaluate the project for any obvious and insurmountable roadblocks. For example, if the project requires significantly more budget than your organization has available, you likely won’t be able to complete it. Similarly, if the project deliverables need to be live and in the market by a certain date but won’t be available for several months after that, the project likely isn’t feasible either. These types of large-scale obstacles make a feasibility study unnecessary because it’s clear the project is not viable.

2. Evaluate financial feasibility

Think of the financial feasibility study as the projected income statement for the project. This part of the feasibility study clarifies the expected project income and outlines what your organization needs to invest—in terms of time and money—in order to hit the project objectives. 

During the financial feasibility study, take into account whether or not the project will impact your business's cash flow. Depending on the complexity of the initiative, your internal PMO or external consultant may want to work with your financial team to run a cost-benefit analysis of the project. 

3. Run a market assessment

The market assessment, or market feasibility study, is a chance to identify the demand in the market. This study offers a sense of expected revenue for the project and any potential market risks you could run into. 

The market assessment, more than any other part of the feasibility study, is a chance to evaluate whether or not there’s an opportunity in the market. During this study, it’s critical to evaluate your competitor’s positions and analyze demographics to get a sense of how the project will go. 

4. Consider technical and operational feasibility

Even if the financials are looking good and the market is ready, this initiative may not be something your organization can support. To evaluate operational feasibility, consider any staffing or equipment requirements this project needs. What organizational resources—including time, money, and skills—are necessary in order for this project to succeed? 

Depending on the project, it may also be necessary to consider the legal impact of the initiative. For example, if the project involves developing a new patent for your product, you will need to involve your legal team and incorporate that requirement into the project plan.

5. Review project points of vulnerability

At this stage, your internal PMO team or external consultant have looked at all four elements of your feasibility study—financials, market analysis, technical feasibility, and operational feasibility. Before running their recommendations by you and your stakeholders, they will review and analyze the data for any inconsistencies. This includes ensuring the income statement is in line with your market analysis. Similarly, now that they’ve run a technical feasibility study, are any liabilities too big of a red flag? (If so, create a contingency plan !) 

Depending on the complexity of your project, there won’t always be a clear answer. A feasibility analysis doesn’t provide a black-and-white decision for a complex problem. Rather, it helps you come to the table with the right questions—and answers—so you can make the best decision for your project and for your team.

6. Propose a decision

The final step of the feasibility study is an executive summary touching on the main points and proposing a solution. 

Depending on the complexity and scope of the project, your internal PMO or external consultant may share the feasibility study with stakeholders or present it to the group in order to field any questions live. Either way, with the study in hand, your team now has the information you need to make an informed decision.

Feasibility study examples

To better understand the concepts behind feasibility assessments, here are two hypothetical examples demonstrating how these studies can be applied in real-world scenarios.

Example 1: New product development

A consumer goods company is considering launching a new product line. Before investing in new product development, they conduct a feasibility study to assess the proposed project.

The feasibility study includes:

Market research to gauge consumer interest, assess competitor offerings, and estimate potential market share for the target market.

Technological considerations, including R&D requirements, production processes, and any necessary patents or certifications.

In-depth financial analysis projects sales volumes, revenue, costs, and profitability over a multi-year period.

Evaluation of organizational readiness, including the skills of the current management team and staff to bring the new product to market.

Assessment of legal feasibility to ensure compliance with regulations and identify any potential liability issues.

The comprehensive feasibility study identifies a promising market opportunity for the new business venture. The company decides to proceed with the new project, using the feasibility report as a template for their business development process. The study helps secure funding from key decision-makers, setting this start-up product initiative up for success.

Example 2: Real estate development deal

A property developer is evaluating the feasibility of purchasing land for a new residential community. They commission a feasibility study to determine the viability of this real estate development project.

The feasibility assessment covers:

Detailed analysis of the local housing market, including demand drivers, comparable properties, pricing, and absorption rates.

Site planning to assess the property's capacity, constraints, and technological considerations.

In-depth review of legal feasibility, including zoning, permitting, environmental regulations, and other potential legal hurdles.

Financial analysis modeling various development scenarios and estimating returns on investment.

Creation of an opening day balance sheet projecting the assets, liabilities, and equity for the proposed project.

Sensitivity analysis to evaluate the impact of changes in key assumptions on the project's scope and profitability.

The feasibility study concludes that while the real estate start-up is viable, it carries significant risk. Based on these findings, the developer makes an informed decision to move forward, but with a revised project's scope and a phased approach to mitigate risk. The comprehensive feasibility analysis proves critical in guiding this major investment decision.

Which phase of the project management process involves feasibility studies?

Feasibility studies are a key part of the project initiation and planning phases. They are typically conducted after a project has been conceptualized but before significant resources are invested in detailed planning and execution.

The purpose of a feasibility assessment is to objectively evaluate the viability of a proposed project, considering factors such as technical feasibility, market demand, financial costs and benefits, legal requirements, and organizational readiness. By thoroughly assessing these aspects, a feasibility study helps project stakeholders make an informed go-or-no-go decision.

While feasibility studies are a critical tool in the early stages of project management, they differ from other planning documents like project charters, business cases, and business plans. Here's a closer look at these key differences:

Feasibility study vs. project charter

A project charter is a relatively informal document to pitch your project to stakeholders. Think of the charter as an elevator pitch for your project objectives, scope, and responsibilities. Typically, your project sponsor or executive stakeholders review the charter before ratifying the project. 

A feasibility study should be implemented after the project charter has been ratified. This isn’t a document to pitch whether or not the project is in line with your team’s goals—rather, it’s a way to ensure the project is something you and your team can accomplish.

Feasibility study vs. business case

A business case is a more formalized version of the project charter. While you’d typically create a project charter for small or straightforward initiatives, you should create a business case if you are pitching a large, complex initiative that will make a major impact on the business. This longer, more formal document will also include financial information and typically involve more senior stakeholders. 

After your business case is approved by relevant stakeholders, you'll run a feasibility study to make sure the work is doable. If you find it isn’t, you might return to your executive stakeholders and request more resources, tools, or time in order to ensure your business case is feasible.

Feasibility study vs. business plan

A business plan is a formal document outlining your organization’s goals. You typically write a business plan when founding your company or when your business is going through a significant shift. Your business plan informs a lot of other business decisions, including your three- to five-year strategic plan . 

As you implement your business and strategic plan, you’ll invest in individual projects. A feasibility study is a way to evaluate the practicality of any given individual project or initiative.

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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).

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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? "

Why Feasibility Studies Matter (With Examples)

Published: November 11, 2022

As a business leader, you want your projects to generate a return on investment. So before you begin any new venture, it’s a good idea to complete a feasibility study.

Feasibility studies help to determine the success (or failure) of your proposed project or plan. These types of studies help you make better, informed business decisions. As a result, you can save time and money by starting a plan or a project that you know has a high ROI.

Here, you’ll learn how to run feasibility studies. This post includes:

What is a feasibility study?

Feasibility study benefits, types of feasibility studies, how to write a feasibility study, feasibility study examples.

A feasibility study analyzes a potential project’s benefits, risks, costs, and potential outcomes. After completing a feasibility study, you and your team will have enough information to determine if the proposed project is a worthy investment.

Two types of sales forecasting data are appropriate for feasibility studies:

• Quantitative forecasting uses historical business data to predict trends.
• Qualitative sales forecasting data takes customers’ opinions, market research, and survey results into account.

The type of feasibility study you run determines which type of data you will need. Consider using qualitative forecasting data to determine how well your audience might receive your product. Quantitative data can help you predict revenue.

As a team leader, it’s your job to ensure your team hits yearly sales revenue goals. That may include deciding to take on a project based on projected sales forecasting data.

However, you do not want to take on a proposed plan or project without being sure the project will benefit your organization. Companies with accurate forecasts are 10% more likely to increase revenue yearly , according to Intangent.

That’s why feasibility studies matter. Combine sales forecasting data with the insight from a feasibility report, and you’ll be able to gauge the success rate of your proposed plan before you start.

Other feasibility benefits include:

• Determining if the project is appropriate for your team.
• Making sound decisions for your team.
• Avoiding mistakes.
• Narrowing the focus of the project.
• Determining project and team needs.
• Determining which departments need to be involved in the project.
• Calculating the amount and source of appropriate funding.
• Assessing the success or failure rate of your project.
• Estimating ROI.

Not only do feasibility studies help determine if a proposed plan or project is viable, but they also help narrow the focus of the project. Overall, feasibility studies can help keep your project on track from the start.

Now that you understand the benefits of feasibility studies, it’s time to determine which kind of feasibility study is best for your team.

Technical Feasibility Study

A technical feasibility study looks at your project’s technical aspects. This type of study answers the question: do you have the specialized resources and capabilities to carry out this project?

You might have the appropriate funding for a project, but a technical feasibility study will help you determine if you have the right processes, systems, and staffing for the job.

Best for: Software development teams and project development teams

Financial or Economic Feasibility Study

Financial feasibility studies can help you determine if you have the funding for your project. Plus, you’ll learn the venture is an overall good investment for your team and your company. These kinds of feasibility studies ask: is the allotted funding amount appropriate for this project?

By completing a financial feasibility study, you’ll have already identified funding sources, expenses, your budget, any potential risks, and expected revenue.

Best for: Financial managers and project managers

Operational Feasibility Study

As the name suggests, an operational feasibility study analyzes whether or not your team is equipped to carry out the proposed plan or project. This feasibility study answers the questions:

• Does your team have the means to complete the project?
• Will the project add value for your team or your customers?

Consider conducting an operational feasibility study if you have developed a solution for a potential problem. This kind of study will help you determine if the solution solves the problem or creates more issues.

Best for: Project managers and stakeholders

Legal Feasibility Study

This feasibility study should be performed to determine if your proposed project is legal and ethical. Legal feasibility studies are designed to keep you and your team aligned with local, state, and federal laws.

If you are unsure if your project is unethical or unlawful, a legal feasibility study will help you make the appropriate decision before you begin.

Best for: Legal departments and project managers

Scheduling Feasibility Study

When starting a new project, you’ll often be asked, “When can we reasonably expect this project to be completed?”

If you and your team are working for clients and are on a deadline, a scheduling feasibility study looks at the project’s timeline. That can help your team determine a reasonable completion date.

After completing a scheduling feasibility study, you might find the plan requires more time than you thought. This is helpful to know before you begin a project.

Best for: Stakeholders, project managers, and their teams

If you are wondering how to write a feasibility study, look no further than our feasibility study template .

Before you jump into writing your own study with our feasibility study template, take a minute to familiarize yourself with each section of the template. Keep in mind, the feasibility study temple can be customized to fit the needs of you and your team.

1. Executive Summary

Your executive summary should be a one-page summary of the entire study. Make sure to include the following:

• The project name.
• A description of the project.
• The goals of the project or plan.
• The target market.

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2. Business Explanation

This section of the feasibility study is your space to introduce the business concept of your project or plan. Consider discussing:

• The purpose of the project or plan.
• Products or services.
• Competitive advantages.
• Experience of its founders.

If your project is feasible, you’ll want to be as specific as possible in this section and discuss the project’s projected success.

3. Market Overview

This section of your feasibility study should discuss your target market and why your project or plan will (or will not) succeed. You’ll want to discuss your target market in-depth, its pain points, and how your proposed product or service will solve the problems.

You’ll want to include valid data in this section. Consider featuring:

• The market size and demographics.
• The market psychographics.
• Competitors and substitutes.

4. Financial Projections

Every good business endeavor is meant to make a profit. Your feasibility study should determine if the project or plan is a financially wise investment. The financial projections section of the feasibility template outlines and discusses critical financial metrics.

Considering including and discussing:

• Capital needs.
• Projected revenue and expenses.
• Projected revenue needed to break even.

5. Feasibility Assessment and Conclusion

In your conclusion, be as clear and specific about your proposed project or plan as possible. Use statements like, “Based on our assessment of (X), we have deemed this business project feasible.”

Feasibility studies can be helpful across your entire organization — from the sales team to the product development team. Here are a few examples of feasibility studies conducted in various industries.

Howard County Public School System

The Howard County Public School System’s feasibility study dives into projected student enrollment over a 10-year period.

What we love: The school system offers an excellent example of a brief, but thorough, executive summary. In this section, Howard County Public Schools also includes specific historical data used throughout the study.

Town of Walpole, Massachusetts

This feasibility study from the Walpole, Massachusetts’ explores the town’s recreation programming and facilities. Throughout, the document includes program recommendations with data that explains how the researchers came to this conclusion.

What we love: This document combines several different types of feasibility studies (financial, technical, and operational) into one comprehensive study. Remember, you can mold your feasibility study to fit your organization’s needs best.

U.S. Fish and Wildlife Service

In this example, the U.S. Fish and Wildlife Service explores the feasibility of reintroducing sea otters to areas of the Pacific coast. This study also provides a model for structuring the objectives section of this document. A good feasibility study is clear and to the point in each section.

What we love: Here, the U.S. Fish and Wildlife Service distinguishes what the study covers (potential options for reintroduction), and what it cannot accomplish (projected population growth from reintroduction).

While your feasibility study seeks to assess a project’s viability, your document will have a limited scope. If you’ll need to gather additional information moving forward, mention that in your feasibility study.

Holdrege Area Public Library

Your feasibility study doesn’t need to be all text. The Holdrege Area Public Library makes use of graphics and charts to convey information in its feasibility study.

What we love: Infographics are easy to read. You can absorb important information with a quick skim.

Running Your Feasibility Study

Accurately predicting the success of a project might seem like a daunting task. But it doesn’t have to be. There are many ways to conduct a feasibility study. Stary by leveraging the tools you already have, like HubSpot’s Forecasting Software and our feasibility study template.

Your job as a sales leader is to help your team increase your organization’s bottom line. With the use of sales forecasting data and feasibility studies, you’ll be able to pursue the projects that will yield the highest ROI.

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A free template to help you prove your project's feasibility.

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Feasibility Study Blueprint for Project Success & Beyond

Discover the power of feasibility studies and learn how to create a strong project blueprint. Explore the steps, examples, and benefits of feasibility studies.

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Imagine investing time, effort, and capital into a project only to realize it's rotten with flaws and limitations. The consequences can be detrimental, ranging from financial setbacks to damaged reputations.

Enter the feasibility study — an indispensable tool to evaluate your project and any risks. A feasibility study helps plan flawless products and services and address limitations early.

In this blueprint, we explore the power of feasibility studies and unveil the steps for creating one. We'll guide you through the principles and best practices and show you examples.

Let's jump right in.

What is a feasibility study?

A feasibility study looks at a project’s potential before spending resources.

Consider it a detective’s investigation that uncovers potential problems you could face and if it’s worth it.

The key parts of a feasibility study include:

• Analyzing the project's technical needs
• Checking if it makes financial sense
• Identifying risks and challenges
• And considering any legal or rule-related factors

Let’s say your new business venture is to open a gym. Here; a feasibility study would involve the following:

• Examining the location
• Estimating the initial investment required
• Analyzing the target market
• Assessing competition

It'd also consider factors like zoning regulations, environmental impact, and potential risks.

When do you need a feasibility study?

A feasibility study happens before starting work on a project to assess its viability. However, let’s first focus on situations outside of project management where a feasibility study comes into play.

Entrepreneurs use feasibility studies to decide if their new business or product ideas are realistic and can be done. These studies are also called business plans in this setting.

In construction, a feasibility study is a part of valuing the practicality of projects. They use it to identify  resources needed vs. available , the overall cost, and return on investment (ROI).

Feasibility studies are also common in market entry strategies. Here they study market conditions, competition, and user stories.

In these scenarios, they can also fulfill the role of an investment proposal tool or a  plan of action  to guide ventures later.

When do you need a feasibility study in project management?

In project management, you should do the feasibility study after pitching the project but before starting.

‎In project management, feasibility studies help highlight whether the project aligns with the business’s  goals . It also helps them to see if they can accomplish the goals within the given constraints.

In Agile project management, feasibility studies may differ, but the purpose remains the same. For  Agile  feasibility studies, the focus is more concentrated and lightweight than in traditional methodologies. They are carried out before the initial project iteration and then done as the project progresses.

However, in certain projects and situations, a feasibility study isn’t necessary. These are:

• If the project is of a trivial or mundane nature.
• When the project has extensive research and validity behind it.

What benefits are there with a feasibility study?

Other than the stated advantage of clarity before tackling a project, this study has many other benefits. Let's explore these advantages a little deeper.

Risk reduction:  Feasibility studies help spot potential risks and challenges early on.

Efficient use of resources:  Doing a feasibility study lets managers see how they might use resources. And whether the resources needed would be made available. They can then plan the resource allocation (once the ball gets rolling).

Smart decision-making:  This research can give you the knowledge you need to make wise project choices in the future.

Financial planning:  Feasibility studies help managers ‌estimate costs, predict income, and check ROI.

Meeting rules:  Feasibility studies look at a project's legal and compliance aspects (often overlooked). Doing this early instead of at a product launch can save countless headaches.

It helps gain support from important stakeholders:  Showing them a well-thought-out plan will help you to gain their confidence and set their expectations early.

4 types of feasibility studies

Feasibility studies come in 4 different types, each geared at helping you know what you are getting into.

‎Let's explore the four main types.

Financial feasibility

A financial feasibility study determines whether a project is financially viable and can make enough profit. It looks at the costs, revenues, and financial implications of the whole project.

Let's look at an example financial feasibility study for a new Italian restaurant. It’d center around the costs of ingredients, rent, equipment, and employee salaries and compare them to projected profit.

Market feasibility

Market feasibility studies assess the potential market demand and acceptance for a product or service. They examine market size, customer preferences, competition, and market trends.

For instance, a market feasibility study for the restaurant might analyze the demand for similar cuisine. They could study consumer preferences for Italian dishes and preferred pricing. Doing this will also help the restaurant avoid overstocking products (ingredients) because they can anticipate the level of demand.

Technical feasibility

Technical feasibility studies determine the likelihood of success from a technical perspective. They assess factors like available technology, required resources, and technical expertise.

Let’s continue with the restaurant example and see how the technical study looks. The study will check if launching the restaurant is possible within the specified timeframe. It will also check if the necessary stoves are available and if the head chef has the required cooking skills.

Operational feasibility

Operational feasibility determines whether businesses can implement the project within themselves. It examines available resources, required skills, and existing infrastructure.

Let’s imagine the restaurant is planning to introduce a delivery service. The study would assess if the restaurant has enough staff for delivery (or would outsource it) and if the kitchen can handle additional orders. It can also check if the planned POS system can integrate with the delivery platform.

Conduct a feasibility study in 8 steps

Next up, let’s look at how to conduct a complete feasibility study. We’ve broken down the general process into eight steps, which you can apply across most industries.

1. Gather the data (pre-analysis)

Gathering relevant data and information is a prerequisite for a successful feasibility study.

Here, you focus on collecting the necessary facts and details to analyze and use in the study later. Focus on data that applies to the four types of feasibility studies and gather the information you need for each of those.

You can gather primary data by conducting firsthand surveys, interviews, or observations. You can also get secondary data from existing sources like reports, databases, or industry publications.

Using both sources gives you a more comprehensive understanding of the project's feasibility.

2. Conduct market analysis

Now let’s go over the bases you need to cover for a market analysis:

• Explore market aspects such as size, trends, customer preferences, and competition.
• Examine current market statistics to understand the potential demand for your product or service.
• Evaluate the competitive landscape to identify existing players and their strategies.

‎For your market feasibility study to be successful, your product or service should be competitive. Your business should also be able to match ‌current market demand (or scale to meet them).

3. Evaluate technical feasibility

Next, assess the technical feasibility of the project requirements and constraints.

Consider factors such as:

• Available technology

Then specify if the required infrastructure and tools are in place or if more is needed. Ask questions like, what impact does missing a few staff have on output and sales? How much downtime can you afford because of technical problems?

Also, use this study to examine potential solutions if needed. For example, can you afford another hire if you don’t have enough staff? How long will it take? Is there a way to avoid delays? Can upskilling a few staff help?

4. Perform financial analysis

Next, evaluate the projected costs, potential revenue streams, and ROI.

Then compare ‌the above against funding sources, timeline, and budget.

5. Assess legal and regulatory factors

Next, evaluate the legal and regulatory aspects that may impact your project's feasibility.

Consider compliance requirements, permits, licenses, and any potential legal obstacles. Try to find reliable outside sources if the need arises to help you do this. It would be a shame if your product or service goes to market only to fail because of poor compliance.

6. Analyze environmental and social impacts

In this step, you should check the environmental and social impact of your proposed business.

‎Think about the project’s influence on environmental regulations and corporate social responsibility. Consider things like resource usage, garbage control and their effect on the public.

7. Identify and evaluate risks

Next, we identify, evaluate, and plan for potential risks and challenges.

Why do a risk analysis in a feasibility study? The answer is that sometimes risks can be too big to take (and cause project failure).

8. Summarize findings and recommendations

Finally, it's time to summarize and give recommendations.

Make the summary concise, as you might use it to give insights to stakeholders and decision-makers.

Let’s use our Italian restaurant example again and assume you conducted a feasibility study. After all the evaluations, you found a high demand for the proposed cuisine. The necessary resources and expertise are available, and the financial projections indicate profitability. However, you did identify the risk of stiff competition in the local area. Based on this, you recommend that the restaurant strategize ways to differentiate itself from competitors.

Examples of feasibility studies

Let’s explore a couple of examples to show you the power of the feasibility study.

Marketing feasibility study

We will illustrate a situation where a firm plans to introduce a new type of product to the market.

To assess  technical feasibility , they analyze factors like software tools and hardware infrastructure.

For  operational feasibility , they determine if they can execute the marketing plan. They check factors like experienced staff availability,  capacity , and potential operational challenges.

In the  financial study , the company would analyze projected costs and potential revenue streams. They consider production, marketing, and ad costs and assess the expected ROI.

For the  market study , they research the audience, trends, and competitors.

Software development feasibility study

Let us shift our focus and contemplate an alternative situation. This organization makes new software for task management and want to know if their new app is a good idea.

In the  technical analysis , they evaluate if they possess the necessary software engineers, coding dialects, and software applications.

For  operational feasibility , they think about staff training, the potential impact on existing systems, and ease of integration.

In the  financial study , they analyze costs such as hiring programmers and ongoing maintenance. They also assess potential revenue streams like software licensing fees or subscriptions.

For the  market study , they research the target market and the competitors.

Motion helps with feasibility studies

Motion is a project management tool that can boost the effectiveness and precision of your feasibility assessment.

The app can help you construct an organized timeline for your studies. With a clear timeline, you can better analyze and plot out the feasibility of the project before doing it.

‎Motion has color-coded tasks and events to track the progress of your feasibility study. It can also manage and track the progress of various tasks and subtasks in your feasibility study.

‎Motion's collaboration features can help coordinate work among team members. It can also share calendars, schedule meetings, and allocate resources for you.

It also has time-blocking features to allocate dedicated time for focused work, analysis, and research.

Sign up now for your  7-day free trial  of Motion.

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11.3 Conducting a Feasibility Analysis

Learning objectives.

By the end of this section, you will be able to:

• Describe the purpose of a feasibility analysis
• Describe and develop the parts of a feasibility analysis
• Understand how to apply feasibility outcomes to a new venture

As the name suggests, a feasibility analysis is designed to assess whether your entrepreneurial endeavor is, in fact, feasible or possible. By evaluating your management team, assessing the market for your concept, estimating financial viability, and identifying potential pitfalls, you can make an informed choice about the achievability of your entrepreneurial endeavor. A feasibility analysis is largely numbers driven and can be far more in depth than a business plan (discussed in The Business Plan ). It ultimately tests the viability of an idea, a project, or a new business. A feasibility study may become the basis for the business plan, which outlines the action steps necessary to take a proposal from ideation to realization. A feasibility study allows a business to address where and how it will operate, its competition, possible hurdles, and the funding needed to begin. The business plan then provides a framework that sets out a map for following through and executing on the entrepreneurial vision.

Organizational Feasibility Analysis

Organizational feasibility aims to assess the prowess of management and sufficiency of resources to bring a product or idea to market Figure 11.12 . The company should evaluate the ability of its management team on areas of interest and execution. Typical measures of management prowess include assessing the founders’ passion for the business idea along with industry expertise, educational background, and professional experience. Founders should be honest in their self-assessment of ranking these areas.

Resource sufficiency pertains to nonfinancial resources that the venture will need to move forward successfully and aims to assess whether an entrepreneur has a sufficient amount of such resources. The organization should critically rank its abilities in six to twelve types of such critical nonfinancial resources, such as availability of office space, quality of the labor pool, possibility of obtaining intellectual property protections (if applicable), willingness of high-quality employees to join the company, and likelihood of forming favorable strategic partnerships. If the analysis reveals that critical resources are lacking, the venture may not be possible as currently planned. 46

Financial Feasibility Analysis

A financial analysis seeks to project revenue and expenses (forecasts come later in the full business plan); project a financial narrative; and estimate project costs, valuations, and cash flow projections Figure 11.13 .

The financial analysis may typically include these items:

• A twelve-month profit and loss projection
• A three- or four-year profit-and-loss projection
• A cash-flow projection
• A projected balance sheet
• A breakeven calculation

The financial analysis should estimate the sales or revenue that you expect the business to generate. A number of different formulas and methods are available for calculating sales estimates. You can use industry or association data to estimate the sales of your potential new business. You can search for similar businesses in similar locations to gauge how your business might perform compared with similar performances by competitors. One commonly used equation for a sales model multiplies the number of target customers by the average revenue per customer to establish a sales projection:

Another critical part of planning for new business owners is to understand the breakeven point , which is the level of operations that results in exactly enough revenue to cover costs (see Entrepreneurial Finance and Accounting for an in-depth discussion on calculating breakeven points and the breakdown of cost types). It yields neither a profit nor a loss. To calculate the breakeven point, you must first understand the two types of costs: fixed and variable. Fixed costs are expenses that do not vary based on the amount of sales. Rent is one example, but most of a business’s other costs operate in this manner as well. While some costs vary from month to month, costs are described as variable only if they will increase if the company sells even one more item. Costs such as insurance, wages, and office supplies are typically considered fixed costs. Variable costs fluctuate with the level of sales revenue and include items such as raw materials, purchases to be sold, and direct labor. With this information, you can calculate your breakeven point—the sales level at which your business has neither a profit nor a loss. 47 Projections should be more than just numbers: include an explanation of the underlying assumptions used to estimate the venture’s income and expenses.

Projected cash flow outlines preliminary expenses, operating expenses, and reserves—in essence, how much you need before starting your company. You want to determine when you expect to receive cash and when you have to write a check for expenses. Your cash flow is designed to show if your working capital is adequate. A balance sheet shows assets and liabilities, necessary for reporting and financial management. When liabilities are subtracted from assets, the remainder is owners’ equity. The financial concepts and statements introduced here are discussed fully in Entrepreneurial Finance and Accounting .

Market Feasibility Analysis

A market analysis enables you to define competitors and quantify target customers and/or users in the market within your chosen industry by analyzing the overall interest in the product or service within the industry by its target market Figure 11.14 . You can define a market in terms of size, structure, growth prospects, trends, and sales potential. This information allows you to better position your company in competing for market share. After you’ve determined the overall size of the market, you can define your target market, which leads to a total available market (TAM) , that is, the number of potential users within your business’s sphere of influence. This market can be segmented by geography, customer attributes, or product-oriented segments. From the TAM, you can further distill the portion of that target market that will be attracted to your business. This market segment is known as a serviceable available market (SAM) .

Projecting market share can be a subjective estimate, based not only on an analysis of the market but also on pricing, promotional, and distribution strategies. As is the case for revenue, you will have a number of different forecasts and tools available at your disposal. Other items you may include in a market analysis are a complete competitive review, historical market performance, changes to supply and demand, and projected growth in demand over time.

Are You Ready?

You’ve been hired by a leading hotel chain to determine the market and financial potential for the development of a mixed-use property that will include a full-service hotel in downtown Orlando, located at 425 East Central Boulevard, in Orlando, Florida. The specific address is important so you can pinpoint existing competitors and overall suitability of the site. Using the information given, conduct a market analysis that can be part of a larger feasibility study.

Work It Out

Location feasibility.

You’re considering opening a boutique clothing store in downtown Atlanta. You’ve read news reports about how downtown Atlanta and the city itself are growing and undergoing changes from previous decades. With new development taking place there, you’re not sure whether such a venture is viable. Outline what steps you would need to take to conduct a feasibility study to determine whether downtown Atlanta is the right location for your planned clothing store.

Applying Feasibility Outcomes

After conducting a feasibility analysis, you must determine whether to proceed with the venture. One technique that is commonly used in project management is known as a go-or-no-go decision . This tool allows a team to decide if criteria have been met to move forward on a project. Criteria on which to base a decision are established and tracked over time. You can develop criteria for each section of the feasibility analysis to determine whether to proceed and evaluate those criteria as either “go” or “no go,” using that assessment to make a final determination of the overall concept feasibility. Determine whether you are comfortable proceeding with the present management team, whether you can “go” forward with existing nonfinancial resources, whether the projected financial outlook is worth proceeding, and make a determination on the market and industry. If satisfied that enough “go” criteria are met, you would likely then proceed to developing your strategy in the form of a business plan.

What Can You Do?

Love beyond walls.

When Terence Lester saw a homeless man living behind an abandoned, dilapidated building, he asked the man if he could take him to a shelter. The man scoffed, replying that Lester should sleep in a shelter. So he did—and he saw the problem through the homeless man’s perspective. The shelter was crowded and smelly. You couldn’t get much sleep, because others would try to steal your meager belongings. The dilapidated building provided isolation away from others, but quiet and security in its own way that the shelter could not. This experience led Lester to voluntarily live as a homeless person for a few weeks. His journey led him to create Love Beyond Walls (www.lovebeyondwalls.org), an organization that aids the homeless, among other causes. Lester didn’t conduct a formal feasibility study, but he did so informally by walking in his intended customers’ shoes—literally. A feasibility study of homelessness in a particular area could yield surprising findings that might lead to social entrepreneurial pursuits.

• What is a social cause you think could benefit from a formal feasibility study around a potential entrepreneurial solution?
• 46 Ulrich Kaiser. “A primer in Entrepreneurship – Chapter 3 Feasibility analysis” University of Zurich Institute for Strategy and Business Economics . n.d. https://docplayer.net/7775267-A-primer-in-entrepreneurship-chapter-3-feasibility-analysis.html
• 47 In a preliminary financial model and business plan, startup costs should be allocated, as they are intended for one-time investments in development; pre-launch costs and other necessary expenses will not carry over once the product/solution has launched.

This book may not be used in the training of large language models or otherwise be ingested into large language models or generative AI offerings without OpenStax's permission.

Want to cite, share, or modify this book? This book uses the Creative Commons Attribution License and you must attribute OpenStax.

Access for free at https://openstax.org/books/entrepreneurship/pages/1-introduction

• Authors: Michael Laverty, Chris Littel
• Publisher/website: OpenStax
• Book title: Entrepreneurship
• Publication date: Jan 16, 2020
• Location: Houston, Texas
• Book URL: https://openstax.org/books/entrepreneurship/pages/1-introduction
• Section URL: https://openstax.org/books/entrepreneurship/pages/11-3-conducting-a-feasibility-analysis

© Jun 26, 2024 OpenStax. Textbook content produced by OpenStax is licensed under a Creative Commons Attribution License . The OpenStax name, OpenStax logo, OpenStax book covers, OpenStax CNX name, and OpenStax CNX logo are not subject to the Creative Commons license and may not be reproduced without the prior and express written consent of Rice University.

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Project Management

Mastering project viability: 7-step guide to a flawless feasibility study.

December 30, 2023

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Coming up with a groundbreaking project idea that could skyrocket your company’s success is thrilling! But before diving headfirst into making it a reality, it’s crucial to pause and assess its feasibility . Can this project really succeed? Do you have the necessary tools and resources? Will the results be worth the investment? 

Enter feasibility study—the key to answering these critical questions and shaping the destiny of your project. 

In this article, we’re delving deep into the world of feasibility studies. We’ll equip you with everything you need to know about conducting a feasibility study and determining whether your project has what it takes to flourish. 🌷

What is a Feasibility Study?

What are the benefits of a feasibility study, types of feasibility studies, step 1: do the preliminary analysis, step 2: make a project scope outline, step 3: prepare a projected income statement, step 4: perform market research, step 5: create an opening-day balance sheet, step 6: review and analyze all data, step 7: reach a go or no-go decision.

A feasibility study examines if a proposed project is doable and evaluates its chances of success. While doing this study, you should pinpoint project goals , delve into market research , and outline the necessary resources and budget for successful project execution. 

After the study, the decision-making executives or investors determine whether the project should get the green light based on the feasibility analysis. ✅

The importance of a feasibility study lies in the following:

• Establishing whether a company, team, or organization can fulfill its promises within a reasonable timeframe
• Stopping a company from taking on risky projects 
• Providing details on the company’s operations, potential challenges, competitors, and funding sources, along with their allocation

A feasibility study evaluates if your project or product is viable and has the potential to succeed. The main benefits of having a feasibility study report include:

• Risk assessment: It helps identify potential risks and challenges that may arise during project implementation so you can mitigate them in due time
• Cost evaluation: It aids in determining if the project is financially viable and if the potential ROI justifies the expenses
• Resource allocation: It assists in determining the necessary resources —human, financial, and technological—required for the project, helping in effective resource allocation and management
• Market analysis: Feasibility studies help you understand the demand, competition, and potential customer base through market research, shaping the product to fit market needs
• Decision-making: The insights gained from a feasibility study help stakeholders make informed decisions about whether to proceed with the project, modify it, or abandon it altogether
• Legal and regulatory compliance: It helps ensure that the project complies with laws and regulations, minimizing potential legal issues in the future

Conducting various feasibility studies allows you to evaluate your project from diverse angles and perspectives. Feasibility studies can be broadly categorized into several types based on the focus of the assessment:

• Technical feasibility: Evaluates if the proposed project can be implemented from a technical standpoint. It assesses the availability of technology, expertise, and infrastructure required
• Economic feasibility: Analyzes the cost-effectiveness of the project. It estimates potential costs, returns on investment , and the overall financial viability
• Legal feasibility: Examines legal aspects like compliance with laws, regulations, permits, and any potential legal hurdles
• Operational feasibility: Evaluates if the project can meet the organization’s needs and to what extent 
• Scheduling feasibility: Digs into the project’s timeframe , assessing if it can be completed within a reasonable and acceptable time 
• Market feasibility: Focuses on understanding the market demand, competition, and potential customers suitable for the project’s products or services

How to Conduct a Feasibility Study in 7 Easy Steps

For a successful feasibility study, following the correct steps and ensuring every aspect is thoroughly analyzed is vital. We’re here to guide you through seven simple steps to assess feasibility , ensuring your project is fully prepared for its long-anticipated launch. Let’s take a look!

Running a full feasibility study can eat up time and technical resources. Instead of diving straight into the assessment, try dipping your toes in first by doing a preliminary analysis. Think of it like a test before the big test. 🤓

Here are four simple steps for this initial check :

• Start by laying out what you want from this project and why it matters to your team or business
• Look for similar projects out there and see if they’ve been successful
• Figure out what sets your idea apart—maybe it’s your team, the location, or the technology you use
• Determine the risks by listing out the things that could go wrong

Once you’ve done this check, you’ll better understand whether it’s worth digging deeper into the project’s feasibility. 

To gather and easily share all this information, you can rely on ClickUp —a one-stop shop for all your business and project needs! 

ClickUp Docs feature is excellent for collecting information in a single document so everything is accessible to all your team members. You can write, edit, leave comments, and collaborate in Docs in real-time. 

Need to assign tasks or tag teammates? You can do it in Docs with ease! Plus, you can jazz up your documents with tables and subsections to ensure all data is presented in a structured manner. 🎺

You can also effortlessly create dedicated subpages for each preliminary analysis stage, ensuring streamlined organization of all data. On top of this, you can create easily shareable links and manage permissions efficiently for your team members and stakeholders.

If starting a feasibility report from scratch seems daunting, leverage the ClickUp Project Outline Template ! It breaks things down into steps so you don’t miss a beat. 🥁

It has separate pages for:

• Project timeline
• Budget and investments
• Constraints and assumptions 

Like all ClickUp Docs, the template is fully customizable , so feel free to rename pages or create new ones to match your feasibility analysis needs. 

To determine your project’s impact, you have to nail down what the project is all about. That means getting a clear idea of its goals, tasks, costs, and deadlines . Plus, you’ll have to identify everyone involved, from stakeholders to clients and customers. 

When it’s brainstorming time , nothing beats a good old whiteboard. It’s your canvas for creativity, color-coded organization, and ensuring everyone’s on the same page. But if you’re operating with remote or hybrid teams , the ClickUp Project Scope Whiteboard Template is the perfect solution! ✨

This template has all the benefits of a physical whiteboard but goes the extra mile with additional features, making it a more versatile tool. It includes seven components—information, justification, scope, business objectives, deliverables, exclusions, and assumptions. 

You have the freedom to customize it by:

• Adding or removing sticky notes
• Including text, links, files, photos, and drawings 
• Sharing it for seamless collaboration 🤝

This ClickUp Whiteboard is a great starting point for organizing your project and brainstorming its key elements. Plus, you can personalize it by adding, erasing, or renaming elements as needed.

Crafting a projected income statement is like looking into your business’s crystal ball for the upcoming year. It tells you all about the estimated revenue and expenses, serving as a vital tool for informed business decisions. Factors shaping this statement include:

• Services provided
• Service fees
• Service volume
• Revenue adjustments

Create a personalized income statement effortlessly with the ClickUp General Ledger Template ! Think of this handy tool as your financial assistant. It easily manages your income statement and your company’s entire financial records, staying on as a powerful sidekick even after your project passes the feasibility analysis! 💪

This template comes with Custom Fields tailor-made to capture every nitty-gritty transaction detail, including transaction dates, receipts, and entry numbers.

After recording transactions, leverage the document’s four main views to generate diverse financial statements:

• Profit & Loss Board view : Provides a financial scoreboard and helps you visualize revenues, expenses, and profits from recorded transactions. It lets you easily track and reclassify items by dragging them across the board
• Balance Sheets Board view : Maps out your assets, liabilities, and equity in one neat ClickUp Dashboard , making sure your financial ship stays on course
• General Ledger and Transaction List views : Allows day-to-day transaction tracking grouped by account title or other parameters

With the template’s comprehensive financial overview, every detail will be accounted for. This gives you the confidence to make accurate financial decisions and successfully navigate the feasibility analysis for your project.

Market research is crucial for understanding what your potential customers want and need , helping you understand whether there’s a market for your product or service. It also lets you size up your competition and determine the best way to position your business for success. 🎉

There are different ways to do market research; one popular method is sending a market survey. ClickUp AI makes creating market research surveys a breeze! Take advantage of its quick, generative power to craft surveys tailored to your brand and audience in the blink of an eye. 

All you need to do is ask the right questions and target the desired audience. Then, leave it to the AI assistant to generate significant trends , preferences, and opinions that will shape your business decisions .

Speaking of AI, you can also conduct speedy market research with the ClickUp ChatGPT Prompts For Market Research And Analysis Template ! This handy tool offers hundreds of AI prompts to generate content useful for analyzing market trends and preferences. 

Let’s say you need information on the latest industry trends for your marketing strategy. Try the prompt: Can you provide a report on market trends and predictions for [insert name] industry to inform our business strategy? And you’ll get the results you were looking for in a jiff! ⚡

To make sure you cover all the steps in your research and nothing slips through the cracks, leverage the ClickUp Market Research Template as your personal task list .

This Task template guides you through the intricacies of research, encompassing your methodology, data collection methods, and the invaluable findings acquired from existing or prospective customers using Custom Fields.

Within this template, every task is accompanied by a subtask list, enabling you to closely monitor each research step. These tasks include critical actions like defining research scopes and assembling a proficient research team. 🕵🏼‍♂️

Assignees can easily oversee the progress of each subtask by employing Custom Statuses like Open, Under Review, or Closed, streamlining the monitoring process.

One of the smartest ways to collect all your assets, liabilities, and equity is by starting with an opening-day balance sheet. It’s like a snapshot of where your company stands regarding finances and assets when you’re launching a new project or business venture.

First, input all the assets you’ll need to run your operations smoothly. This includes cash for day-to-day expenses, inventory, equipment, property—all the essentials. Next, list liabilities like loans and leases and how much you’ll need to invest. It may take time, but having these details puts you on the right financial track. 

Want to skip the hassle of crafting your balance sheet? The ClickUp Balance Sheet Sample Template has your back! It comes loaded with ready-made tables and fields you can tweak with your financial specifics, and voila—your balance sheet is good to go! 👌

This Doc template comes with dedicated tables for:

• Financial assets
• Non-financial assets
• Liabilities

Feel free to add more rows and columns to fit your business needs and share the document with the whole team for an easy financial rundown. 

Now, take a breather and reflect on your plan again. Checking and analyzing things ensures everything’s on track and there’s no need for further customization. 

Cross-check the data against its original sources and flag any inconsistencies . The whole point of a feasibility study is to help you make better decisions, so the data you collect needs to back up those choices. 

You should review the feasibility study by considering both the upsides and downsides of the project. When it comes to the finances, leave no stone unturned—document all the assumptions. 

During this stage, it’s crucial to pinpoint potential risks and have mitigation strategies to tackle them. This can make or break your project feasibility—if the risks involved are worth the reward, your project may get the green light. Otherwise, you may want to reconsider your business idea.

Visualize your project’s risk landscape using the ClickUp Risk Analysis Whiteboard Template ! Pinpoint the probability and severity of each risk from your feasibility study by placing sticky notes on the color-coded Whiteboard map.

When the probability and severity of a potential risk rank as High or Serious, it might signal a need to rethink your approach or brainstorm solutions with your team. Conversely, if most risks fall into the Medium/Low category , your project stands a better chance of getting the thumbs-up. 👍

Congrats, you’ve reached the exciting moment of deciding whether the project will get the green light! 

Before taking the plunge, it’s up to relevant clients or stakeholders to decide whether the project is worth their time, effort, and money and if it syncs up with the organization’s big-picture goals. 🖼️

To wrap up and pitch your feasibility study, grab the ClickUp Feasibility Study Executive Summary Template . Leverage its pre-designed layout to provide: 

• Project Overview
• Focused Issue
• Proposed Solution 

Then, dive into the Project Highlights —impress the stakeholders by summarizing crucial findings like market analysis and project strengths and rely on charts and graphs for that visual punch. 👊

Use the provided tables to note resources, timelines, and other success strategies. Finally, don’t forget the financial forecast —charts and graphs also come in handy here, as they will paint a more vivid picture of the project’s value for money. 

Presenting all this information in a slick, structured way will help stakeholders wrap their heads around your idea, making their decision-making journey much smoother.

Conduct a Feasibility Study Effortlessly with ClickUp

Running a comprehensive feasibility study doesn’t happen in a flash. But navigating it becomes much more relaxed when you stick to the seven key steps we’ve laid out and use the appropriate project management tools.

For a seamless journey through your analysis objectives, sign up for a free ClickUp account today ! This powerful tool not only aids in every step of the feasibility study but also serves as an all-in-one project management wizard !

Once your project gets the green light, you’ll love using ClickUp’s treasure trove of project management tools , a library of 1,000+ templates , and numerous collaboration tools to stay on top of your project like a pro! 😎

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What is a Market Feasibility Study?

Fahad Usmani, PMP

May 19, 2024

A market feasibility analysis is a part of a feasibility study that analyzes the market to determine whether there is sufficient demand for your product or service. It involves evaluating various factors (e.g., market size, growth potential, competition, target audience, and regulatory environment). 

By gathering and analyzing relevant data, businesses can make informed decisions about the feasibility of their proposed endeavor.

In a market feasibility study, you can ask the following questions:

• Who are my competitors?
• What is driving the demand?
• What is the supply chain for the intended product?
• How will you set the price for your product?
• What pricing model will you adopt?
• Will the model be flexible or rigid? 
• What are the effects of the exchange rate, inflation, demographics, population increase, and urban-rural migration on price forecast?
• Is the price dependent on an international benchmark (e.g., crude oil)?
• What is the market history?
• What is the market forecast?

Elements of Market Feasibility Analysis

A market feasibility study has the following key elements:

• Understanding the Requirements: Prepare the list of key stakeholders and group the clients. If the client is the general public, then group them to collect their requirements. This exercise will ensure that businesses understand the requirements and that they will get approval for their ideas because it already includes the stakeholders’ and clients’ concerns.
• Trend Analysis: Businesses must understand the market trend before launching any product or service. For example, if the market is saturated, then there is no point in launching a similar product or service, as it will only waste resources. This analysis can help businesses find gaps in requirements, market demographics, spending habits, consumption patterns, etc.
• Competitor Analysis: This is the key component of market feasibility analysis. If the business intends to penetrate an existing or saturated market, this analysis provides information to take the necessary actions. Businesses can identify the gaps between the competitor and their product and improve their offering.

Importance of Market Feasibility Studies

• Risk Management: Conducting a market feasibility study can help identify risks and challenges early, thus allowing businesses to manage them before investing their time and resources.
• Understanding Market Demand: By studying consumer preferences, behaviors, and trends, businesses can gain a deeper understanding of market demand. This insight will allow them to tailor their offerings to effectively meet their audience’s needs.
• Resource Allocation: A market feasibility study provides valuable data that can guide resource allocation decisions. Accurate market insights are essential for efficient resource management, whether it involves determining the optimal marketing channels or forecasting sales projections.
• Attracting Investors: Investors are more likely to support a proposal that has undergone market analysis. A robust feasibility study shows that the business has researched the market and understands the business opportunity, which fills investors with confidence.

How to Conduct a Market Feasibility Study

You can follow these steps to conduct your market feasibility study:

• Define the Objective: Define the objectives of your market feasibility study. Are you assessing the viability of a new product, entering a new market, or expanding an existing business?
• Gather Data: Collect relevant data through primary and secondary research methods. Primary research involves gathering firsthand information through surveys, interviews, or focus groups, while secondary research involves analyzing existing data from sources (e.g., industry reports, market studies, and government publications).
• Conduct Market Analysis: Analyze the target market’s size, growth potential, and dynamics. Identify trends, demographics, and consumer preferences that may impact your business.
• Conduct Competitive Analysis: Assess the competitive landscape by identifying direct and indirect competitors. Analyze their strengths and weaknesses, then evaluate their market position and strategies.
• Determine Your Target Audience: Define your target audience and understand their needs, preferences, and purchasing behaviors. This information will help you tailor your marketing strategies and product offerings to effectively engage and attract customers.
• Develop Financial Projections: Based on your market research findings, develop realistic financial projections. This includes estimating sales volumes, pricing strategies, revenue forecasts, and cost projections to assess your endeavor’s potential profitability.

Launching a new product or service in a market is costly and requires a lot of effort. Therefore, conducting a market feasibility study is vital before entering the market. This analysis assesses your endeavor’s viability in the market and provides insights that can shape your business strategy and increase your chances of success.

I am Mohammad Fahad Usmani, B.E. PMP, PMI-RMP. I have been blogging on project management topics since 2011. To date, thousands of professionals have passed the PMP exam using my resources.

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What Is a Feasibility Study?

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

Lara Antal / Investopedia

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, the latter in the case of a nonprofit project.

The feasibility study might include a cash flow analysis, measuring the level of cash generated from revenue vs. 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, as well as 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 $24 billion to $42 billion. The revenue generated from the high-speed rail system was estimated to be $160 million to $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 need 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.

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 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, and 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 (Page 3 of PDF).

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What Is a Feasibility Study? How to Conduct One for Your Project

Why is a feasibility study so important in project management? For one, the feasibility study or feasibility analysis is the foundation upon which your project plan resides. That’s because the feasibility analysis determines the viability of your project. Now that you know the importance, read on to learn what you need to know about feasibility studies.

What Is a Feasibility Study?

A feasibility study is simply an assessment of the practicality of a proposed project plan or method. This is done by analyzing technical, economic, legal, operational and time feasibility factors. Just as the name implies, you’re asking, “Is this feasible?” For example, do you have or can you create the technology that accomplishes what you propose? Do you have the people, tools and resources necessary? And, will the project get you the ROI you expect?

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Feasibility study template

Use this free Feasibility Study Template for Word to manage your projects better.

What’s the Importance of a Feasibility Study?

A project feasibility study should be done during the project management life cycle after the business case has been completed. So, that’s the “what” and the “when” but how about the “why?” Why is it important to conduct a feasibility study?

An effective feasibility study points a project in the right direction by helping decision-makers have a holistic view of the potential benefits, disadvantages, barriers and constraints that could affect its outcome. The main purpose of a feasibility study is to determine whether the project can be not only viable but also beneficial from a technical, financial, legal and market standpoint.

What Is Included in a Feasibility Study Report?

The findings of your project feasibility study are compiled in a feasibility report that usually includes the following elements.

• Executive summary
• Description of product/service
• Technology considerations
• Product/service marketplace
• Marketing strategy
• Organization/staffing
• Financial projections
• Findings and recommendations

Free Feasibility Study Template

Use this free feasibility study template for Word to begin your own feasibility study. It has all the fundamental sections for you to get started, and it’s flexible enough to adapt to your specific needs. Download yours today.

Types of Feasibility Study

There are many things to consider when determining project feasibility, and there are different types of feasibility studies you might conduct to assess your project from different perspectives.

Pre-Feasibility Study

A pre-feasibility study, as its name suggests, it’s a process that’s undertaken before the feasibility study. It involves decision-makers and subject matter experts who will prioritize different project ideas or approaches to quickly determine whether the project has fundamental technical, financial, operational or any other evident flaws. If the project proposal is sound, a proper feasibility study will follow.

Technical Feasibility Study

A technical feasibility study consists in determining if your organization has the technical resources and expertise to meet the project requirements . A technical study focuses on assessing whether your organization has the necessary capabilities that are needed to execute a project, such as the production capacity, facility needs, raw materials, supply chain and other inputs. In addition to these production inputs, you should also consider other factors such as regulatory compliance requirements or standards for your products or services.

Economic Feasibility Study

Also called financial feasibility study, this type of study allows you to determine whether a project is financially feasible. Economic feasibility studies require the following steps:

• Before you can start your project, you’ll need to determine the seed capital, working capital and any other capital requirements, such as contingency capital. To do this, you’ll need to estimate what types of resources will be needed for the execution of your project, such as raw materials, equipment and labor.
• Once you’ve determined what project resources are needed, you should use a cost breakdown structure to identify all your project costs.
• Identify potential sources of funding such as loans or investments from angel investors or venture capitalists.
• Estimate the expected revenue, profit margin and return on investment of your project by conducting a cost-benefit analysis , or by using business forecasting techniques such as linear programming to estimate different future outcomes under different levels of production, demand and sales.
• Estimate your project’s break-even point.
• Conduct a financial benchmark analysis with industrial averages and specific competitors in your industry.
• Use pro forma cash flow statements, financial statements, balance sheets and other financial projection documents.

Legal Feasibility Study

Your project must meet legal requirements including laws and regulations that apply to all activities and deliverables in your project scope . In addition, think about the most favorable legal structure for your organization and its investors. Each business legal structure has advantages and disadvantages when it comes to liability for business owners, such as limited liability companies (LLCs) or corporations, which reduce the liability for each business partner.

Market Feasibility Study

A market feasibility study determines whether your project has the potential to succeed in the market. To do so, you’ll need to analyze the following factors:

• Industry overview: Assess your industry, such as year-over-year growth, identify key direct and indirect competitors, availability of supplies and any other trends that might affect the future of the industry and your project.
• SWOT analysis: A SWOT analysis allows organizations to determine how competitive an organization can be by examining its strengths, weaknesses and the opportunities and threats of the market. Strengths are the operational capabilities or competitive advantages that allow an organization to outperform its competitors such as lower costs, faster production or intellectual property. Weaknesses are areas where your business might be outperformed by competitors. Opportunities are external, such as an underserved market, an increased demand for your products or favorable economic conditions. Threats are also external factors that might affect your ability to do well in the market such as new competitors, substitute products and new technologies.
• Market research: The main purpose of market research is to determine whether it’s possible for your organization to enter the market or if there are barriers to entry or constraints that might affect your ability to compete. Consider variables such as pricing, your unique value proposition, customer demand, new technologies, market trends and any other factors that affect how your business will serve your customers. Use market research techniques to identify your target market, create buyer personas, assess the competitiveness of your niche and gauge customer demand, among other things.

7 Steps to Do a Feasibility Study

If you’re ready to do your own feasibility study, follow these 7 steps. You can use this free feasibility study template to help you get started.

1. Conduct a Preliminary Analysis

Begin by outlining your project plan . You should focus on an unserved need, a market where the demand is greater than the supply and whether the product or service has a distinct advantage. Then, determine if the feasibility factors are too high to clear (i.e. too expensive, unable to effectively market, etc.).

2. Prepare a Projected Income Statement

This step requires working backward. Start with what you expect the income from the project to be and then what project funding is needed to achieve that goal. This is the foundation of an income statement. Factor in what services are required and how much they’ll cost and any adjustments to revenues, such as reimbursements, etc.

Related: Free Project Management Templates

3. Conduct a Market Survey or Perform Market Research

This step is key to the success of your feasibility study, so make your market analysis as thorough as possible. It’s so important that if your organization doesn’t have the resources to do a proper one, then it is advantageous to hire an outside firm to do so.

Market research will give you the clearest picture of the revenues and return on investment you can realistically expect from the project. Some things to consider are the geographic influence on the market, demographics, analyzing competitors, the value of the market and what your share will be and if the market is open to expansion (that is, in response to your offer).

4. Plan Business Organization and Operations

Once the groundwork of the previous steps has been laid, it’s time to set up the organization and operations of the planned project to meet its technical, operational, economic and legal feasibility factors. This isn’t a superficial, broad-stroke endeavor. It should be thorough and include start-up costs, fixed investments and operating costs. These costs address things such as equipment, merchandising methods, real estate, personnel, supply availability, overhead, etc.

5. Prepare an Opening Day Balance Sheet

This includes an estimate of the assets and liabilities, one that should be as accurate as possible. To do this, create a list that includes items, sources, costs and available financing. Liabilities to consider are such things as leasing or purchasing land, buildings and equipment, financing for assets and accounts receivables.

6. Review and Analyze All Data

All of these steps are important, but the review and analysis are especially important to ensure that everything is as it should be and that nothing requires changing or tweaking. Take a moment to look over your work one last time.

Reexamine your previous steps, such as the income statement, and compare them with your expenses and liabilities. Is it still realistic? This is also the time to think about risk and come up with any contingency plans .

7. Make a Go/No-Go Decision

You’re now at the point to make a decision about whether or not the project is feasible. That sounds simple, but all the previous steps lead to this decision-making moment. A couple of other things to consider before making that binary choice are whether the commitment is worth the time, effort and money and whether it aligns with the organization’s strategic goals and long-term aspirations.

Feasibility Study Examples

Here are some simple feasibility study examples so you have a better idea of what a feasibility study is used for in different industries.

Construction Feasibility Study

For this construction feasibility study example, let’s imagine a large construction company that’s interested in starting a new project in the near future to generate profits.

• Pre-Feasibility Study: The first step is to conduct a preliminary feasibility study. It can be as simple as a meeting where decision-makers will prioritize projects and discuss different project ideas to determine which poses a bigger financial benefit for the organization.
• Technical Feasibility Study: Now it’s time to estimate what resources are needed to execute the construction project, such as raw materials, equipment and labor. If there’s work that can’t be executed by the company with its current resources, a subcontractor will be hired to fill the gap.
• Economic Feasibility Study: Once the construction project management team has established what materials, equipment and labor are needed, they can estimate costs. Cost estimators use information from past projects, construction drawings and documents such as a bill of quantities to come up with an accurate cost estimate. Then, based on this estimate, a profit margin and financial forecasts will be analyzed to determine if there’s economic feasibility.
• Legal Feasibility Study: Now the company needs to identify all potential regulations, building codes and laws that might affect the project. They’ll need to ask for approval from the local government so that they can begin the construction project .
• Market Feasibility Study: Market feasibility will be determined depending on the nature of the project. For this feasibility example, let’s assume a residential construction project will be built. To gauge market potential, they’ll need to analyze variables such as the average income of the households in the city, crime rate, population density and any trends in state migration.

Manufacturing Feasibility Study

Another industry that uses feasibility studies is manufacturing. It’s a test run of the steps in the manufacturing production cycle to ensure the process is designed properly. Let’s take a look at what a manufacturing feasibility study example would look like.

• Feasibility Study: The first step is to look at various ideas and decide which is the best one to pursue. You don’t want to get started and have to stop. That’s a waste of time, money and effort. Look at what you intend to manufacture, does it fill an unserved need, is the market able to support competition and can you manufacture a quality product on time and within your budget?
• Financial Feasibility Study: Find out if your estimated income from the sale of this product is going to cover your costs, both direct and indirect costs. Work backward from the income you expect to make and the expenses you’ll spend for labor, materials and production to determine if the manufacturing of this product is financially feasible.
• Market Feasibility Study: You’ve already determined that there’s a need that’s not being served, but now it’s time to dig deeper to get realistic projections of revenue. You’ll want to define your target demographic, analyze the competitive landscape, determine the total market volume and what your market share will be and estimate what market expansion opportunities there are.
• Technical Feasibility Study: This is where you’ll explore the production , such as what resources you’ll need to produce your product. These findings will inform your financial feasibility study as well as labor, material, equipment, etc., costs have to be within your budget. You’ll also figure out the processes you’ll use to produce and deliver your product to the market, including warehousing and retail distribution.

There could be other feasibility studies you’ll have to make depending on the product and the market, but these are the essential ones that all manufacturers have to look at before they can make an educated decision as to whether to go forward or abandon the idea.

Best Practices for a Feasibility Study

• Use project management software like ProjectManager to organize your data and work efficiently and effectively
• Use templates or any data and technology that gives you leverage
• Involve the appropriate stakeholders to get their feedback
• Use market research to further your data collection
• Do your homework and ask questions to make sure your data is solid

If your project is feasible, then the real work begins. ProjectManager helps you plan more efficiently. Our online Gantt chart organizes tasks, sets deadlines, adds priority and links dependent tasks to avoid delays. But unlike other Gantt software, we calculate the critical path for you and set a baseline to measure project variance once you move into the execution phase.

Watch a Video on Feasibility Studies

There are many steps and aspects to a project feasibility study. If you want yours to be accurate and forecast correctly whether your project is doable, then you need to have a clear understanding of all its moving parts.

Jennifer Bridges, PMP, is an expert on all aspects of project management and leads this free training video to help you get a firm handle on the subject.

Here’s a screenshot for your reference!

Pro tip: When completing a feasibility study, it’s always good to have a contingency plan that you test to make sure it’s a viable alternative.

ProjectManager Improves Your Feasibility Study

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Transcription

Today we’re talking about How to Conduct A Feasibility Study, but first of all, I want to start with clarifying what a feasibility study is.

Feasibility Analysis Definition

Basically, it’s an assessment of the practicality of a proposed plan or method. Basically, we’ll want to want to know, is this feasible. Some of the questions that may generate this or we can hear people asking are, “Do we have or can we create the technology to do this? Do we have the people resource who can produce this and will we get our ROI, our Return On Investment?”

When to Do a Feasibility Study

So when do we do the feasibility study? So it’s done during a project lifecycle and it’s done after the business case because the business case outlines what we’re proposing. Is it a product or service that we’re proposing?

So why do we do this? The reason we do this is that we need to determine the factors that will make the business opportunity a success.

How to Conduct a Feasibility Study

Well, let’s talk about a few steps that we do in order to conduct the feasibility study.

Well, first of all, we conduct a preliminary analysis of what all’s involved in the business case and what we’re analyzing and what we’re trying to determine is feasible.

Then we prepare a projected income statement. We need to know what are the income streams, how are we gonna make money on this. Where’s the revenue coming from? We also need to conduct a market survey.

We need to know, is this a demand? Is there a market for this? Are customers willing to use this product or use this service?

The fourth one is to plan the business organization and operations. What is the structure, what kind of resources do we need? What kind of staffing requirements do we have?

We also want to prepare an opening day balance sheet. What are the…how again, what are the expenses, what’s the revenue and to ensure that being able to determine if we’re gonna make our ROI.

So we want to review and analyze all of the data that we have and with that, we’re going to determine, we’re going to make a go, no-go decision. Meaning, are we going to do this project or this business opportunity or not.

Well, here are some of the best practices to use during your feasibility study.

One is to use templates, tools and surveys that exist today. The great news is, data is becoming more and more prevalent. There are all kinds of technologies. There are groups that they do nothing but research. Things that we can leverage today.

We want to involve the appropriate stakeholders to ensure that input is being considered from the different people involved.

We also want to use again the market research to ensure we’re bringing in good, reliable data.

Do your homework, meaning act like is if this is your project, if it’s your money. So do your homework and do it well and make sure you give credible data.

What Is a Feasibility Report?

So ultimately in the end what we’re doing is, we’re producing and we’re providing a feasibility report. So in that report, think of this is like a template.

So what you’re gonna do is give it an executive summary of the business opportunity that you’re evaluating and the description of the product or the service.

You want to look at different technology considerations. Is it technology that you’re going to use? Are you going to build the technology?

What kind of product and service marketplace and being able again, to identify the specific market you’re going to be targeting? Also, what is the marketing strategy you’re going to use to target the marketplace?

And also what’s the organizational structure? What are the staffing requirements? What people do you need to deliver the product or service and even support it?

So also we want to know the schedule to be able to have the milestones to ensure that as we’re building things, that as we’re spending money that we’re beginning to bring in income to pay and knowing when we’re going to start recuperating some of the funding. Again, which also ties into the financial projections.

Ultimately in this report, you’re going to provide the findings and the recommendations.

Again, we’ll probably talk about technology. Are you going to build it? Are you going to buy it? What are the marketing strategies for the specific marketplace organization? You may have some recommendations for whether you’re going to insource the staff, maybe you are going to outsource some staff and what that looks like and also financial recommendation.

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Choisir Langue / Choose Language Market Research and Feasibility Studies Before committing time, energy, and resources to a new project , PMs and executives want to know: Can this project succeed? And even if the project is successful, will the outcomes justify the cost and effort it took to achieve them? These questions, and ultimately the fate of the project, can be determined through a feasibility study . So, what is a feasibility study ? In this article, we’re answering that question, and we’re also examining how to do a feasibility study to help you and your management team make better-informed decisions regarding which projects get funded and which get tabled or scrapped altogether.  What is a feasibility study? A feasibility study analyzes the practicality of a proposed project and assesses how likely the project is to succeed. Typically, feasibility studies are prepared for executives who will decide whether to greenlight the project based on the feasibility analysis. Feasibility studies identify key project goals and relevant factors, examine the market research, and detail the resources and budget needed to successfully execute the project. The seven feasibility study steps Feasibility studies should include the following steps: Preliminary analysis Just as the feasibility study determines whether a proposed project is worth the effort, the preliminary analysis determines whether the feasibility study itself is justified. The fact is that conducting a feasibility study is an intensive, time-consuming process, and the preliminary analysis will look to uncover any roadblocks that would render the feasibility study useless.  Defining the scope Before you can determine the potential impact of a project, you have to get clear on the project’s scope . This includes defining the project’s goals, tasks, phases, costs, deliverables, and deadlines. The project scope also identifies internal stakeholders as well as external clients and customers. Market research Is there a demand for this particular venture in the market it seeks to serve? This is critical information to know before committing to a project, and it’s precisely what market research seeks to answer. Market research also gives insight into the current competitive landscape and helps identify factors like geographic influence on the market, the market’s overall value, and demographics. Financial assessment Naturally, the feasibility study will break down and analyze the financial costs and risks involved with the project . Costs may include human resources, equipment, material, software, hardware, facilities, and third-party services. Additionally, the financial assessment will look at the potential impact that project failure will have on the bottom line.  Roadblocks and alternative solutions What are the potential problems and circumstances that could lead to project delays or even failure? What are some alternative solutions that would circumvent those problems? Most feasibility studies will include an assessment of these factors, too.  Reassessment  At this step, you should seek a reassessment of the entire feasibility study from top to bottom by a fellow PM, a manager, or someone else in your organization. Having a fresh set of eyes on the study will help ensure you don’t miss any key elements or miscalculate potential project impacts.  Go or no-go decision When it’s all said and done, the feasibility study comes down to one decision: Is the project approved to move forward or not? Feasibility study examples While conducting a feasibility study may sound complicated, there are actually thousands of real-world examples happening all around you all the time. It helps to understand the different kinds of feasibility studies first, which include: Technical feasibility: Whether you have the technology and knowledge of how to use it to complete your project. Legal feasibility: Whether your project meets all necessary legal requirements. Operational feasibility: Whether your project can be carried out according to your organization's capacity, resources, and operational processes.  Time feasibility: Whether your project timeline fits with the rest of your organization's schedules. Any and all of these feasibility studies can be found in real-world examples. Consider the following: A busy father is running errands and figures out whether he can complete the weekly grocery shop in between dropping his son off for chess practice and picking his daughter up from a party. He has just conducted a time feasibility analysis. A teenager is choosing a new phone to buy, and researches which model will be the most compatible with his most-used apps and platform. He has just conducted a technical feasibility analysis. The amount of detail included in your feasibility analysis depends on your organization and your chosen project. To make the most of your next feasibility analysis, let's take a look at some best practices. What are the best practices of a feasibility analysis? In order to make sure you get the most from your feasibility study, there are a few best practices you can follow. For instance, soliciting feedback from seasoned colleagues or managers can give you insight into the factors you have listed, and help you fill in elements you hadn’t considered. Additionally, you’ll want to verify the data and intel you’ve collected to make sure it’s accurate.  Another best practice is to follow a feasibility analysis template so that you don’t have to reinvent the wheel with each project. If your organization conducts projects regularly, then you can probably access a feasibility study example or template to work from.  What should be included in a feasibility report? After conducting the necessary research, performing your due diligence, and compiling all the data, it’s time to put together the feasibility report. The core elements of this analysis may vary slightly depending on the type of project you’re undertaking, but they’ll generally include: The executive summary Technological considerations and requirements Existing marketplace assessment Marketing strategy Resources and staffing Project timeline and schedule Findings and recommendations How Wrike helps you with your feasibility analysis When conducting a feasibility study, it helps to have a single, centralized source for filing and organizing all the data you collect, the analyses and impact statements you prepare, and all the other resources and references you compile in the course of the study. With Wrike, not only will you have a dedicated space for each project you undertake, but you’ll be able to share your feasibility reports easily with team members, managers, executives, and stakeholders who will weigh in on or be impacted by the project. To see all the ways in which Wrike can help you with feasibility reports and project management in your organization, start your free trial today! Jeremy McAbee Jeremy is a former contributor of Wrike. Related articles How to Spot Early Signs of Project Failure Project failure is common, but it can be avoided. Find out more about the project management risks and issues every PM should be aware of and how Wrike can help. How To Produce Effective RAID Logs With Wrike Produce a RAID log that tracks key risks, assumptions, issues, and dependencies. Successfully implement a risk and issue log for better project results. What is a risk register in project management? A risk register will help you identify multiple project risks, from data breaches to supply chain disruptions and catastrophic events. Get weekly updates in your inbox! You are now subscribed to wrike news and updates. Let us know what marketing emails you are interested in by updating your email preferences here . Sorry, this content is unavailable due to your privacy settings. To view this content, click the “Cookie Preferences” button and accept Advertising Cookies there. 16+ SAMPLE Market Feasibility Report in PDF Market feasibility report, 16+ sample market feasibility report, what is a market feasibility report, components of a market feasibility study, advantages of a market feasibility report, steps on how to make a market feasibility report, why is market feasibility report important, what are some market research techniques, what is an example of marketing strategy. 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Whether you are a healthcare professional or need to understand how to document medical… Training Report In this comprehensive guide, we will delve into the intricacies of creating an effective Training Report. Whether you are new to this process or looking to enhance your existing… browse by categories Questionnaire Description Reconciliation Certificate Spreadsheet Information privacy policy Terms & Conditions 315 IMAGES 48 Feasibility Study Examples & Templates (100% Free) ᐅ TemplateLab FREE 10+ Market Feasibility Report Samples in PDF 48 Feasibility Study Examples & Templates (100% Free) ᐅ TemplateLab Why Feasibility Studies Matter (With Examples) 48 Feasibility Study Examples & Templates (100% Free) ᐅ TemplateLab 48 Feasibility Study Examples & Templates (100% Free) ᐅ TemplateLab VIDEO Economic feasibility (example ) What is Feasibility Study? Types Technical, Operational, Financial Feasibility Hindi Urdu FEASIBILITY STUDY pre-feasibility study meaning, scope, duration, cost in hindi What is a Feasibility Study? What is Feasibility Study? COMMENTS What is a Feasibility Study and How to Conduct It? (+ Examples) 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 ... PDF MARKET AND FEASIBILITY STUDIES City councils, county commissioners, planning board members and other elected officials may use market and feasibility studies at times. For example, a planning commission may review a market and feasibility study during the approvals process. Often they will only review staff analysis of the study, but sometimes they will review the entire study. 4 Key Elements That Comprise a Market Research Feasibility Study 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: How to conduct a feasibility study: Template and examples 1. Clearly define the opportunity. Imagine your user base is facing a significant problem that your product doesn't solve. This is an opportunity. Define the opportunity clearly, support it with data, talk to your stakeholders to understand the opportunity space, and use it to define the objective. 2. How to conduct a feasibility study: Templates and examples To conduct a feasibility study, hire a trained consultant or, if you have an in-house project management office (PMO), ask if they take on this type of work. In general, here are the steps they'll take to complete this work: 1. Run a preliminary analysis. Creating a feasibility study is a time-intensive process. What Is a Marketing Feasibility Study? 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 ... Why Feasibility Studies Matter (With Examples) Two types of sales forecasting data are appropriate for feasibility studies: Quantitative forecasting uses historical business data to predict trends.; Qualitative sales forecasting data takes customers' opinions, market research, and survey results into account.; The type of feasibility study you run determines which type of data you will need. How to Conduct Market Feasibility Research Key components of a market feasibility study are market analysis, organizational/technical analysis, and financial analysis. Steps to conducting a market feasibility study include defining the purpose of the study, conducting preliminary analysis, and performing market research. Challenges in conducting a study include relying on insufficient ... Feasibility Study Blueprint: Steps, Examples, and Benefits Examples of feasibility studies. Let's explore a couple of examples to show you the power of the feasibility study. Marketing feasibility study. We will illustrate a situation where a firm plans to introduce a new type of product to the market. To assess technical feasibility, they analyze factors like software tools and hardware infrastructure. MSA Feasibility Study Resources: Market Research Resources related to conducting an MSA 699 feasibility study. Market research data is critical to determining consumer interest, demand and purchasing behavior, and helps you gauge how receptive (in general) people will be to a product or service. PDF Chapter 5: Conducting a Feasibility Study1 2. Never make a decision to proceed with a feasibility study or accept a feasibility study on negative reactions; for example, out of resentment or envy toward middlemen, money lenders, etc. 3. For group action, a few reliable and loyal persons are superior to a larger number of doubtful persons. 4. 24 Examples of a Feasibility Study A feasibility study is research, testing and experimentation designed to determine if a strategy, design, product or process is possible and practical. The following are illustrative examples. Proof of Concept. Validate some important principle, idea or design that is key to your plans. Design Feasibility. Determining if a design idea will work ... 11.3 Conducting a Feasibility Analysis Market Feasibility Analysis. A market analysis enables you to define competitors and quantify target customers and/or users in the market within your chosen industry by analyzing the overall interest in the product or service within the industry by its target market Figure 11.14. You can define a market in terms of size, structure, growth ... How to Conduct a Feasibility Study Step by Step Step 1: Do the preliminary analysis. Running a full feasibility study can eat up time and technical resources. Instead of diving straight into the assessment, try dipping your toes in first by doing a preliminary analysis. Think of it like a test before the big test. 🤓. What is a Market Feasibility Study? A market feasibility analysis is a part of a feasibility study that analyzes the market to determine whether there is sufficient demand for your product or service. It involves evaluating various factors (e.g., market size, growth potential, competition, target audience, and regulatory environment). By gathering and analyzing relevant data ... How To Write Feasibility Studies (With Tips and Examples) Here is a step-by-step guide to help you write your own feasibility study: Describe the project. Outline the potential solutions resulting from the project. List the criteria for evaluating these solutions. State which solution is most feasible for the project. Make a conclusion statement. 1. 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 ... What Is a Feasibility Study? How to Conduct One for Your Project 3. Conduct a Market Survey or Perform Market Research. This step is key to the success of your feasibility study, so make your market analysis as thorough as possible. It's so important that if your organization doesn't have the resources to do a proper one, then it is advantageous to hire an outside firm to do so. Market Research and Feasibility Studies Market Research and feasibility studies explained . Market research is the process of systematically gathering, recording and analyzing data and information about customers, competitors and the market. ... It, for example, can decide whether an order processing be carried out by a new system more efficiently than the previous one. Contents . 1 ... The 4 essential components of a market feasibility study Below are the four essential components of a market feasibility study. 1. Stakeholder In-Depth Interviews (IDIs) A great place to start a market feasibility study is to engage any associated stakeholders. As professional market researchers in Uganda, we begin this process by organizing between 8 and 12 in-depth interviews with stakeholders who ... How To Do a Feasibility Study Feasibility studies identify key project goals and relevant factors, examine the market research, and detail the resources and budget needed to successfully execute the project. The seven feasibility study steps. ... Feasibility study examples. While conducting a feasibility study may sound complicated, there are actually thousands of real ... 16+ SAMPLE Market Feasibility Report in PDF Feasibility studies are conducted to determine the viability of completing the project successfully. And market feasibility research might aid with the marketing aspect. And, because potential customers primarily determine sales and profit, a market feasibility study is much more critical. Components of a Market Feasibility Study Feasibility Study samples Chapter III Market Study. 3. Objectives of the study This part of the study aims to determine the Market feasibility of the "Craving Pot" at Purok Bayanihan, Banilad, Dumaguete City, Negros Oriental. Especially this part of the study aims to be able to: Develop good marketing strategies for the business using the 4Ps in marketing (Product, Price, Place, and Promotion). Identify the public ... essay homework paper phd project resume review study thesis