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Top 10 Economic Feasibility Templates with Samples and Examples

Sapna Singh

Dash Navigation, a California-based start-up that makes hardware and software for in-car navigation systems, stated in 2008 that it would no longer sell its Web-enabled GPS unit, Dash Express. The product and company failed due to its hefty $600 price tag. A thorough examination of the venture’s costs and advantages revealed that even when the company decreased the price to $399 or $299, the product remained too pricey. Subsequently, the business decided to license its technology to businesses producing netbooks, cell phones, in-dash navigation systems, and other items.

Download our fascinating Feasibility Study PPT Templates to make an informed decision about a business opportunity. Conduct a market-driven, cost-effective feasibility analysis.

Intangent specializes in incentive compensation, sales performance management, and revenue intelligence solutions. It reports that businesses with precise projections have a 10% higher chance of annual sales growth. Economic Feasibility is the term used to describe such evaluation of the strategy’s viability. This management tool is crucial for assessing an idea’s risks, benefits, and costs. It includes market, economic, technological, and strategic analysis.

Make a confident presentation of your feasibility report to high management. Get SlideTeam’s A-Z guide to project scope and timeframe as critical inputs for the Feasibility Report .

Analysis of the financial and performance indicators.

SlideTeam’s Economic Feasibility Templates give the critical competitive information needed to assess the viability of new markets. This blog allows you to address all your worries and determine the chances of your company’s success. These Top 10 Economic Feasibility Templates with Samples and Examples will help you decide whether a project or business is cost-effective. This will boost stakeholder trust in the project and help them understand the potential ROI. The 100% customizable nature of the templates allows you to edit your presentations. The content-ready slides give you the much-needed structure.

Use SlideTeam’s PowerPoint Templates to comprehend the project’s cost-benefit analysis to determine its viability for implementation.

Template 1: economic feasibility ppt.

Financial Feasibility illustrates the ability to fund project phases using a variety of sources. This PPT Deck describes the concept or planned action for examining the economic elements of a project. This aids in comparing the cost-benefit analysis, examining the market space, and identifying the distinctive aspects of the idea. This complete deck includes the feasibility framework, KPIs for cost-benefit assessment, supply chain economic feasibility process flow, and other tools to help you enhance your project’s success rate. Use this Presentation to guarantee that your project is a sound investment.

Download this template

Template 2: Financial and Economic Feasibility Study Framework

Use this PPT Template to plan your financial growth. This slide displays a financial and economic feasibility study framework that includes information on job scope, project initiation, environment analysis, technical analysis, financial plan, etc. This method is suitable for analyzing Feasibility and creating a solid project proposal. It has all the essential components to help you get started and is adaptable enough to meet your needs. Download yours today.

Template 3: Economic Feasibility Report to Determine Cost Benefit Assessment

This PPT Layout provides a cost-benefit analysis to determine the profitability of a project. This report includes revenue and expenditure information, net revenue calculation, and costs. This tool is helpful for stakeholders and management to assess the prospective benefits against the associated costs and make sound decisions. Use this presentation resource to make well-informed decisions and minimize risks. Get it right away!

Template 4: Supply Chain Economic Feasibility Process Flow

Supply chain management, or SCM, is the coordination of the flow of products and services among networks for value, cost, and efficiency. This Presentation Slide illustrates the economic feasibility process flow for executing a successful project in an organization. It includes information on the review case, identifying various expenses, finding advantages, calculating determinants, doing an economic evaluation, and analyzing the review. This will allow you to better manage your supply chain. Get it now!

Template 5: Techno-Economic Feasibility with Benefits and ROI

Need to determine your project's technical Feasibility? Grab this Techno-Economic Viability (TEV) study to investigate your manufacturing process's technological and economic Feasibility. It includes information on the website, native app, and hybrid app, as well as operational Feasibility, benefits, and life expectancy. This will allow for a thorough review of procedures and goods. Use this download to assess the acceptable level of risk in a project. Save it now!

Template 6: Construction Project Economic Feasibility Analysis

Use this PowerPoint Presentation as a detailed reference to construction feasibility studies. This slide depicts a site project economic feasibility evaluation that delves into significant components ranging from market studies to financial assessments. It includes information on benefits, property taxes, maintenance, illumination, net present value, profitability analysis, and more. This essential tool allows professionals to thoroughly analyze the viability of projects, reduce risks, and make well-informed decisions. Get it today!

Template 7: Economic Feasibility Dashboard Depicting Income and Unemployment Analysis

Economic indicators help assess an economy's overall health. They include data on employment, poverty, and living standards to reflect the cost of money, spending, investment, and activity levels over a large segment of the economy. This economic feasibility dashboard includes household income, unemployment rate, poverty, and status data. Use this resource to help shape government or industry policy or to plan investment. Grab it now!

Template 8: Economic Feasibility Dashboard Covering Cost Benefit Analysis

A cost-benefit analysis (CBA) determines the costs and benefits of projects or investments. This slide is an example of an economic feasibility dashboard that covers a cost-benefit analysis to ascertain a project's profitability for a company. It offers information regarding the project’s development, support expenditures, and fiscal year returns. This will enable you to decide best before beginning new projects or investing. Grab it now!

Template 9: Economic Feasibility Analysis of Construction Project Table

This PowerPoint Slide depicts a table displaying the cost-benefit analysis of the organization’s software project. This helps to determine its economic viability. It shows the project’s costs and benefits over six years. Use this Presentation to give investors a fair and complete overview of their options. Get it today!

Template 10: Cost Benefit Analysis for Economic Feasibility Evaluation

This PPT Layout offers stakeholders a systematic and objective way to compare costs and benefits. It shows a cost-benefit analysis for customer service systems to determine the Feasibility of new initiatives. It comprises costs for user workstations, server systems, secure networked printers, cable installation, etc. Download this Presentation to ensure decisions are based on sound economic principles. Get it right away!

The Scientific Tool to Rationalize Investments.

These templates are helpful tools for bringing in corporate intelligence, preventing losses, and encouraging more confident decision-making. Use SlideTeam’s PPT Templates to present data and analytical insight to help your company make strategic decisions.

PS : Determine whether the proposed project will benefit your firm in the long run. Check out SlideTeam’s Feasibility Analysis PPT Templates to focus on different aspects of proposals before deciding on a course of action.

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11.4 The Business Plan

Learning objectives.

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

• Describe the different purposes of a business plan
• Describe and develop the components of a brief business plan
• Describe and develop the components of a full business plan

Unlike the brief or lean formats introduced so far, the business plan is a formal document used for the long-range planning of a company’s operation. It typically includes background information, financial information, and a summary of the business. Investors nearly always request a formal business plan because it is an integral part of their evaluation of whether to invest in a company. Although nothing in business is permanent, a business plan typically has components that are more “set in stone” than a business model canvas , which is more commonly used as a first step in the planning process and throughout the early stages of a nascent business. A business plan is likely to describe the business and industry, market strategies, sales potential, and competitive analysis, as well as the company’s long-term goals and objectives. An in-depth formal business plan would follow at later stages after various iterations to business model canvases. The business plan usually projects financial data over a three-year period and is typically required by banks or other investors to secure funding. The business plan is a roadmap for the company to follow over multiple years.

Some entrepreneurs prefer to use the canvas process instead of the business plan, whereas others use a shorter version of the business plan, submitting it to investors after several iterations. There are also entrepreneurs who use the business plan earlier in the entrepreneurial process, either preceding or concurrently with a canvas. For instance, Chris Guillebeau has a one-page business plan template in his book The $100 Startup . 48 His version is basically an extension of a napkin sketch without the detail of a full business plan. As you progress, you can also consider a brief business plan (about two pages)—if you want to support a rapid business launch—and/or a standard business plan.

As with many aspects of entrepreneurship, there are no clear hard and fast rules to achieving entrepreneurial success. You may encounter different people who want different things (canvas, summary, full business plan), and you also have flexibility in following whatever tool works best for you. Like the canvas, the various versions of the business plan are tools that will aid you in your entrepreneurial endeavor.

Business Plan Overview

Most business plans have several distinct sections ( Figure 11.16 ). The business plan can range from a few pages to twenty-five pages or more, depending on the purpose and the intended audience. For our discussion, we’ll describe a brief business plan and a standard business plan. If you are able to successfully design a business model canvas, then you will have the structure for developing a clear business plan that you can submit for financial consideration.

Both types of business plans aim at providing a picture and roadmap to follow from conception to creation. If you opt for the brief business plan, you will focus primarily on articulating a big-picture overview of your business concept.

The full business plan is aimed at executing the vision concept, dealing with the proverbial devil in the details. Developing a full business plan will assist those of you who need a more detailed and structured roadmap, or those of you with little to no background in business. The business planning process includes the business model, a feasibility analysis, and a full business plan, which we will discuss later in this section. Next, we explore how a business plan can meet several different needs.

Purposes of a Business Plan

A business plan can serve many different purposes—some internal, others external. As we discussed previously, you can use a business plan as an internal early planning device, an extension of a napkin sketch, and as a follow-up to one of the canvas tools. A business plan can be an organizational roadmap , that is, an internal planning tool and working plan that you can apply to your business in order to reach your desired goals over the course of several years. The business plan should be written by the owners of the venture, since it forces a firsthand examination of the business operations and allows them to focus on areas that need improvement.

Refer to the business venture throughout the document. Generally speaking, a business plan should not be written in the first person.

A major external purpose for the business plan is as an investment tool that outlines financial projections, becoming a document designed to attract investors. In many instances, a business plan can complement a formal investor’s pitch. In this context, the business plan is a presentation plan, intended for an outside audience that may or may not be familiar with your industry, your business, and your competitors.

You can also use your business plan as a contingency plan by outlining some “what-if” scenarios and exploring how you might respond if these scenarios unfold. Pretty Young Professional launched in November 2010 as an online resource to guide an emerging generation of female leaders. The site focused on recent female college graduates and current students searching for professional roles and those in their first professional roles. It was founded by four friends who were coworkers at the global consultancy firm McKinsey. But after positions and equity were decided among them, fundamental differences of opinion about the direction of the business emerged between two factions, according to the cofounder and former CEO Kathryn Minshew . “I think, naively, we assumed that if we kicked the can down the road on some of those things, we’d be able to sort them out,” Minshew said. Minshew went on to found a different professional site, The Muse , and took much of the editorial team of Pretty Young Professional with her. 49 Whereas greater planning potentially could have prevented the early demise of Pretty Young Professional, a change in planning led to overnight success for Joshua Esnard and The Cut Buddy team. Esnard invented and patented the plastic hair template that he was selling online out of his Fort Lauderdale garage while working a full-time job at Broward College and running a side business. Esnard had hundreds of boxes of Cut Buddies sitting in his home when he changed his marketing plan to enlist companies specializing in making videos go viral. It worked so well that a promotional video for the product garnered 8 million views in hours. The Cut Buddy sold over 4,000 products in a few hours when Esnard only had hundreds remaining. Demand greatly exceeded his supply, so Esnard had to scramble to increase manufacturing and offered customers two-for-one deals to make up for delays. This led to selling 55,000 units, generating $700,000 in sales in 2017. 50 After appearing on Shark Tank and landing a deal with Daymond John that gave the “shark” a 20-percent equity stake in return for $300,000, The Cut Buddy has added new distribution channels to include retail sales along with online commerce. Changing one aspect of a business plan—the marketing plan—yielded success for The Cut Buddy.

Link to Learning

Watch this video of Cut Buddy’s founder, Joshua Esnard, telling his company’s story to learn more.

If you opt for the brief business plan, you will focus primarily on articulating a big-picture overview of your business concept. This version is used to interest potential investors, employees, and other stakeholders, and will include a financial summary “box,” but it must have a disclaimer, and the founder/entrepreneur may need to have the people who receive it sign a nondisclosure agreement (NDA) . The full business plan is aimed at executing the vision concept, providing supporting details, and would be required by financial institutions and others as they formally become stakeholders in the venture. Both are aimed at providing a picture and roadmap to go from conception to creation.

Types of Business Plans

The brief business plan is similar to an extended executive summary from the full business plan. This concise document provides a broad overview of your entrepreneurial concept, your team members, how and why you will execute on your plans, and why you are the ones to do so. You can think of a brief business plan as a scene setter or—since we began this chapter with a film reference—as a trailer to the full movie. The brief business plan is the commercial equivalent to a trailer for Field of Dreams , whereas the full plan is the full-length movie equivalent.

Brief Business Plan or Executive Summary

As the name implies, the brief business plan or executive summary summarizes key elements of the entire business plan, such as the business concept, financial features, and current business position. The executive summary version of the business plan is your opportunity to broadly articulate the overall concept and vision of the company for yourself, for prospective investors, and for current and future employees.

A typical executive summary is generally no longer than a page, but because the brief business plan is essentially an extended executive summary, the executive summary section is vital. This is the “ask” to an investor. You should begin by clearly stating what you are asking for in the summary.

In the business concept phase, you’ll describe the business, its product, and its markets. Describe the customer segment it serves and why your company will hold a competitive advantage. This section may align roughly with the customer segments and value-proposition segments of a canvas.

Next, highlight the important financial features, including sales, profits, cash flows, and return on investment. Like the financial portion of a feasibility analysis, the financial analysis component of a business plan may typically include items like a twelve-month profit and loss projection, a three- or four-year profit and loss projection, a cash-flow projection, a projected balance sheet, and a breakeven calculation. You can explore a feasibility study and financial projections in more depth in the formal business plan. Here, you want to focus on the big picture of your numbers and what they mean.

The current business position section can furnish relevant information about you and your team members and the company at large. This is your opportunity to tell the story of how you formed the company, to describe its legal status (form of operation), and to list the principal players. In one part of the extended executive summary, you can cover your reasons for starting the business: Here is an opportunity to clearly define the needs you think you can meet and perhaps get into the pains and gains of customers. You also can provide a summary of the overall strategic direction in which you intend to take the company. Describe the company’s mission, vision, goals and objectives, overall business model, and value proposition.

Rice University’s Student Business Plan Competition, one of the largest and overall best-regarded graduate school business-plan competitions (see Telling Your Entrepreneurial Story and Pitching the Idea ), requires an executive summary of up to five pages to apply. 51 , 52 Its suggested sections are shown in Table 11.2 .

Are You Ready?

Create a brief business plan.

Fill out a canvas of your choosing for a well-known startup: Uber, Netflix, Dropbox, Etsy, Airbnb, Bird/Lime, Warby Parker, or any of the companies featured throughout this chapter or one of your choice. Then create a brief business plan for that business. See if you can find a version of the company’s actual executive summary, business plan, or canvas. Compare and contrast your vision with what the company has articulated.

• These companies are well established but is there a component of what you charted that you would advise the company to change to ensure future viability?
• Map out a contingency plan for a “what-if” scenario if one key aspect of the company or the environment it operates in were drastically is altered?

Full Business Plan

Even full business plans can vary in length, scale, and scope. Rice University sets a ten-page cap on business plans submitted for the full competition. The IndUS Entrepreneurs , one of the largest global networks of entrepreneurs, also holds business plan competitions for students through its Tie Young Entrepreneurs program. In contrast, business plans submitted for that competition can usually be up to twenty-five pages. These are just two examples. Some components may differ slightly; common elements are typically found in a formal business plan outline. The next section will provide sample components of a full business plan for a fictional business.

Executive Summary

The executive summary should provide an overview of your business with key points and issues. Because the summary is intended to summarize the entire document, it is most helpful to write this section last, even though it comes first in sequence. The writing in this section should be especially concise. Readers should be able to understand your needs and capabilities at first glance. The section should tell the reader what you want and your “ask” should be explicitly stated in the summary.

Describe your business, its product or service, and the intended customers. Explain what will be sold, who it will be sold to, and what competitive advantages the business has. Table 11.3 shows a sample executive summary for the fictional company La Vida Lola.

Business Description

This section describes the industry, your product, and the business and success factors. It should provide a current outlook as well as future trends and developments. You also should address your company’s mission, vision, goals, and objectives. Summarize your overall strategic direction, your reasons for starting the business, a description of your products and services, your business model, and your company’s value proposition. Consider including the Standard Industrial Classification/North American Industry Classification System (SIC/NAICS) code to specify the industry and insure correct identification. The industry extends beyond where the business is located and operates, and should include national and global dynamics. Table 11.4 shows a sample business description for La Vida Lola.

Industry Analysis and Market Strategies

Here you should define your market in terms of size, structure, growth prospects, trends, and sales potential. You’ll want to include your TAM and forecast the SAM . (Both these terms are discussed in Conducting a Feasibility Analysis .) This is a place to address market segmentation strategies by geography, customer attributes, or product orientation. Describe your positioning relative to your competitors’ in terms of pricing, distribution, promotion plan, and sales potential. Table 11.5 shows an example industry analysis and market strategy for La Vida Lola.

Competitive Analysis

The competitive analysis is a statement of the business strategy as it relates to the competition. You want to be able to identify who are your major competitors and assess what are their market shares, markets served, strategies employed, and expected response to entry? You likely want to conduct a classic SWOT analysis (Strengths Weaknesses Opportunities Threats) and complete a competitive-strength grid or competitive matrix. Outline your company’s competitive strengths relative to those of the competition in regard to product, distribution, pricing, promotion, and advertising. What are your company’s competitive advantages and their likely impacts on its success? The key is to construct it properly for the relevant features/benefits (by weight, according to customers) and how the startup compares to incumbents. The competitive matrix should show clearly how and why the startup has a clear (if not currently measurable) competitive advantage. Some common features in the example include price, benefits, quality, type of features, locations, and distribution/sales. Sample templates are shown in Figure 11.17 and Figure 11.18 . A competitive analysis helps you create a marketing strategy that will identify assets or skills that your competitors are lacking so you can plan to fill those gaps, giving you a distinct competitive advantage. When creating a competitor analysis, it is important to focus on the key features and elements that matter to customers, rather than focusing too heavily on the entrepreneur’s idea and desires.

Operations and Management Plan

In this section, outline how you will manage your company. Describe its organizational structure. Here you can address the form of ownership and, if warranted, include an organizational chart/structure. Highlight the backgrounds, experiences, qualifications, areas of expertise, and roles of members of the management team. This is also the place to mention any other stakeholders, such as a board of directors or advisory board(s), and their relevant relationship to the founder, experience and value to help make the venture successful, and professional service firms providing management support, such as accounting services and legal counsel.

Table 11.6 shows a sample operations and management plan for La Vida Lola.

Marketing Plan

Here you should outline and describe an effective overall marketing strategy for your venture, providing details regarding pricing, promotion, advertising, distribution, media usage, public relations, and a digital presence. Fully describe your sales management plan and the composition of your sales force, along with a comprehensive and detailed budget for the marketing plan. Table 11.7 shows a sample marketing plan for La Vida Lola.

Financial Plan

A financial plan seeks to forecast revenue and expenses; project a financial narrative; and estimate project costs, valuations, and cash flow projections. This section should present an accurate, realistic, and achievable financial plan for your venture (see Entrepreneurial Finance and Accounting for detailed discussions about conducting these projections). Include sales forecasts and income projections, pro forma financial statements ( Building the Entrepreneurial Dream Team , a breakeven analysis, and a capital budget. Identify your possible sources of financing (discussed in Conducting a Feasibility Analysis ). Figure 11.19 shows a template of cash-flow needs for La Vida Lola.

Entrepreneur In Action

Laughing man coffee.

Hugh Jackman ( Figure 11.20 ) may best be known for portraying a comic-book superhero who used his mutant abilities to protect the world from villains. But the Wolverine actor is also working to make the planet a better place for real, not through adamantium claws but through social entrepreneurship.

A love of java jolted Jackman into action in 2009, when he traveled to Ethiopia with a Christian humanitarian group to shoot a documentary about the impact of fair-trade certification on coffee growers there. He decided to launch a business and follow in the footsteps of the late Paul Newman, another famous actor turned philanthropist via food ventures.

Jackman launched Laughing Man Coffee two years later; he sold the line to Keurig in 2015. One Laughing Man Coffee café in New York continues to operate independently, investing its proceeds into charitable programs that support better housing, health, and educational initiatives within fair-trade farming communities. 55 Although the New York location is the only café, the coffee brand is still distributed, with Keurig donating an undisclosed portion of Laughing Man proceeds to those causes (whereas Jackman donates all his profits). The company initially donated its profits to World Vision, the Christian humanitarian group Jackman accompanied in 2009. In 2017, it created the Laughing Man Foundation to be more active with its money management and distribution.

• You be the entrepreneur. If you were Jackman, would you have sold the company to Keurig? Why or why not?
• Would you have started the Laughing Man Foundation?
• What else can Jackman do to aid fair-trade practices for coffee growers?

What Can You Do?

Textbooks for change.

Founded in 2014, Textbooks for Change uses a cross-compensation model, in which one customer segment pays for a product or service, and the profit from that revenue is used to provide the same product or service to another, underserved segment. Textbooks for Change partners with student organizations to collect used college textbooks, some of which are re-sold while others are donated to students in need at underserved universities across the globe. The organization has reused or recycled 250,000 textbooks, providing 220,000 students with access through seven campus partners in East Africa. This B-corp social enterprise tackles a problem and offers a solution that is directly relevant to college students like yourself. Have you observed a problem on your college campus or other campuses that is not being served properly? Could it result in a social enterprise?

Work It Out

Franchisee set out.

A franchisee of East Coast Wings, a chain with dozens of restaurants in the United States, has decided to part ways with the chain. The new store will feature the same basic sports-bar-and-restaurant concept and serve the same basic foods: chicken wings, burgers, sandwiches, and the like. The new restaurant can’t rely on the same distributors and suppliers. A new business plan is needed.

• What steps should the new restaurant take to create a new business plan?
• Should it attempt to serve the same customers? Why or why not?

This New York Times video, “An Unlikely Business Plan,” describes entrepreneurial resurgence in Detroit, Michigan.

• 48 Chris Guillebeau. The $100 Startup: Reinvent the Way You Make a Living, Do What You Love, and Create a New Future . New York: Crown Business/Random House, 2012.
• 49 Jonathan Chan. “What These 4 Startup Case Studies Can Teach You about Failure.” Foundr.com . July 12, 2015. https://foundr.com/4-startup-case-studies-failure/
• 50 Amy Feldman. “Inventor of the Cut Buddy Paid YouTubers to Spark Sales. He Wasn’t Ready for a Video to Go Viral.” Forbes. February 15, 2017. https://www.forbes.com/sites/forbestreptalks/2017/02/15/inventor-of-the-cut-buddy-paid-youtubers-to-spark-sales-he-wasnt-ready-for-a-video-to-go-viral/#3eb540ce798a
• 51 Jennifer Post. “National Business Plan Competitions for Entrepreneurs.” Business News Daily . August 30, 2018. https://www.businessnewsdaily.com/6902-business-plan-competitions-entrepreneurs.html
• 52 “Rice Business Plan Competition, Eligibility Criteria and How to Apply.” Rice Business Plan Competition . March 2020. https://rbpc.rice.edu/sites/g/files/bxs806/f/2020%20RBPC%20Eligibility%20Criteria%20and%20How%20to%20Apply_23Oct19.pdf
• 53 “Rice Business Plan Competition, Eligibility Criteria and How to Apply.” Rice Business Plan Competition. March 2020. https://rbpc.rice.edu/sites/g/files/bxs806/f/2020%20RBPC%20Eligibility%20Criteria%20and%20How%20to%20Apply_23Oct19.pdf; Based on 2019 RBPC Competition Rules and Format April 4–6, 2019. https://rbpc.rice.edu/sites/g/files/bxs806/f/2019-RBPC-Competition-Rules%20-Format.pdf
• 54 Foodstart. http://foodstart.com
• 55 “Hugh Jackman Journey to Starting a Social Enterprise Coffee Company.” Giving Compass. April 8, 2018. https://givingcompass.org/article/hugh-jackman-journey-to-starting-a-social-enterprise-coffee-company/

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SOCIO-ECONOMIC FEASIBILITY STUDIES

These studies are actually derivatives of the Feasibility Study and are very similar in content, based on realistic indicators and estimating the feasibility of investing in some project. They often help to make decisions about how to handle a particular business idea. For example, they may answer questions about whether to continue the business operation(s) independently or to sell, rent or something else. Socio-Economic Feasibility Studies are often made for the purpose of concessions that are given from public authorities. Then, apart from the concession grantor, they are very important for the competitors as well, because their goal is to calculate the optimal amount of compensation that they can offer to the concession grantor, and which often consists of a permanent and variable part.

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A business feasibility study conducted on "Trendy Buffet"

Online shopping is a practice where the client directly buys goods or services from a seller in a real time or without an intermediary service over the internet. Trendy buffet will therefore serve as a liaison shop that will offer rental and marketing services to online businesses as it will provide them not just a physical place but will also market their product to the public. The concept of the business is to create a place where both big and small online shops are gathered together to also sell their products physically. Trendy buffet will tender services to the clients that will satisfy them by simply offering them a good working relationship, and to the customer through friendly assistance as the business has well-trained sales personnel to help them.

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Financial Feasibility Study: How to Ensure Your Business Project’s Success

JAN.19, 2023

Imagine you have a brilliant business idea that you’re convinced will be a huge success. You’ve spent countless hours researching the market, developing a solid business plan , and creating a detailed marketing strategy. But before you invest your time, energy, and money into this venture, have you ever stopped to ask yourself: “Is this idea really worth the investment?” That’s where a financial feasibility study comes in!

What is a Financial Feasibility Study?

Simply put, financial feasibility can be defined as the process of evaluating the financial aspects of a proposed project or business venture to determine its potential for success by diving deep into the nitty-gritty details of costs, revenues, market demand, and competition. It’s like a financial health checkup for your idea.

For example, let’s say you’re considering opening a new restaurant .

During the financial feasibility study, you’ll need to examine the costs of opening the restaurant, such as the cost of equipment, rent, and staff, as well as projected revenue from sales. You’ll also need to consider any potential risks, such as changes in consumer tastes or a downturn in the economy. By evaluating all these factors, you’ll be able to determine if opening the restaurant is a financially viable option.

Importance of a Financial Feasibility Study

Have you ever wondered why some businesses succeed while others fail? One of the key factors that can determine the success or failure of a business is its financial feasibility.

But why is it so important to conduct a financial feasibility study before embarking on a project?

The importance of a financial feasibility study cannot be overstated, especially any entity that is planning to undertake a project, investment or venture. This type of study is a comprehensive examination of a proposed project’s potential financial performance, including an analysis of costs and revenue. Additionally, the study would take into account factors such as the size of the market, competition, and pricing strategy to estimate the potential revenue.

The importance of a financial feasibility study report can be summarized as follows:

1. Spotting red flags

A financial feasibility study helps to identify potential financial risks and challenges associated with a proposed project, investment or venture, allowing decision-makers to take necessary measures to mitigate or avoid these risks before they become a problem, ensuring the success of the project.

2. Assessing profit potential

A financial feasibility study helps to determine the financial viability and profitability of a proposed project, investment or venture, by analyzing the costs, revenue potential, and overall financial performance. This information can help to make informed business decisions that can maximize returns and increase profitability.

3. Roadmap to success

A financial feasibility study provides a detailed financial plan and budget for a proposed project, investment or venture, which can be used as a roadmap to guide its development and implementation, ensuring that resources are allocated effectively and efficiently, leading to the success of the project.

4. Unlocking new opportunities

Financial institutions and investors often require a financial feasibility study as part of the funding application process. A well-conducted financial feasibility study can increase the chances of obtaining funding for a proposed project, investment or venture, unlocking new opportunities for growth and expansion.

By conducting a financial feasibility study, you’ll be able to determine whether your venture has what it takes to succeed. It’s a crucial tool for decision-makers, such as investors, entrepreneurs, and business owners, as it allows them to understand the financial implications of proceeding with a project.

Objectives of financial aspect in a feasibility study

The financial aspect of a feasibility study is a crucial step in determining the economic viability of a proposed project or investment. It’s like a financial roadmap that guides the decision-making process and helps stakeholders understand the potential costs and benefits of the project. The main objectives of financial aspect in feasibility study are to:

1. Project Costs

Estimation of total costs.

In order to accurately project the costs of the project, the study should include all one-time and ongoing expenses such as equipment, materials, labor, and other miscellaneous expenses. Additionally, contingencies or unexpected costs that may arise during the project should be identified and budgeted for in the cost estimation.

Consideration of contingencies and unexpected costs

Contingencies are unforeseen events that may occur during the course of the project, such as unanticipated delays, cost overruns, or changes in project scope. Unexpected costs are expenses that have not been included in the original project budget, but may arise during the project such as repairs, maintenance, or additional services required to complete the project.

The financial feasibility study should consider these costs and include a contingency budget to ensure that the project has enough financial resources to cover any unexpected or additional expenses that may occur.

2. Project Revenues

Estimation of projected revenues.

The financial feasibility study should estimate the projected revenues that the project is expected to generate. The study should also consider the potential market size, competition, pricing strategies, and any other factors that may affect the project’s revenue potential.

Analysis of revenue streams

The financial feasibility study should identify and analyze all potential revenue streams for the project such as sales of goods or services, rental income, royalties, or any other income sources. It should also evaluate the potential for future revenue growth, as well as any risks or uncertainties that may impact the project’s revenue potential.

3. Determine Profitability

Calculation of key financial metrics (npv, irr, payback period).

The financial feasibility study should calculate key financial metrics such as the net present value (NPV), internal rate of return (IRR), and payback period (PP) to determine the profitability of the project.

• Net Present Value (NPV) is a measure of the net value of an investment, taking into account the time value of money. A positive NPV indicates that the investment is expected to generate more value than it costs.
• Internal Rate of Return (IRR) is the rate of return at which the NPV of an investment is zero. A higher IRR indicates a more profitable investment.
• Payback Period (PP) is the amount of time it takes for an investment to generate enough cash flow to recover its initial cost. A shorter payback period indicates a more attractive investment.

Analysis of profitability

Net Present Value (NPV), Internal Rate of Return (IRR), and Payback Period (PP) are three important financial metrics that are used to assess the profitability of a project. 

• NPV helps to determine whether the project is expected to generate more value than it costs, 
• IRR is an indicator of how profitable the project is by measuring the rate of return, and 
• PP measures how quickly the initial investment will be recovered. 

Together, these metrics provide a comprehensive picture of the project’s profitability and help to make informed decisions about whether to proceed with the project or not.

4. Cash Flow Analysis

Projection of expected cash flow.

The financial feasibility study should project the expected cash flow generated by the project and analyze the impact on the liquidity and financial position of the company. This includes financial projection of cash inflows and outflows, and analyzing the net cash flow over time.

Analysis of impact on liquidity and financial position

The financial feasibility study should analyze the impact of the project’s cash flow on the liquidity and financial position of the company by evaluating the potential impact on the company’s ability to meet its financial obligations, such as debt repayment, and assessing the company’s overall financial health.

5. Risks and Uncertainties

Identification of potential risks and uncertainties.

The financial feasibility study should identify any potential risks or uncertainties that could impact the financial performance of the project. This includes: 

• Market risks like changes in consumer demand, competition, or economic conditions,
• Operational risks like the potential for delays, cost overruns, or technical difficulties,
• Financial risks like the potential for changes in interest rates, currency exchange rates, or credit conditions, and
• Other risks that could affect the project.

Analysis of impact on financial performance

The financial feasibility study should analyze the potential impact of risks and uncertainties on the project’s financial performance by evaluating the potential effect on costs, revenues, and profitability, as well as identifying any potential mitigation strategies or contingency plans to minimize the impact of risks and uncertainties.

Overall, the feasibility study components in the financial aspect provide a comprehensive and accurate assessment of the economic viability of the proposed project or investment.

Difference between a feasibility study and a financial model

While both financial feasibility study and financial model are important tools used in the planning and evaluation of projects and businesses, they serve distinct purposes and provide different types of information. This table compares and contrasts the key differences between a feasibility study and a financial model.

Unlock the Potential of Your Project with OGSCapital’s Proven Expertise in Financial Feasibility Studies and More

Are you ready to take your business to the next level? At OGSCapital , we understand the importance of conducting a comprehensive feasibility study in order to make informed decisions about your business ventures. That’s why our team of expert consultants has a proven track record of providing a wide range of top-notch feasibility studies that includes financial feasibility studies, hotel feasibility studies , real estate feasibility studies , and more for businesses just like yours.

But what sets us apart from the competition? It’s our dedication to understanding your business goals and objectives and tailoring our approach to meet your specific needs. We bring a wealth of experience and knowledge to the table and provide a detailed analysis of all potential costs, revenues, profitability, and risks, as well as identifying funding sources and evaluating the return on investment for stakeholders.

But our services don’t stop there. We also offer a full suite of business planning services including business plan development, business continuity planning , pitch deck preparation , buy-side due diligence services , ICO whitepaper development and ICO consulting , confidential information memorandum , and private placement memorandum .

Don’t trust your business to just anyone. Choose the proven experts at OGSCapital and let us help you unlock the potential of your project. Contact Us Today to schedule a consultation and experience the OGSCapital difference for yourself.

1. Why is financial study important in feasibility study?

A financial feasibility study is a crucial part of a feasibility study to evaluate the potential financial viability of a proposed project or venture. It includes analyzing projected revenue, expenses, return on investment and identifying financial risks. “ How to do a feasibility study ” is an exciting journey of research, analysis, and decision-making. It helps to determine if a project is worth pursuing.

2. What is the purpose of a financial feasibility study?

The purpose of an economic and financial feasibility study is to provide a comprehensive and accurate assessment of the economic viability of a proposed project or investment. Financial analysts or feasibility study consultants like us at OGSCapital use financial modeling, market research, and industry analysis to provide a detailed and accurate picture of the project’s financial viability. At OGSCapital, we offer a wide range of feasibility studies and business planning services to help clients make informed decisions and achieve their goals.

Contact us today to know more and schedule a consultation with our experts!

OGSCapital’s team has assisted thousands of entrepreneurs with top-rate business plan development, consultancy and analysis. They’ve helped thousands of SME owners secure more than $1.5 billion in funding, and they can do the same for you.

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What Is a Feasibility Study?

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

• Feasibility Study FAQs

The Bottom Line

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Feasibility Study

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

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

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

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

Key Takeaways

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

Investopedia / Lara Antal

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

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

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

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

Benefits of a Feasibility Study

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

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

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

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

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

Preliminary Analysis

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

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

Suggested Components

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

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

Examples of a Feasibility Study

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

A University Science Building

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

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

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

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

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

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

A High-Speed Rail Project

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

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

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

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

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

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

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

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

What Is the Main Objective of a Feasibility Study?

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

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

What Are the Steps in a Feasibility Study?

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

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

Who Conducts a Feasibility Study?

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

What Are the 4 Types of Feasibility?

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

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

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

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

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

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

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

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

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

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

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

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