similarities of feasibility study and business plan

10 Feasibility study and business plan differences you should know

by Naiyer Jawaid | Nov 8, 2021 | Development , Real Estate | 5 comments

Feasibility study and business plan differences are subtle. In this post we will discuss 10 differences will help you to evaluate and differentiate between a feasibility study and a business plan.

Do you know what is a feasibility report? Do you know what is a business plan? Can you easily differentiate between a feasibility report and a business plan?

It’s easy! Just read out through the article and it will all be easy.

Let’s start by learning about a feasibility report:

A feasibility study is a formal document that assist in the identification and investigation of a proposed project. We can identify the project's weaknesses and strengths with the support of a feasibility study report, which saves us time and energy. We can determine whether the suggested idea will be lucrative and practicable in the future.

Before investing in a project, it is critical to determine if the project will be beneficial in the long run. The organization also needs to know how much the project will cost. Overall, a feasibility analysis indicates whether the firm should invest or continue with the project.

similarities of feasibility study and business plan

You should also like to read When to do feasibility study?

Now let us learn about business plan:

A business plan is a formal document that contains the goals/ objective of the business, the time in which the goal will be completed and the strategies that can be adopted to reach the specific goal.

A business plan is a necessary document for every new firm to have in place before it can begin operations. Writing a credible business plan is typically a requirement for banks and venture capital companies before contemplating granting funding to new enterprises.

It is not a smart idea to operate without a business strategy. In fact, very few businesses can survive for long without one. There are many more advantages to developing and keeping to a strong business plan, such as the ability to think through ideas without investing too much money and, eventually, losing money. Business plans are used by start-ups to get off the ground and attract outside investors.

A feasibility study is used to assess if a business or a concept is viable. After the business opportunity has been identified, the business strategy is produced. “A feasibility study is carried out with the goal of determining the workability and profitability of a company venture. A feasibility study is conducted before any money is committed in a new business endeavour to see whether it is worth the time, effort, and resources.

Similarities between a Feasibility study and a business plan

It's essential to analyse the similarities between a feasibility study and a business plan because they're both implemented altogether in same ways to help you build a lucrative company. The following are some of the similarities between the two documents:

Time: Both the reports are completed before the business begins and can be repeated afterwards to decide the next stages for new concepts.

Input: Both Feasibility report and the Business plan include input from a variety of people or departments with a variety of talents.

Format: Both report formats incorporate other documents that are gathered in order to create the report.

Components: Examining the target market, market circumstances, and financial expenses are some of the topics examined.

Use: Both may be displayed to potential investors and can assist the organization's management in making choices.

Organizations uses a business plan and a feasibility study as analytical and decision-making tools.

Although the three tools can be used in conjunction with one another in decision-making processes, they each have their own strengths and weaknesses, and they appear to target and address separate processes.

You might also like to read How to write a feasibility study report?

Now let us evaluate the difference between feasibility report and a business report-

A feasibility study is conducted to determine the viability and profitability of a business endeavour. A feasibility study is conducted before any money is committed in a new business endeavour to see whether it is worth the time, effort, and resources.

A business plan, on the other hand, is created only when it has been determined that a business opportunity exists and that the endeavour is about to begin.

A feasibility report is the first step and after that a business plan is made to be implemented, without feasibility report a business plan cannot be made.
A feasibility study contains computations, research, and projected financial forecasts for a company possibility. A business plan, on the other hand, is mostly comprised of tactics and strategies to be applied to establish and expand the company.
A feasibility study is concerned with the viability of a business concept, but a business plan is concerned with the development and sustainability of a company.
A feasibility report informs the entrepreneur about the profit potential of a company concept or opportunity, whereas a business plan assists the entrepreneur in raising the necessary start-up cash from investors.
Key components of a feasibility study and a business plan
A business plan does not include the description of the sales methods used, such as distribution agreements, strategic alliances, and the amount of involvement with partners, as well as the payment terms, warranties, and other customer support.

But a feasibility report includes all the sales methods, strategies, alliances to payment and customer support.

Feasibility report contains:
Assists in cost estimation, describe the production site, required inputs, and sourcing region.
Physical description of the factory, including machine, capacity, warehouse, and supply chain, is necessary.
Indicate if the area used for production is rented or owned. This will have an impact on the financial forecast.
Information regarding the manufacturer's capacity, order details, price, and so on, if manufacturing is outsourced. To aid in cost estimation, describe the production site, needed inputs, and sourcing location.
A physical description of the factory, including machine, capacity, warehouse, and supply chain, is necessary.

But a business plan does not contain anything related to production and operations, but a business plan contains all the information related to management.

A poorly written business plan – poor projections, strategies, analysis, business model, and environmental factors, among other things – can be easily adjusted during business operations, but this cannot be said of a feasibility study because an incorrect conclusion in a feasibility study can be costly — it could mean launching a venture with little chance of survival or approving a proposal that wastes the company's human and financial resources.
A business plan presume that a company will prosper and lays out the procedures needed to get there. Those in charge of conducting a feasibility study should not have any predetermined notions regarding the likelihood of success. They must maintain as much objectivity as possible. They do research and allow the facts to lead to the study's conclusion. If the study concludes that the idea is viable, some of the findings, such as market size predictions, may be incorporated in the company's business plan.

You should also read What is land development feasibility study?

These 10 differences will help you to evaluate and differentiate between a feasibility study and a business plan.

Feasibility study may appear to be like the business plan in many respects. "A feasibility study may easily be transformed to a business plan” but it is crucial to remember that the feasibility study is completed prior to the endeavor. The business plan should be thought of in terms of growth and sustainability, whereas the feasibility study should be thought of in terms of concept viability.

This is all you need to know and understand about feasibility study and business plan.

Get ready to apply your knowledge in the real words with lots of success.

You might also like to explore below external contents on feasibility study :

What Is a Feasibility Study? – Types & Benefits
Best 8 Property Management Software
FEASIBILITY STUDIES & BUSINESS PLANS

Hope you enjoyed this post on feasibility study , let me know what you think in the comment section below.

Are you someone involved with real estate feasibility?

We are excited to launch the next generation of real estate feasibility software to help you manage your development projects with ease.

This is a very good piece of writing. When you have a concept for a company but want to be sure it’s a good idea, you do a feasibility study.

It was very helpful. Thank you so much!

Appropriately timed! A company’s future operations are laid out in great detail in the company’s business plan. Once you’ve done your feasibility study, you’ll know whether or not the proposal has merit. The next step is to lay out your goals, whether financial and otherwise, as well as the strategies you want to use to attain them and the organisational structure you envision.

Prior to the company opening, both are undertaken, and may be repeated again in the future to identify the next steps on new ideas that may arise.

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Feasibility Study vs Business Plan Similarities And Differences

Feasibility Study vs Business Plan

Setting up a business enterprise can present a lot of challenges for the entrepreneur. The preliminary stage which involves a lot of brainstorming often gets down to preparing two important documents: the feasibility study and the business plan, both of which are quite indispensable if you’re considering starting a business, and doing it properly.

The possibility of success in a venture predicates upon the proper delivery of these documents, which should be written after conducting careful research and critical analysis, and conveyed in formats that others can understand, because you might want to seek for funds or investors, or even solicit for a loan, and so won’t be the only person reading them.

It, therefore, becomes needful for any entrepreneur to be able to distinguish between a feasibility study and a business plan, to know how to go about creating them.

What is a feasibility study?

As the name implies, a feasibility study is an analysis of the viability of an idea. Feasibility studies help answer the essential question, “Should we proceed with the proposed idea?” The objective study may be completed in conjunction with a SWOT planning process, which looks at the strengths, weaknesses, opportunities, and threats that may be present externally (the environment) or internally (resources).

Feasibility studies help determine: a) does the company possess the required resources or technologies, and b) does the proposal offer a reasonable return vs. risk from the investment.

So a feasibility study lets you know whether the idea you have for a business is worth the time, effort, and money you are willing to invest in it. It’s just like asking yourself, “Is it advisable that I go into this business?”.

While you might be able to conduct this study yourself, it would be more productive and prudent to get the contributions of different professionals such as accountants, entrepreneurs who have opened successful businesses, and realtors who can advise you on the worth of the location and pricing (values you would need in costing and price estimation), comparing similar businesses in the location where you wish to set up your enterprise.

What is a Business Plan?

A business plan “is a written document describing the nature of the business, the sales and marketing strategy, and the financial background, and containing a projected profit and loss statement”.

A business plan is also a road map that provides directions so a business can plan its future and helps it avoid bumps in the road. The time you spend making your business plan thorough and accurate and keeping it up-to-date is an investment that pays big dividends in the long term.

The business plan comes after you have conducted a proper feasibility study and ascertained that your idea is worth going “all out for”. So creating a business plan is like saying, “Yes I’m convinced about the profitability of this idea. This is how I intend to make it profitable”.

Every business is established for the sole purpose of making a profit. If profiting is not the goal, then it is no business, but rather a non-profit organization. Hence details of how a business will operate and make a profit are contained in the business plan.

This is where you’re going to spell out your financial and other objectives, the methods you plan to use to achieve them, and your proposed organizational structure.

Now, let’s look at what makes a feasibility study and a business plan appear similar.

Similarities between feasibility study and business plan

Comparing the similarities between a feasibility study and a business plan is important because both are used in different ways to help you create a profitable business. Similarities between the two documents include:

Timing : Both are done in the beginning before the work opens, and can be done again later to define the next steps for future ideas.

Inputs : They both involve input from multiple individuals or departments with different skills.

Format : Both contain other documents that are grouped to create the report.

Components : Some of the issues analyzed are similar, including examining the target market, market conditions, and financial costs.

Use : Both help the management of the organization in making decisions, and they can also be shown to potential investors.

By now you should have a considerable understanding of how a feasibility study differs from a business plan. But to expound your knowledge it would do to know what the varying components are.

Purpose : While a feasibility study determines the viability of a business idea, a business plan comes after the decision has been made to go ahead with the business.

Methodology : In essence, a feasibility study is based significantly on research, while a business plan makes projections into the future.

Risks : A feasibility study ascertains the risks associated with the idea, whereas a business plan explains how these risks will be dealt with to ensure that the business makes the desired profit.

Cost : A feasibility study can require hiring professionals with expertise who will conduct thorough studies, whereas a business plan may be written by employees of the business, as part of their jobs.

How do you conduct a Feasibility Study?

If you’re doing the feasibility study yourself, conduct a complete competitive analysis considering the following outlines:

Product demand: Is there a need or want for your product or service? Is the need already being met, or is there room for another product?

Market conditions : Who would buy your product and where are they? Can you serve their location? Is the market saturated, or is there room/need for more products?

Pricing : What do current users pay for similar products? What do you need to charge so that you will be profitable, and will consumers pay your price?

Risks : What are the risks associated with your idea?

Probability of Success : Can you reasonably overcome the risks to become profitable?

Shea Butter Production In Nigeria 2021 Business Plan

Writing a Business Plan?

Writing a business plan may seem daunting, but if you take it step-by-step, it will come to fruition. The Small Business Administration advises that business plans should include the following:

Executive Summary : Include your mission statement, products and or services, some brief information about your leadership team and key employees, as well as the location of your business. To attract investors, add current financial information and projections for growth.

Company description : Detail the problems your business solves; its target market; its competitive advantages, compared with the competition, and anything else that makes your company superior to others: i.e., product awards or recognition, big increases in sales, and so on.

Market analysis : Perform competitive research of what other businesses are doing; their strengths and weaknesses, and how and why your business will be competitive and successful in the market.

Organization or management : State the legal status of your business, such as a corporation or partnership, and include an organizational chart showing management levels, departments, and so on.

Service or product line : State what you will sell or provide and describe the benefits of each. Explain any research done, and any patents filed, and so on.

Marketing and sales : Explain in detail your marketing strategy and how sales will be made.

Funding request : If you are going to be requesting do fund, detail the amount of funding you’ll need for the next five years – specifically, what you’ll do with the funds, and the terms you’re asking for.

Financial projections : This is the business’s financial outlook for the next five years. Include current financial statements, if the business is in operation.

Appendix : This includes supporting documents or requested materials, such as resumes, product photos, letters of reference, patents, licenses, and so on.

In conclusion, it should be obvious by now that a feasibility study and a business plan cannot substitute for each other, and both exist as essential planning documents for successful businesses. If you have the intention of preparing any or both of these documents, it is advisable to seek the aid of a professional writer wherever you might encounter difficulties.

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Business Plan Vs. Feasibility Study

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What Is a Dehydrated Business Plan?

If you're considering starting a business, you'll need both a feasibility study and a business plan. Both documents should be written after conducting thorough research and critical thinking, and conveyed in formats that others can understand. That way, you can show both to people whose opinions you value as well as to those you hope will invest in your idea. Before you begin, it's important to define and distinguish between a feasibility study and a business plan.

Defining Both Terms

A feasibility study is done before starting a business, when you have the idea for the business but you want to make sure it's feasible, or advisable. Put another way, is it worth your time, effort and money to create this business? Several different professionals may contribute to the study, such as an accountant, entrepreneurs who have opened successful businesses, and Realtors who advise on the worth of the location and pricing, comparing similar businesses in the area.

A business plan details how the business will operate. It assumes your feasibility study has been completed and it was determined the idea is viable. Now you're going to spell out your financial and other objectives, the methods you plan to use to achieve them, and your proposed organizational structure.

Consider the Similarities

Comparing the similarities between feasibility study and business plan is important because both are used in different ways to help you create a profitable business. Similarities between the two documents include:

Timing : Both are initially done before the business opens, and can be conducted again later to determine the next steps on future ideas.
Input : Both include input from several individuals or departments that have different skills.
Format : Both include other documents that are pulled together in order to compose the report.
Components : Some of the issues analyzed are similar, including examining the target market, market conditions and financial costs.
Usage : Both help the organization's management make decisions, and can also be shown to potential investors.

Understand the Differences

It's equally important to understand the difference between feasibility study and business plan . They are not the same, and one cannot substitute for the other. Differences include:

Purpose : Feasibility studies determine whether to go ahead with the business or with another idea, whereas business plans are designed after the decision to go ahead has already been made.
Methodology : Essentially, feasibility studies are research projects, whereas business plans are projections for the future.
Risks : Feasibility studies determine the risks associated with the idea, whereas business plans explain how management will deal with the risks so that it will make a profit.
Cost : Feasibility studies can require hiring outside professionals with expertise who will conduct thorough studies, whereas business plans are written by employees of the business, as part of their jobs.

Conducting a Feasibility Study

If you're doing the feasibility study yourself, conduct a complete competitive analysis considering the following:

Product demand: Is there a need or want for your product or service? Is the need already being met, or is there room for another product?
Market conditions : Who would buy your product and where are they? Can you serve their location? Is the market saturated, or is there room/need for more products?
Pricing: What do current users pay for similar products? What do you need to charge so that you will be profitable, and will consumers pay your price?
Risks : What are the risks associated with your idea?
Probability of Success : Can you reasonably overcome the risks to become profitable?

Writing a Business Plan

Writing a business plan may seem daunting, but if you take it step-by-step, it will come to fruition. The Small Business Administration advises that business plans should include the following:

Executive Summary : Include your mission statement, products and or services, some brief information about your leadership team and key employees, as well as the location of your business. To attract investors, add current financial information and projections for growth.
Company description : Detail the problems your business solves; its target market; its competitive advantages, compared with the competition, and anything else that makes your company superior to others: i.e., product awards or recognition, big increases in sales, and so on.
Market analysis : Perform competitive research of what other businesses are doing; their strengths and weaknesses, and how and why your business will be competitive and successful in the market.
Organization or management: State the legal status of your business, such as a corporation or partnership, and include an organizational chart showing management levels, departments, and so on.
Service or product line : State what you will sell or provide and describe the benefits of each. Explain any research done, and any patents filed, and so on.
Marketing and sales : Explain in detail your marketing strategy and how sales will be made.
Funding request : If necessary, detail the amount of funding you’ll need for the next five years - specifically, what you’ll do with the funds, and the terms you’re asking for.
Financial projections : This is the business’s financial outlook for the next five years. Include current financial statements, if the business is in operation.
Appendix : This includes supporting documents or requested materials, such as resumes, product photos, letters of reference, patents, licenses and so on.
MBN: Market Business News: What is a Feasibility Study? Definition and Examples
Cleverism: How to Conduct a Feasibility Study the Right Way
Entrepreneur: 7 Steps to a Perfectly Written Business Plan
SBA: Write Your Business Plan

Barbara Bean-Mellinger is a freelance writer who lives in the Washington, D.C. area. She has written on business topics for bizfluent.com, afkinsider.com, Harbor Style Magazine, the Charlotte Sun and more. Barbara holds a B.S. from the University of Pittsburgh and has won numerous awards in B2B and B2C marketing.

How to write a comprehensive business plan, how to design an effective business plan, what is the role of a business plan in getting venture capital funding, how to outline a feasibility study, what factors make the difference between a good business plan & an excellent one, 6 types of business plans, examples of business feasibility reports, how to create a business plan as an entrepreneur, how to write a business description, most popular.

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Business Plan Vs. Feasibilty Study

by Brian Hill

Published on 1 Jan 2021

Business plans and feasibility studies are analysis and decision-making tools used by companies. Feasibility studies are used to determine whether a proposed action has a high enough probability of success that it should be undertaken. Business plans are blueprints for implementing actions that have already been deemed feasible by the company's management.

Many Decisions vs. One

Business plans map out the direction a company intends to take to reach its revenue and profit objectives in the future. They are a compilation of numerous decisions made by the management team about how the company should be run. Feasibility studies are designed to provide guidance for one decision. Feasibility studies are often done to decide whether to start the business or not -- whether the likelihood of success is high enough to make the financial risk worthwhile. They can also be used to make decisions about whether to launch a new product in an existing company, or enter a new market -- any activity where there is a question about whether the company should take the action or not. Feasibility studies are sometimes termed cost/benefit analyses because the projected costs of the project are compared to the expected benefits to yield a conclusion.

Although the content and emphasis of business plans vary by company and industry, all plans have many elements in common. They describe the products or services the company intends to sell, why customers need these products or services, the target customers, how the company intends to reach them through its marketing strategy, the background and capabilities of the management team, and risk factors the company may face. They also contain information on projected revenue and profit. Plans contain these specific elements because many times they will be read by investors or other people outside the company, and these individuals want to see very specific information in a plan. Feasibility studies may have some or many of the same elements of a business plan, including a description of the human resources required and financial projections, but all the information leads to a conclusion or recommendation.

Differences

A business plan assumes a business is going to succeed and presents the steps necessary to achieve success. Those in charge of conducting a feasibility study should not have a preconceived view about whether success will be attained. They must be as objective as possible. They conduct research and let the facts lead to the ultimate opinion given in the study. If the study's conclusion is that the project is viable, some of the research done may be included in the company's business plan, such as projections of the size of the market.

Both business plans and feasibility studies attempt to predict future outcomes using assumptions about what is likely to happen in the business environment -- the economy and the company's competition. But this environment is always changing and the assumptions a company uses in its projections of revenue or profit may prove to be incorrect. Companies find that some of the strategies in their plan do not work to the degree the business owner expected, and have to be adjusted. In the case of a feasibility study, an incorrect conclusion can be especially costly -- it could mean launching a venture that has very little chance of surviving or approving a project that wastes the company's human and financial resources.

Difference Between Feasibility Study and Business Plan

Many people don’t know that there is a difference between a business plan and a feasibility study.

Frequently, clients reach out seeking a feasibility study, but after an in-depth conversation, it becomes evident that what they truly require is a comprehensive business plan. In this article, I’ll clarify this common misconception and provide a clearer understanding of the distinction.

So let us start with the first one, which will give us a brief overview of what a business plan and a feasibility study is all about

Table of Contents

What is the Difference Between Feasibility Study and Business Plan

Business plans and feasibility studies are vital business tools for analysis and for making business decisions. However, a feasibility study is not the same thing as a business plan because a feasibility study gives a conclusion or recommendation that would be completed prior to developing the business plan.

Feasibility Study

A feasibility study is done to determine whether a proposed business has a high enough probability of success that it should be undertaken. A feasibility study is carried out first in order to know if the business will be viable before venturing into it. Before a company can invest in a business or launch a new product, a feasibility study is done to determine if there will be a return on investment.

According to Rochester.edu, a feasibility study can be defined as “a controlled process for identifying problems and opportunities, determining objectives, describing situations, defining successful outcomes, and assessing the range of costs and benefits associated with several alternatives for solving a problem.”

It can also be used to make decisions about whether to launch a new product for an existing company or enter a new market. Feasibility studies are sometimes termed cost-benefit analyses because the projected costs of the project are compared to the expected benefits to yield a conclusion.

For instance, imagine that you have been an instructor in a company that provides IT training and certifications in the USA and you want to come to Africa to impact the knowledge by starting a new business and even adding training like IT Certification Practice Test Dumps , but you are faced with the big question, “Would my business fly?”. Is there a market for my services?

In this situation, the best decision is to conduct a feasibility study to determine if those IT programmes have an established market. If they are a company that needs interns trained by your company.

Business plans are guidelines for carrying out actions that the company’s management has already determined to be feasible. So a business plan is like a roadmap for your business that outlines goals and details how you plan to achieve those goals.

Business plans map out the direction a company intends to take to reach its revenue and profit objectives in the future. They are a compilation of numerous decisions made by the management team about how the company should be run. A business plan is done after a feasibility study has been carried out. If the recommendation of the feasibility study is negative, then there will be no need to venture into the business. Then, if the feasibility study says the business will be feasible, a business plan is developed, which will then map out plans and strategies to adopt in order to achieve business goals, including revenue generation, market penetration, customer acquisition, marketing, and sales strategies, among others.

A business plan can be done for internal or external use. The internal use of a business plan is for the management and staff of the company, while the external use is for shareholders, investors, bank loans, and customers.

Main Purpose of a Business Plan and a Feasibility Study

In short, a feasibility study gives a conclusion or recommendations, while a business plan gives a roadmap.

The feasibility study helps determine whether an idea or business is a viable option. Therefore, a feasibility study is done first before investing a dime in the business. Before considering approaching investors, you must have done your research to know that the business is feasible before taking any decision. That is why a feasibility study gives a conclusion or recommendations.

A business plan will map out the roadmap and strategies to achieve your business goal because a business plan assumes a business is viable and presents the steps necessary to achieve success. If you are looking forward to approaching an investor or trying to get a bank loan, what you need is a business plan. Some investors might request for a feasibility study before the business plan

Outline of a Business Plan and a Feasibility Study

Below is the outline of a business plan:

Executive Summary
Business/Company Overview
Products/Services
Market/Industry Analysis
Operation Plan
Management/Personal plan
Sales Forcast
Financial Plan
Appendices and Exhibits

A good outline for a feasibility study includes:

Introduction
Product or Service
Market Environment
Competition
Business Model
Market and Sales Strategy
Production Operations Requirements
Management and Personnel Requirements
Regulations and Environmental Issues
Critical Risk Factors
Financial Predictions Including: Balance Sheet, Income Statement, Cash Flow Statement, Break Even Analysis, and Capital Requirements

Challenges of a Business Plan and a Feasibility Study

Looking at both the business plan and feasibility study, you will discover that both attempt to predict future outcomes using assumptions about what is likely to happen in the business and the business environment, which include government policies, the market, competition, and risk, among others. Any poorly done feasibility study can lead to a costly mistake. If a business is not viable and the recommendation says it will be viable, the end result will not be palatable. This will affect the business plan and the operation of the business adversely.

A poorly done business plan—poor projections, strategies, analysis, business model, and environmental factors, among others—can easily be adjusted in the course of running the business, but the same cannot be said of a feasibility study because, in a feasibility study, an incorrect conclusion can be costly—it could mean launching a venture that has very little chance of surviving or approving a project that wastes the company’s human and financial resources.

If you need a standard business plan, check out the list of Business Plan we have

Do you want us to develop a unique business plan for you, Check out our business plan service page

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5 thoughts on “Difference Between Feasibility Study and Business Plan”

This is beautiful. Thank you for sharing this informative article by shading more light on the two.

I’ve been planning to hire a feasibility analysis service, so I’ll have an idea, whether my candle business is feasible. I agree with you that this must be done first before approaching the investors. It is also true that an incorrect conclusion in the feasibility study could be costly.

It’s inevitable! It helps you to make the right decision.

My business plan is ready but I will like you to review it

Alright, You can reach out to me on 07031542324 or email me at [email protected]

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The Difference Between A Feasibility Study And A Business Plan

Should you prepare a feasibility study report or a business plan? This is a question that is always asked by thousands of people daily. They want to prepare either of the two but classify both as the same without understanding the clear distinction between a feasibility study report and a business plan.

Feasibility study reports and business plans have different goals, although similar. One is more in-depth than the other, and the reasons for preparing each is partly different from the other.

While a feasibility study report and a business plan are both analysis and decision making tools, it is highly important to know the difference between a feasibility study report and a business plan at all times, as I have detailed below:

See Also: The Difference Between A Business Plan And A Business Proposal

Reasons For A Feasibility Study Report

A feasibility study report is a document that is prepared after a feasibility study has been carried out. It contains in-depth analysis, projections, cost estimates, production requirements, production processes, and is the ultimate tool to determine whether a business should be started or not.

Since the feasibility study that’s first carried out is a comprehensive market research, its results will show the market size, their demographics, genders, age brackets, number of businesses operating in the industry, and much more.

These results are then put together in the report along with their cost projections, and will ultimately show whether the business is worth following through or not.

Feasibility Study Report Structure

A sample feasibility study report structure could look like the list below:

Introduction
Product or Service
Market Environment
Competition
Business Model
Market and Sales Strategy
Production Operations Requirements
Management and Personnel Requirements
Regulations and Environmental Issues
Critical Risk Factors
Financial Projections

See Also: How To Write A Feasibility Study Report In Nigeria Or Africa: The Complete Guide

Reasons For A Business Plan

A business plan is a strategy and tactical document that is prepared after a successful feasibility study has been carried out. It is written based on the results of a feasibility study, and focuses instead on how the business can achieve a successful market penetration and growth.

A business plan also contains financial projections, cash flow statements, balance sheets, profit and loss statements, break even analysis, and much more. It shows how profitable or not the business will be after acting on the results gotten from the feasibility study, and what it can do to either grow its revenues or change its focus to another industry.

Business Plan Structure

A sample business plan structure could look like the list below:

Executive Summary
Business Description
Service or Product Line
Market Analysis & Strategies
Organization & Management
Funding Request

See Also: How To Write A Business Plan: The Complete Guide

What Then Do You Need?

If you know nothing about the business you intend to start, the first step is to prepare a feasibility study report after an extensive market research has been carried out. After which, you can go on to prepare a business plan, so you can show the growth, sustainability, and profit potential of the business you’ve set out to run.

See Also: How to Choose A Business Plan Consultant

What are your thoughts on the difference between a feasibility study report and a business plan? Let me know by leaving a comment below.

How To Start A Lucrative Solar Energy Installation Business In Nigeria and Africa: The Complete Guide

How to start a lucrative ketchup production business in nigeria and africa: the complete guide, how to start a lucrative salt production business in nigeria and africa: the complete guide, 20 comments.

Until now,I always think that business plan and feasibility study report are the same. Thank you a million times for pointing out the difference to me. An eye opener I may say.Thanks once again.

Imeh Enuah.

I’m glad you found the article valuable, Imeh.

Do have a great time!

Thank you brother ❤️👍

Thanks for the effort but still not crystal clear to me…

Thank you for the comment, Victor.

Indeed they’re similar. But the simplest way to understand it is that “a feasibility study is first carried out and documented in a report before a business plan is written to show how you can execute your plans to take the market”.

Stan, even though we don’t go writing you for those your valuable articles, which are changing a lot of lives for good, mullions of people are there silently waiting to read your article everyday. Thanks for impacting knowledge and sharing those priceless write-ups.

Thank you for the kind words and for being a reader, Elvis.

Stan, this has cleared my inquisition on the differentiating factor between the two.

I’m glad you found the article valuable, Daniel.

Thank you for the comment.

Thanks a lot for the article. My position as a Consulting Executive in my previous employment taught me that in industry every feasibility studies is accompanied by a business plan all in one report.

Business plans usually standalone for only existing businesses which usually requires such things as a new marketing or market research, cashflow analysis and asset reappraisal.

Thank you for the contribution, Jeremiah.

Indeed a detailed feasibility report is an in-depth business plan.

What is the difference between a marketing plan and bussines plan

We’d still post an article about that.

Do look out for it on the blog.

Thank you for asking.

Very insightful to say the least. Well done sir!

Thank you for the kind words, Tobechi.

Indeed you are doing a great job.i feel so blessed and fortunate to have such unquontifiable opportunity of learning daily,God bless you, thanks.

Thank you for the kind words, Gideon.

Hello, I wanto prepare a feasibility study report for a potential investor I have a meeting with in another 2 weeks. How do I reach you and where do we start from?

Stan, this is lovely I think I have a better conclusion n knowledge. God bless you.

Thank you for reading, Obi.

Comments are closed.

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Feasibility Studies vs. Business Plans

Often we asked about the differences between a business plan and a feasibility study. As it relates to the business plan, this document is specific for raising capital and showcasing what the business intends to do over a three year to five year timeframe. Additionally, the business plan features information regarding the anticipated financial results within a comprehensive financial model. Almost all business plans feature a profit and loss statement, cash flow analysis, balance sheet, breakeven analysis, and business ratios page. The business plan also features a significant amount of industry and market research specific to the type of business that is being operated. One of the other things that is found within a business plan but not within a feasibility study is a comprehensive marketing plan in regards to how the business intends to acquire customers. The business plan itself should be considered one of the sales document for a potential funding source or a business partner. Additionally, a business plan does not contain any of the legal risks or legal disclosures that would be normally found within a feasibility study or a private placement memorandum.

A feasibility study on the other hand focuses much more on the detailed operations the business on a day-to-day basis. Issues that are covered within the feasibility study consist of legal risks, operational risks, economic risks, and related financial risks. As relates to legal risks, a feasibility study will outline the potential liabilities that the business may have as it progresses through its operations. For instance, a medical practice feasibility study may focus significantly on the risks relating to rendering services as it relates to malpractice claims. Additionally, using the same example of the economic risks associated with this type of business could include changes in regulation and impact Medicare or Medicaid reimbursement. These are all things are much more thoroughly discussed within a feasibility study and a business plan. Often, many entrepreneurs in conducting a substantial amount of due diligence will focus on developing both documents so that the business plan can be used for raising capital while a feasibility study can be used for addressing all the risks and issues at the business may have as it develops its business operations. Most business plan writing firms do not provide feasibility studies as this is something that is usually completed by an economic consulting firm. An economic consulting firm has a much greater understanding of the detailed day-to-day operations of the business rather than just focusing specifically on how the business will be using capital that may be raised and the anticipated financial results.

Much like a business plan, a feasibility study usually has around 4 to 5 chapters that goes in depth for each of the issues that needs to be discussed and examined by the entrepreneur. Foremost, one of the things that these two documents to have in common is at the industry and market research is usually included in both documents. Although some economic consulting firms will omit the industry research section – it is generally considered to very important so that a individual reader understands the direction that the industry is taken for any specific type of company. One of the other things that is much more thoroughly discussed within the feasibility study is the critical risks and problems with the company. This includes a very detailed overview of each potential risk that the business will have and how the entrepreneur will work to remedy that problem. Generally speaking, most feasibility studies run about 30 to 40 pages depending on the complexity of the business. Companies that have very complex operating procedures can even have feasibility studies that run upwards of 100 pages depending on the scope, scale, and size of the organization.

Most entrepreneurs who are starting a small business like a new retail location or a small service company do not really require a full feasibility study. These analysis are typically done for much larger scale organizations where potentially millions of dollars to be put at risk for the development of a new operating segment, development of new business, or expansion of existing operations. Typically, a feasibility study usually takes a month to complete foremost economic consulting firms that engage in this type of business. As relates to cost, a feasibility study can run anywhere from $1,000 following a $50,000 depending on the size of the organization and how in depth the feasibility study needs to be in order to clearly outline risks and strategies.

Feasibility study: definition, benefits and differences with a Business Plan

Last updated on 09 January, 2024

Welcome to our series of articles on feasibility studies.

What is a Feasibility study?
What is a bankable feasibility study?
How to do a feasibility study?
Feasibility study consultants: expertise needed
Cost of a feasibility study
Car Park Feasibility Study: Key considerations
Hotel Feasibility Study: Methodology
Feasibility study of solar PV projects: Key components
Feasibility study of real estate developments
Feasibility study of marina projects

In this post, we will touch on all the basic concepts behind a feasibility study. definition, benefits of doing it, main parts, differences with a business plan, etc. Aninver Development Partners is a consulting firm specializing in Feasibility studies for projects such as hotels, infrastructure, energy, technology, etc. We assist clients globally.

Definition of Feasibility study

A feasibility study is a comprehensive and systematic analysis and evaluation of a proposed project, business venture, or initiative to determine its practicality, viability, and potential for success. It involves a thorough examination of various factors, such as financial, technical, operational, legal, environmental, and market-related aspects, to assess whether the project is feasible and worth pursuing.

The primary goal of a feasibility study is to provide stakeholders with essential information and insights to make informed decisions about whether to proceed with the project, abandon it, or make necessary adjustments to enhance its chances of success.

Differences between a feasibility study and a business plan

Feasibility studies and business plans are both important tools in the development and evaluation of a business or project, but they serve different purposes and are created at different stages of the process. Here are the key differences between a feasibility study and a business plan:

Differences in Purpose

Feasibility Study : Feasibility studies are conducted in the early stages of project development or business planning. Their primary purpose is to determine whether a proposed project or business idea is viable and should be pursued. Feasibility studies focus on assessing the potential risks, challenges, and opportunities associated with the project.
Business Plan : Business plans are created after the feasibility study, once it has been established that the project is viable. The purpose of a business plan is to outline in detail how the business will be structured, operated, and grown. It serves as a roadmap for the future of the business and is often used to secure financing.

Differences in Content

Feasibility Study : A feasibility study includes an analysis of the project's overall concept, market research, technical requirements, financial projections, potential risks, and recommendations. It provides a high-level overview of the project's feasibility.
Business Plan : A business plan is a detailed document that outlines the company's mission, vision, goals, organizational structure, market strategy, marketing and sales plans, financial forecasts, and operational details. It delves into the specifics of how the business will operate.

Differences in Timing

Feasibility Study : Feasibility studies are conducted at the outset of a project or business idea to assess its potential feasibility. They help stakeholders decide whether to move forward with the project.
Business Plan : Business plans are typically created after the feasibility study, once it has been determined that the project is feasible and worth pursuing. They provide a roadmap for the actual operation and growth of the business.

Differences in Audience

Feasibility Study : The primary audience for a feasibility study includes project stakeholders, investors, and decision-makers who need to determine whether the project should proceed.
Business Plan : Business plans are used to communicate the business's vision and strategy to a wider audience, including potential investors, lenders, partners, and employees.

In summary, a feasibility study is a preliminary assessment of the potential success of a project, while a business plan is a detailed document that outlines how a business will be run. The feasibility study helps determine whether a business plan should be developed, while the business plan provides a comprehensive strategy for the ongoing operation and growth of the business.

Feasibility study vs Pre-feasibility study

Let's explore now the key differences between a prefeasibility study and a feasibility study:

Purpose and Scope : A prefeasibility study and a feasibility study both play critical roles in project evaluation, but they serve distinct purposes. A prefeasibility study is typically the initial phase in the assessment process. Its primary purpose is to provide a preliminary evaluation of a project's potential viability. It helps stakeholders decide whether it's worth investing further resources into a detailed feasibility study. In contrast, a feasibility study goes into much greater depth and detail, assessing the project's practicality from technical, financial, operational, and market perspectives. It aims to provide a comprehensive understanding of whether the project is feasible and worth pursuing.

Level of Detail : One of the key distinctions between the two studies is the level of detail they encompass. A prefeasibility study offers a broad overview of the project, examining high-level factors like market demand, technical requirements, and rough cost estimates. It provides enough information to make an initial go/no-go decision. In contrast, a feasibility study drills down into finer details, providing precise financial projections, risk assessments, engineering specifics, and a comprehensive business plan. It seeks to leave no stone unturned in assessing the project's practicality.

Resource and Cost Implications : A prefeasibility study is generally less resource-intensive and cheaper to conduct compared to a full feasibility study. It acts as a cost-effective filter to eliminate unviable projects early in the evaluation process. Once a project passes the prefeasibility stage and proceeds to a feasibility study, it implies a commitment of more resources, time, and finances due to the comprehensive nature of the study. A prefeasibility study helps in efficient resource allocation by focusing only on the most promising projects, while a feasibility study is a more intensive process suitable for projects that have demonstrated a higher likelihood of success during the prefeasibility assessment.

Benefits of doing a Feasibility study

Conducting a feasibility study offers numerous benefits, making it an essential step in the decision-making process for any project, business venture, or initiative. Here are the key advantages of performing a feasibility study:

Risk Assessment : Feasibility studies help identify potential risks and challenges associated with a project. By thoroughly examining technical, financial, operational, and market-related aspects, stakeholders can pinpoint areas of concern and develop strategies to mitigate or manage these risks effectively.
Decision-Making : Feasibility studies provide critical information to decision-makers, helping them make informed choices about whether to proceed with a project. These studies offer a basis for go/no-go decisions, preventing resources from being wasted on unviable endeavors.
Resource Allocation : By assessing the feasibility of a project, stakeholders can allocate resources more efficiently. They can avoid overinvesting in projects with limited potential and allocate resources to those with a higher likelihood of success.
Financial Planning : Feasibility studies include detailed financial projections and cost estimates. This financial information is invaluable for securing funding from investors, lenders, or other sources. It helps in creating a solid business case.
Market Insight : Market feasibility studies provide insights into customer demand, market trends, and competitive dynamics. This information is crucial for designing products or services that meet market needs and for formulating effective marketing strategies.
Optimized Design : Technical feasibility studies ensure that a project's technical requirements and design are viable. They help in avoiding costly design flaws and ensuring that the project can be implemented as planned.
Legal and Regulatory Compliance : Feasibility studies can identify potential legal and regulatory challenges. This allows for the development of strategies to navigate and comply with relevant laws and regulations, reducing the risk of legal complications later on.
Enhanced Project Viability : Feasibility studies may lead to adjustments and improvements in the project plan, making it more viable and likely to succeed. This iterative process ensures that potential issues are addressed proactively.
Investor and Stakeholder Confidence : When potential investors and stakeholders see that a comprehensive feasibility study has been conducted, they are more likely to have confidence in the project. This can make it easier to secure funding and support.
Long-Term Planning : Feasibility studies not only assess the viability of a project in the short term but also help in long-term planning. They provide insights into the sustainability and growth potential of a business or initiative.

In summary, conducting a feasibility study is a valuable step in the project development process. It provides a structured approach to assess the viability of a project, manage risks, make informed decisions, secure financing, and set the stage for a successful venture. The benefits of a feasibility study extend beyond initial decision-making and contribute to the overall success and sustainability of a project or business.

Components of a Feasibility study

A feasibility study typically consists of several key components that provide a comprehensive evaluation of a project, business venture, or initiative. These components help stakeholders make informed decisions about the feasibility and viability of the proposed endeavor. The main components of a feasibility study include:

Executive Summary

The executive summary provides a concise overview of the entire feasibility study. It includes a brief description of the project, its objectives, and the key findings and recommendations. It serves as a quick reference for decision-makers.

Project Description

This section outlines the project's goals, objectives, and scope. It defines the problem the project aims to solve or the opportunity it seeks to capture. It also specifies the project's location and the stakeholders involved.

Market Analysis

Market analysis assesses the demand for the product or service within the target market. It includes information on target customers, market size, growth potential, competition, and market trends. This component helps determine whether there is a viable market for the project.

Technical Feasibility

Technical feasibility examines the project's technical requirements. It assesses whether the necessary technology, equipment, and resources are available or can be developed. It also identifies any technical challenges that may need to be addressed.

Operational Feasibility

Operational feasibility evaluates how the project will be implemented and operated. It includes details about project timelines, workflow, personnel requirements, and operational processes. This section helps in understanding how the project will function on a day-to-day basis.

Financial Feasibility

Financial feasibility is a critical component that includes detailed financial projections and analysis. It covers aspects such as startup costs, revenue forecasts, expense estimates, cash flow analysis, and return on investment calculations. It assesses the project's financial viability and potential profitability.

Legal and Regulatory Analysis

This section examines the legal and regulatory requirements that may impact the project. It identifies permits, licenses, or compliance issues that need to be addressed. Understanding and addressing legal and regulatory aspects are essential to avoid potential obstacles.

Risk Assessment

The risk assessment component identifies potential risks and challenges associated with the project. It evaluates the probability and impact of these risks and suggests risk mitigation strategies. Risks can be financial, technical, operational, market-related, or related to external factors.

Recommendations and Conclusion

In this section, the feasibility study summarizes the findings and presents clear recommendations based on the assessment. It often includes a conclusion that states whether the project is feasible and worth pursuing or whether it should be abandoned or modified.

The appendices contain additional supporting documentation and data, such as detailed financial spreadsheets, market research reports, technical specifications, and any other relevant information. These provide a more in-depth reference for stakeholders.

The main components of a feasibility study collectively provide a thorough assessment of a project's viability from multiple angles, ensuring that decision-makers have a comprehensive understanding of the project's potential, risks, and benefits.

Examples of Feasibility studies

Let's look now into some examples of feasibility studies for different types of projects and initiatives:

Real Estate Development

A real estate developer is considering constructing a residential apartment complex in a growing urban area. A feasibility study would assess factors like market demand, location, zoning regulations, construction costs, potential revenue from rentals, and the financial viability of the project.

Manufacturing Plant Expansion

A manufacturing company is considering expanding its operations by building a new production facility. The feasibility study would evaluate factors such as available land, infrastructure, equipment requirements, workforce, environmental impact, and the financial feasibility of the expansion.

Small Business Startup

An entrepreneur is exploring the feasibility of starting a small restaurant in a specific location. The feasibility study would examine the local market, including competitors, target customer demographics, startup costs, regulatory requirements, and financial projections for the first few years of operation.

Renewable Energy Project

A renewable energy company is considering the construction of a solar power plant. The feasibility study would assess the site's solar exposure, grid connection feasibility, equipment costs, revenue from energy sales, environmental impact, and the return on investment over the project's lifespan.

Healthcare Facility Expansion

A hospital is contemplating an expansion to meet growing patient demands. The feasibility study would include an assessment of the required medical equipment, staffing needs, regulatory compliance, funding sources, and the anticipated patient load.

Tourism Development

A tourist destination is considering the construction of a new hotel and recreational facilities. The feasibility study would evaluate the area's appeal to tourists, competition with existing businesses, construction costs, expected occupancy rates, and potential revenue from tourism.

Nonprofit Program Expansion

A nonprofit organization is looking to expand its community outreach programs. The feasibility study would assess the need for the programs, funding sources, volunteer availability, operational costs, and the impact of the expansion on the organization's mission and goals.

E-commerce Startup

An entrepreneur plans to launch an e-commerce website. The feasibility study would examine market demand, website development costs, marketing strategies, competitive analysis, and projected sales revenue and profitability.

These examples illustrate how feasibility studies are conducted in various fields and industries to evaluate the potential success and viability of a wide range of projects and initiatives. The specific components and focus areas of a feasibility study will vary depending on the nature of the project and the questions it seeks to address.

7 steps to conduct a Feasibility study

Now, let's think we are going to write a feasibility study. Let's check what steps we need to take to develop the final report.

Conduct a Preliminary Analysis

Begin by conducting an initial evaluation of the project's objectives and scope. This step involves defining the problem the project intends to address or the opportunity it aims to seize. Ensure that the project's goals are clear and well-defined.

Analyze Technical Specifications

Examine the technical aspects of the project in detail. Evaluate the availability of required technology, equipment, and resources. Verify that the project's technical requirements can be met effectively.

Conduct a Commercial Analysis

Perform a comprehensive analysis of the project's commercial aspects. This step involves assessing the market's demand for the product or service, analyzing market size, competition, customer needs, and market trends. Determine if there is a feasible market for the project.

Prepare a Projected Income Statement

Create a detailed projected income statement for the project. This includes estimating startup costs, revenue forecasts, expense projections, and cash flow analysis. Calculate the return on investment (ROI) to determine the project's financial viability, the Internal Rate of Return (IRR) of the investment and the Net Present Value (NPV) of future cash flows.

Prepare a Day-Zero Balance Sheet

Develop a balance sheet that represents the project's financial position at the outset (day zero). This financial snapshot should account for all assets, liabilities, and equity to provide a clear overview of the project's financial situation before it begins.

Analyze Different Alternatives for Feasibility

Explore various alternatives and scenarios for the project's feasibility. Assess different approaches, technologies, or business models to identify the most viable option. Consider the potential impact of these alternatives on the project's success. Make sensibilities to potentila risks.

Make a Go/No-Go Decision

Based on the findings and analysis conducted throughout the feasibility study, make a well-informed decision on whether to proceed with the project (a "Go" decision) or abandon it (a "No-Go" decision). Ensure that the decision aligns with the project's goals and aligns with the information presented in the study.

These steps provide a structured approach to conducting a feasibility study, ensuring that all relevant aspects of the project are thoroughly assessed and considered before making a decision on its viability.

In conclusion, a feasibility study is an indispensable tool for any project, business venture, or initiative. It serves as the critical bridge between a concept and a well-informed decision. By following a systematic process that includes a preliminary analysis, technical assessment, commercial evaluation, financial projections, and a careful consideration of alternatives, stakeholders can gain a comprehensive understanding of a project's viability.

The feasibility study's ability to assess market demand, technical feasibility, operational requirements, financial viability, and potential risks empowers decision-makers to make informed choices. Whether it's a real estate development, a new product launch, a manufacturing expansion, an IT system upgrade, or any other endeavor, a feasibility study helps in risk management, efficient resource allocation, and, ultimately, the successful realization of the project's goals.

It's important to remember that a well-conducted feasibility study not only serves the purpose of greenlighting a project but also provides a foundation for its long-term success. It gives stakeholders the confidence that the project is based on sound analysis and planning. In a world of complex challenges and opportunities, the feasibility study is a guiding compass for those seeking to turn innovative ideas into reality.

Make sure you hire the right consultants to deliver your feasibility study or business plan. Our firm, Aninver Development Partners, specializes in designing bankable feasibility studies to make sure projects continue to their following phase.

Send us a message on our contact page and we can discuss how we can help you.

Some of our experience conducting feasibility studies can be seen below:

Feasibility Study for a new marina in the island of San Andrés through PPP
Pre-feasibility study for construction of silo storages in Northern Ghana through PPP
Feasibility study of a real estate WAQF project in Cotonou (Benin)
Feasibility study and analysis of strategic alternatives of a touristic development in Natal
Feasibility study for creation of an Investment and Export Promotion Agency of Health services in Tunisia
Feasibility Study for car parks in Bishkek though PPP
Feasibility study of markets in Benin and Togo under PPP scheme
Feasibility Study for the establishment of a Large-Scale Cashew Processing Plant in Zambia
Public Private Partnership (PPPs) study in the Housing Sector
Review of Business Case for Manila Central Subway
First Mover PPP Prefeasibility Study
Review of the feasibility study of the PPP project Complejo El Brillante, in Cordoba (Spain)
Review of pre-feasibility study of a Health PPP project

Alvaro de la Maza is one the founding partners of Aninver Development Partners. Alvaro is a Civil Engineer, MS on Infrastructure Management and MBA by IESE Business School.Alvaro has extensive experience in Infrastructure and Public Private Partnerships. Alvaro has worked and led multiple consulting projects for clients such as the World Bank, the African Development Bank and other donors.Alvaro enjoys creating digital products and he has led the development of market intelligence platforms in d...

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Business Plan

The Difference Between a Business Plan and a Feasibility Study

October 24, 2023
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Successful businesses don’t happen by chance; they are the result of careful planning and assessment. Whether you’re launching a startup or considering a new project, you need a roadmap that outlines your goals, strategies, and financial projections. This is where a business plan and a feasibility study come into play.

In this article, we will delve deep into the realms of business planning and feasibility analysis, exploring the crucial distinctions between these two fundamental tools.

Understanding Business Plans

Definition and Purpose

A business plan is a comprehensive document that outlines the objectives, strategies, and financial projections for your business. Its primary purpose is to provide a detailed roadmap for your company’s future. It acts as a strategic guide for entrepreneurs, investors, and stakeholders.

Components and Elements

Business plans typically consist of several key components, including:

Executive Summary : A concise overview of the entire plan.
Market Analysis : Research on the industry, competition, and target audience.
Marketing Strategies : Detailed plans for branding, promotion, and sales.
Financial Projections : Forecasts for income, expenses, and profitability.
Operational Plan : Information on day-to-day operations and management structure.
Risk Assessment : Identification and mitigation of potential risks.
Exit Strategy : Plans for future expansion, sale, or closure.

Role in Business Operations

A business plan serves as a strategic document that guides your business operations. It provides clarity on your business model, goals, and how you intend to achieve them. Moreover, it is often a critical tool for attracting investors and securing financing.

Exploring Feasibility Studies

The Difference Between a Business Plan and a Feasibility Study

A feasibility study is a systematic analysis of the practicality and viability of a business idea. Its primary purpose is to determine whether a concept is achievable and sustainable. Feasibility studies are often conducted in the early stages of business development to assess the potential success of a project.

Key Components and Areas of Focus

Feasibility studies typically encompass the following key components:

Market Research : Detailed analysis of the market, including target demographics, competition, and demand.
Technical Feasibility : Evaluation of the project’s technical requirements and capabilities.
Financial Feasibility : Assessment of the project’s financial viability, including cost estimates and revenue projections.
Operational Feasibility : Examination of the logistical and operational aspects of the project.
Legal and Regulatory Feasibility : Review of legal and regulatory requirements that may impact the project’s execution.
Sensitivity Analysis : Testing various scenarios to assess the project’s adaptability to changing circumstances.

Determining Viability

A feasibility study is primarily concerned with determining the viability of a business idea. It helps answer critical questions, such as whether the project is financially feasible, whether the market will support it, and whether potential risks can be mitigated effectively.

Timing and Sequence

Chronological Order

One key difference between a business plan and a feasibility study is the chronological order in which they are typically created. Feasibility studies often precede the development of a business plan.

Why Feasibility Studies Come First

Feasibility studies are conducted early in the business development process to assess the viability of a concept before investing significant time and resources in a comprehensive business plan. If a feasibility study reveals that a project is not feasible, it can save a business from pursuing an unviable idea.

Data Collection and Analysis

Research and Data Collection

Both business plans and feasibility studies involve extensive research and data collection. However, the focus and purpose of this research differ.

Data Analysis in Business Plans

In business plans, data analysis is geared toward understanding the market, competition, and financial projections. It aims to provide a strategic direction for the business.

Data Analysis in Feasibility Studies

Feasibility studies conduct in-depth analysis, focusing on market research, technical feasibility, financial feasibility, and other areas to determine the practicality of a project. The goal is to evaluate whether the project is worth pursuing based on collected data and analysis.

Risk Assessment

Identifying and Mitigating Risks

Both business plans and feasibility studies address the critical aspect of risk assessment, but their approaches differ.

Risk Assessment in Business Plans

Business plans identify and outline potential risks but often focus on strategic plans to minimize and manage these risks.

Risk Assessment in Feasibility Studies

Feasibility studies dig deeper into the assessment of potential risks, challenges, and market uncertainties. They are essential for determining whether the project is too risky or whether risks can be effectively mitigated.

Financial Projections

Detailed Financial Forecasts

Both business plans and feasibility studies involve financial projections, but the depth of these projections varies.

Financial Projections in Business Plans

Business plans include detailed financial forecasts, such as income statements, balance sheets, and cash flow projections. These projections are integral for attracting investors and securing financing.

Financial Analysis in Feasibility Studies

Feasibility studies provide financial analysis that focuses on determining the project’s financial viability. They assess whether the project can be completed within budget and whether it has the potential to generate sufficient revenue to cover costs.

Market Analysis

In-Depth Market Assessment

Market analysis is an important aspect of both business plans and feasibility studies.

Market Analysis in Business Plans

Business plans provide an overview of the market, including target demographics, competition, and market size. Market analysis in business plans is often geared toward supporting sales and marketing strategies.

Market Analysis in Feasibility Studies

Feasibility studies conduct in-depth market research, delving into the specific needs of the target audience, competition, and market demand. The goal is to assess whether the market can support the project and whether it presents a viable opportunity.

Resource Allocation and Budgeting

Allocating Resources

Resource allocation and budgeting are considerations in both business plans and feasibility studies, but the focus varies.

Rea also: The difference between a traditional business plan and a lean startup plan

Resource Allocation in Business Plans

Business plans often include plans for allocating resources, such as staff, equipment, and capital. They outline budgetary requirements for various aspects of the business.

Resource Allocation in Feasibility Studies

Feasibility studies assess the resource requirements of the project and provide an estimate of the budget needed for project development. This information is essential for evaluating whether the project can be executed within the available resources.

Decision-Making Impact

Influencing Decisions

The outcomes of both business plans and feasibility studies have a significant impact on decision-making.

Impact of Feasibility Studies

Feasibility studies influence the decision to proceed with a business idea. If a feasibility study reveals insurmountable challenges, it may deter entrepreneurs from pursuing the project.

Role of Business Plans

Once a project is deemed feasible through the feasibility study, a business plan becomes the tool for executing the strategies and operations outlined in the feasibility study. It guides the day-to-day activities of the business.

Scalability and Adaptability

Adapting to Change

Scalability and adaptability are crucial aspects of both business plans and feasibility studies, but they approach change differently.

Scalability in Business Plans

Business plans may be less adaptable in the face of changing market conditions. They often represent a set path that the business intends to follow.

Adaptability in Feasibility Studies

Feasibility studies emphasize adaptability and flexibility. They recognize that market conditions can change rapidly, and the project may need to adapt to these changes to remain viable.

Integration for Success

The Synergy of Both Tools

While business plans and feasibility studies serve distinct purposes, they can complement each other effectively in the business development process.

How They Work Together

Business plans and feasibility studies work together to create a robust business strategy. The insights gained from the feasibility study can inform the development of a comprehensive business plan. The feasibility study’s findings on market viability, resource requirements, and potential risks can be integrated into the business plan’s strategies and financial projections.

Real-Life Examples

Learning from Successful Businesses

To illustrate the practical application of business plans and feasibility studies, let’s explore a few real-world case studies:

Case Study 1: Tech Startup : A technology startup conducts a feasibility study to assess the demand for its innovative product. The study reveals strong market interest, leading the startup to create a business plan focused on market expansion and revenue growth.
Case Study 2: Restaurant Chain : A restaurant chain plans to expand into a new region. A feasibility study helps determine the viability of the expansion, considering factors like competition and consumer preferences. Subsequently, the business plan outlines the specifics of the expansion, including location, marketing strategies, and financial projections.
Case Study 3: Manufacturing Company : A manufacturing company conducts a feasibility study to explore the possibility of adopting new technology to improve efficiency. The study reveals that the technology is feasible and financially viable. A business plan is then developed to guide the implementation of the new technology, detailing the required resources and the expected impact on production.

“The Difference Between a Business Plan and a Feasibility Study” is not just a matter of paperwork; it’s a fundamental decision that can shape the future of your business. While both tools are critical, it’s essential to recognize their distinct purposes and when to employ them. The key is to leverage the insights from a feasibility study to inform the development of a robust business plan.

In your entrepreneurial journey, you may find that a hybrid approach that combines elements of both business plans and feasibility studies works best for your business. The critical factor is to maintain flexibility and be open to adjusting your planning strategy as your business evolves.

In summary, a feasibility study is the compass that guides you toward viable business concepts, while a business plan is the roadmap that leads you to your destination. Together, they form a powerful combination that can set your business on the path to success.

If you’re unsure about how to approach a feasibility study or develop a business plan for your specific business idea, seek professional guidance. Contact us at Dayo Adetiloye Business Hub via [email protected] or [email protected]. or give us a call at 08105636015, 08076359735 and 08113205312 to access expert assistance and take your business idea to the next level. Making the right decisions today can have a profound impact on the success of your business tomorrow.

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Difference Between a Feasibility Study Report and a Business Plan

By: Author Tony Martins Ajaero

Home » Starting a Business » Conduct Feasibility Study

Is a feasibility report the same as a business plan? What’s the difference between a feasibility study report and a business plan? Can a feasibility report be converted to a small business plan?

One of the ways to ensure that you start your business on a promising note is to make sure you have a workable business plan and you also have a comprehensive feasibility study report. With that in place, you will be able to predict how the business will perform in one, two, three years, and beyond.

In this article, we will look at the difference between a feasibility study report and a business plan. We will also look at how you can use these business documents to your advantage if you plan to start a business or if you want to scale up your business.

What is a Feasibility Study Report?

A feasibility report is a report that assesses a group of potential project pathways or solutions to see if they are viable. The person who writes a feasibility report assesses the feasibility of several ideas and then makes a suggestion for the best alternative.

Companies frequently face difficulties that can be solved using a variety of approaches, and it is critical that they select the optimal one. A feasibility report can assist you in evaluating the viability of several options in order to select the best one. If your organization wants to determine the best path for a project or solution to an issue, knowing how to write a feasibility report can help.

What is a Business Plan?

A business plan is an outline of the strategy of a business that outlines its goals and plans for accomplishing them. It includes a go-to-market strategy, financial estimates, market research, a corporate purpose, and a mission statement. Schedule and key personnel accountable for completing the goals may also be mentioned in the business plan.

A business plan serves three functions: It summarizes the organization’s strategy in order to execute it over time, attracts funding from investors, and assists in forecasting future business demands.

Please keep in mind that there is no one-size-fits-all business plan because there are so many different enterprises on the market today. Every organization, from startups with just one founder to historic household names, requires a business plan.

What are the Differences Between a Feasibility Study Report and a Business Plan?

1. A feasibility study is carried out with the aim of finding out the workability and profitability of a business venture. Before anything is invested in a new business venture, a feasibility study is carried out to know if the business venture is worth the time, effort and resources.

On the other hand, a business plan is developed only after it has been established that a business opportunity exist and the venture is about to commence. This simply means that a business plan is prepared after a feasibility study has been conducted.

2. A feasibility report is filled with calculations, analysis and estimated projections of a business opportunity. While a business plan is made up of mostly tactics and strategies to be implemented in other to start and grow the business.

3. A feasibility study is all about business idea viability while a business plan deals with business growth plan and sustainability.

4. A feasibility study report reveals the profit potential of a business idea or opportunity to the entrepreneur, while a business plan helps the entrepreneur raise the needed startup capital from investors.

5. A feasibility study report is used to determine the sustainability of a company idea or project before launching it, whereas a business plan is used to explain the strategy and operations of an existing or new business.

6. A feasibility study report focuses on one aspect of a business idea or project, such as market analysis, technical feasibility, financial feasibility, or organizational feasibility, whereas a business plan covers a broader range of topics, such as market research, marketing strategy, operations plan, financial projections, and management structure.

7. A feasibility study report is normally written for internal use by the business owner, stakeholders, or investors to assess the possible risks and rewards of a business idea or project, whereas a business plan is typically prepared for external use in order to attract finance, partners, or customers.

8. A feasibility study report may be more informal and structured as a report or presentation, whereas a business plan is often more formal and structured as a written document with a defined format.

9. A feasibility study report is normally produced before a business plan and may take less time to complete, but a business plan is an ongoing document that is updated on a regular basis to reflect changes in the business environment.

It’s also worthwhile to know that a feasibility report can readily be converted to a business plan. To achieve this, all you need to do is incorporate your business strategies and tactics into the feasibility report; and you are good to go.

In conclusion,

Paying attention to these two key business documents (Feasibility Study Report and Business Plan) is what is expected of every entrepreneur or investor who truly wants to become successful with their business.

As a matter of fact, we usually advise entrepreneurs to hire business consultants who are specialized in writing Feasibility Studies and Business Plans to help them prepare a workable document (Feasibility Study Report and Business Plan). With that, you can be assured that your business will be starting on the right footing.

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The difference between a feasibility study & a business plan

How much wood would a woodchuck chuck if a woodchuck could chuck wood? How much would the wood cost and how dependable is supply? Does the wood have a “best by” date? How long would it take to do the chucking? And what about woodchuck retention, it is a tough market out there.

If there are wood chucking businesses (and we do have a client that clears and hauls felled trees and wood debris), they might want to consider a feasibility study and business plan before diving into an expansion or other major project. Feasibility studies and business plans are commonly needed (or required) for analysis and decision purposes such as the launch of a new business line, product or service line expansions, geographic expansion, or attracting capital. Likewise, target readers range from boards of directors for project approval purposes, management for internal planning, lenders or potential investors, grant or other assistance programs, and a number of others.

But what are the differences between a feasibility study and a business plan, and how do the two relate? A business feasibility study is a detailed analysis of the viability of an idea or concept for a business venture. Once feasibility has been determined, a business plan documents the operational and financial objectives of the venture and the detailed plans to achieve them. In short, a business feasibility study can be looked at as “Can we?” while the business plan is “How to.”

It is common for the “can we?” and “how to” assessments of a project to be combined into one document, but many key aspects of feasibility should be determined before diving too deep into the “how to” of a venture.

Some years ago we did a feasibility study for a large California dairy operation seeking to grow returns by introducing value-added products rather than strictly selling bulk fluid milk. The idea? Homogenize and pasteurize their own milk (some in flavors), put it in glass bottles, and deliver it to people’s doorsteps.

After I got over my shock, we set about exploring key aspects of feasibility: Is there demand for it, and at what price points? What would it take for the company to successfully make and bottle the products? How would it be marketed? Can bottles be returned and sanitized sufficiently for safe re-use?

As you might imagine, there was not much industry data to lean on; Nielsen and IRI have no market data for home delivered milk, there are no trade associations for the home milk delivery business, and not a lot of equipment and bottle suppliers focus on that niche of the otherwise huge dairy industry.

It was a challenge. We designed a market survey and partnered with the marketing program of a local community college to take consumer surveys at farmers’ markets and other events to determine potential market interest and price points. We contacted some of the few similar operations we could find in the United States. We looked into the availability of bottles approved for both milk and multiple re-use.

Ultimately, we found the project feasible, and with this assurance developed a business plan to lay out the “how to-s.” In the years since, the company has been a great success with stunning growth.

Tempting as it may be to dive straight into the “how to,” unless you have other supportable reasons to believe a project is feasible from such key aspects as demand, production, distribution, marketing, capital, and a thorough risk assessment, it is best to spend some time determining “Can we?”

I tell our business feasibility study clients that one result they should be prepared for is “not feasible.” It happens, but it’s still a lot less trouble and risky than jumping in without due diligence. Morrison has conducted feasibility studies and business plans for nearly 20 years for a wide variety of needs and intended readers. We’re always happy to bounce around ideas and help explore what might – or might not – work for a business’s needs.

Brent Morrison is the Founding Principal at Morrison. To get in touch with Brent, please find contact information for Morrison here .

We’ve worked with a wide variety of clients on a broad range of projects and are happy to discuss solutions that can best fit your needs.

Difference Between a Feasibility Study and a Business Plan

The main difference between a feasibility study and a business plan is that a feasibility study is conducted to assess the viability of a proposed project or venture before significant resources are invested, focusing on analyzing various aspects such as economic, legal, technical, and scheduling considerations. In contrast, a business plan is a comprehensive document that outlines a company’s strategy, goals, market analysis, financial projections, and operational plans, used primarily for executing and managing the business, as well as for attracting investors and lenders.

Table of Contents

What is a Feasibility Study and What is a Business Plan

Feasibility Study refers to an analysis and evaluation of a proposed project to determine if it is technically feasible, economically viable, and legally permissible. It is usually conducted before significant investments are made to understand the likelihood of the project’s success. The feasibility study considers various factors, including market research, technical requirements, legal constraints, financial modeling, and risk assessment. The purpose of this study is to ascertain the strengths and weaknesses of a proposed venture, opportunities and threats present in the environment, the resources required, and ultimately the prospects for success.

Business Pl a n, on the other hand, is a detailed plan of how a business will operate and achieve its goals. It serves as a roadmap for the business, detailing the strategy, target market, competition, marketing and sales strategies, organizational structure, and financial projections. A business plan is essential for both new and established businesses. It helps in securing funding from investors or banks, guiding the management team in making strategic decisions, and monitoring the progress of the business. Business plans are dynamic documents that should be updated regularly as the business grows and market conditions change.

Key Differences Between a Feasibility Study and a Business Plan

Purpose and Focus : A feasibility study is conducted to evaluate the viability of a project before significant resources are committed, whereas a business plan is used for the execution and ongoing management of a business.
Scope of Analysis : Feasibility studies typically have a narrower focus, examining specific aspects like economic viability and technical requirements, while business plans provide a comprehensive overview of the entire business operation.
Timing : A feasibility study is often conducted before a business plan, helping to decide whether or not to proceed with the business idea.
Audience : Feasibility studies are usually intended for internal decision-making, while business plans are often created with external stakeholders, such as investors and lenders, in mind.
Content : A feasibility study includes detailed analysis on viability aspects, whereas a business plan includes broader information like marketing strategies, organizational structure, and financial forecasts.
Use in Decision Making : Feasibility studies are used to make go/no-go decisions on a project, while business plans are used to guide the operational, financial, and marketing decisions of a business.

Key Similarities Between a Feasibility Study and a Business Plan

Planning Tools : Both are essential planning tools used in the decision-making process of starting or managing a business or project .
Research-Based : Both require extensive research and analysis of the market, competition, and internal capabilities.
Risk Assessment : Both involve assessing risks and identifying potential challenges and opportunities.
Financial Considerations : Both include financial analysis, although the focus and depth may vary.
Goal Orientation : Both are oriented towards achieving specific goals – whether it’s determining the viability of a project or outlining the strategy for a business.
Dynamic Documents : Both should be considered dynamic documents that can be revised and updated as new information becomes available or circumstances change.

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Difference between Feasibility Study and Business Plan

Entrepreneurs face many challenges when creating a new venture. Although the business plan is one of the most well-known documents, the feasibility study may be just as important. Before the entrepreneur can seek funding, he or she must demonstrate that the idea is truly a good one.

Rochester.edu explained that a feasibility study, “can be defined as a controlled process for identifying problems and opportunities, determining objectives, describing situations, defining successful outcomes, and assessing the range of costs and benefits associated with several alternatives for solving a problem.”

In order to create a feasibility study, entrepreneurs need to define dimensions of business viability including: market viability, technical viability, business model viability, management model viability, economic and financial model viability, and exit strategy viability.

A good outline for a feasibility study includes:

Introduction
Product or Service
Market Environment
Competition
Business Model
Market and Sales Strategy
Production Operations Requirements
Management and Personnel Requirements
Regulations and Environmental Issues
Critical Risk Factors
Financial Predictions Including: Balance Sheet, Income Statement, Cash Flow Statement, Break Even Analysis, and Capital Requirements

A feasibility study is not the same thing as a business plan. The feasibility study would be completed prior to the business plan. The feasibility study helps determine whether an idea or business is a viable option. The business plan is developed after the business opportunity is created. StrategicBusinessTeam.com explained, “A feasibility study is carried out with the aim of finding out the workability and profitability of a business venture. Before anything is invested in a new business venture, a feasibility study is carried out to know if the business venture is worth the time, effort and resources. A feasibility study is filled with calculations, analysis and estimated projections while a business plan is made up of mostly tactics and strategies to be implemented in other to grow the business.”

While it may seem the feasibility study is similar in many ways to the business plan, it is important to keep in mind that the feasibility study is developed prior to the venture. StrategicBusinessStream pointed out that “a feasibility study can readily be converted to a business plan.” It’s important to think of the business plan in terms of growth and sustainability and the feasibility study in terms of idea viability.

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Difference Between Feasibility Study, Business Plan, And Business Proposal

Here is the difference between a feasibility study report and a business plan ? Can a feasibility study report be converted to a business plan? Find out.

DIFFERENCE BETWEEN FEASIBILITY STUDY AND BUSINESS PLAN SAMPLE

In the course of the article, we will be highlighting the major differences between business plan, business proposal and feasibility study .

RELATIONSHIP BETWEEN FEASIBILITY STUDY AND BUSINESS PLAN AND PROPOSAL

A business plan, business proposal and a feasibility study are all analysis and tools utilised for decision making by organizations.

In as much as the 3 tools can be utilised alongside one another in decision making processes, they have their differences and they seem to target and tackle different processes.

DEFINITIONS

WHAT IS A BUSINESS PLAN?

A business plan can be considered to be that document that highlights a concise description of how a business is established. The business plan is usually a 5-year plan of a particular business and it shows the company structure, market finding and analysis, products and services, marketing strategy and financial projections.

WHAT IS A BUSINESS PROPOSAL?

A business proposal can be considered to be a sales document that is drafted to highlight how a particular project will be carried out, estimate the value of the project to the client and then seeks the client’s involvement in the business. The business proposal is usually document that an organization submits to another organization to effect a business arrangement.

WHAT IS A FEASIBILITY STUDY

A feasibility study is considered to be that document that is drafted with the purpose of finding out how workable and profitable a business venture will be. Before any action is taken in a business, it is the feasibility study that will determine if the business will be worth the time, resources and efforts.

COMPARING BUSINESS PLAN VS FEASIBILITY STUDY

The differences between a business plan, business proposal and feasibility study can be categorised into 2

The reason or purpose of the write-up
The structure or element of the write-up

DIFFERENCES IN TERMS OF REASONS OR PURPOSE

REASONS FOR A BUSINESS PLAN

A reason why a business plan is written out in a business is to to document the vision of the business and the steps that will be taken to accomplish the vision. A typical business plan will contain the financial projections of the cost of the business and also give an estimation of the revenues that the business will generated.

The purpose of the business plan is to provide a concise explanation of the business to be utilised by the potential investors, employees, suppliers, attorneys, accountants and any other set of people that will need a quick and comprehensive knowledge of what the organization does and its ability to achieve success

REASON FOR A BUSINESS PROPOSAL

A business proposal, most of the times, is an unsolicited business ideas that is presented to another business entity or they may be a response to requests made by a potential client to your company. The scope of a business proposal is quite limited to a particular project. In fact, we can say the major reason for a business proposal is to request for a business opportunity.

REASON FOR A FEASIBILITY STUDY

Feasibility is most of the times carried out with the purpose of finding out the profitability and workability of a business idea. Unlike a business plan, a feasibility study is always filled with calculations and estimated projections for a project.

DIFFERENCES IN TERMS OF STRUCTURE

STRUCTURE OF A BUSINESS PLAN

A business plan comprises of 3 major elements:

A detailed description of the business model
The marketing model
And the financial projection

Other information sections of the business plan will include the executive summary, description of the business, competitive analysis, marketing model, operations plan, financial information and projections. These are the structures of a typical business plan

STRUCTURE OF A BUSINESS PROPOSAL

A business proposal that is written as a response to an RFP must follow the format that is requested in the RFP. The structure of the business proposal will involve a description of the services your company renders that are relevant to the goals that are specified in the RFP.

Your business proposal will also comprise of the answers to the specific questions that are asked in the RFP and a quote on the information about the materials, labour, tools, delivery and other costs that will be incurred in the course of the project.

STRUCTURE OF A FEASIBILITY STUDY

The activities for creating the feasibility study for a business venture are general in nature and are quite applicable to all kinds of businesses or projects irrespective of the technicalities involved in the running of the project.

The basic structures of a feasibility study will be:

The scope of the project, which will be used to describe the problems of the business and the opportunities
The current analysis is used to understand the current methodologies that will be utilised in the implementation of the project.
The requirements of the projects. These depend on the object of the project’s attention
The approach can be considered to be the prescribed solution to satisfy the requirement. On the approach, various alternatives can be considered and detailed explanations on why the solution is preferred to other solutions highlighted.
Evaluation will examine the cost efficiency of the approach that is selected. This starts with the analysis of the estimated cost of the entire project.
Review is then done to assemble all the elements into the feasibility study. The review has two different purposes.
To initiate a project decision, which will be either to approve or reject the project or better still, ask that the project be revised before a final decision is made
To ensure that the feasibility study is thorough and accurate.

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Business Plan Vs. Feasibility Study

Before starting a business, you will perform a feasibility study to ensure that it is feasible or appropriate when you have an idea for a business. On the other hand, is the creation of this business worth your time, efforts, and money? Various professionals can contribute to the study, such as accountants, successful entrepreneurs, and realtors who advise on location and pricing and compare similar companies in the area. A business plan outline shows how the company will work. We assume that your feasibility study has been completed and that it has been determined that the idea is viable. Now you will define your financial and other objectives, methods to achieve them, and organizational structures.

Consider the similarities: Comparison of feasibility studies and business plans is important because both are used in different ways to create profitable businesses. The similarities between the two documents include

· The timing: The two activities begin before the start of the business and can be repeated later to determine the next step for future ideas.

· Input: Both involve input from individuals and departments with different skills.

· Format: Both documents include other documents pulled together to write the report.

· Components: Some of the analysed questions are similar, including the examination of the target market, market conditions and financial costs

· Use: Both help the management of the organization make decisions and can be shown to potential investors.

Understanding the differences is equally important to understand the differences between feasibility studies and business plans. They are not the same and neither can be replaced by the other. The differences are as follows:

· Product demand: Do you need or want your product or service? Does the need already exist or is there space for another product?

· Market conditions: Who would buy your product and where is it? Can you serve their location? Market saturation or need to add space?

· Pricing: What is the current user's pricing of similar products? What do you need to charge to make your business profitable, and consumers will pay the price?

· Risk: What is the risk associated with your idea?

· Probability of success: Are you able to overcome risk in order to maximize profit?

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A feasibility study is an analysis of whether a business idea is practical and viable , while a business plan outlines the strategy and operations of a business in detail. Essentially, a feasibility study is a precursor to a business plan, helping to determine whether the business idea is worth pursuing before investing time and resources into developing a full plan.

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Picture of a man making notes on a paper

A feasibility study is an analysis of the viability of an idea, proposal, or concept. It assesses the likelihood that a project will be successful in meeting its objectives and goals, and whether it is worth pursuing.

A feasibility study is not the same as a business plan. A business plan is a document that outlines the financial and operational goals of a business. It includes information on the company’s products or services, marketing strategy, and target market.

A feasibility study looks at all aspects of a proposed project, including technical feasibility, financial feasibility, and operational feasibility. It is used to determine whether a project is worth pursuing and to identify any potential risks or limitations.

Technical feasibility looks at whether a proposed project can be completed with the available resources. This includes evaluating the technical requirements, such as hardware and software requirements, and assessing whether these can be met. Financial feasibility looks at whether a proposed project is financially viable. This includes assessing the costs and benefits of the project, as well as any potential sources of funding. Operational feasibility looks at whether a proposed project can be completed successfully within the given constraints. This includes evaluating the resources required for the project and assessing whether they are available.

The goal of a feasibility study is to identify any potential problems with a proposed project so that they can be addressed before moving forward. By doing this, it increases the chances of success for the project overall.

(Photo by Jason Goodman on Unsplash )

A business plan is a comprehensive document that outlines the strategy, operations, and financial projections for a business. It typically includes information on the company’s products or services, target market, competition, marketing and sales strategies, management team, and financial projections.

A well-written business plan is an important tool for entrepreneurs and business owners, as it provides a roadmap for the future of the business and helps to secure funding from investors or lenders. It allows the business owner to clearly articulate their vision and goals, and to identify potential challenges and opportunities.

The key components of a business plan typically include an executive summary , company description, market analysis, marketing and sales strategy, management and organization, product or service line, financial projections, and funding request.

The executive summary provides an overview of the business plan, highlighting the key points and objectives. The company description provides background information on the business, including its history , mission, and goals. The market analysis outlines the target market, competition, and industry trends. The marketing and sales strategy describes how the business will reach and engage customers. The management and organization section details the management team and organizational structure of the business. The product or service line outlines the products or services the business will offer. The financial projections include income statements, balance sheets, and cash flow statements. Finally, the funding request outlines the amount of funding needed and how it will be used.

Overall, a business plan is a critical document for any business, providing a roadmap for success and a way to attract funding and support from investors and lenders.

Purpose: A feasibility study is conducted to determine whether a business idea is practical and viable, while a business plan is developed to outline the strategy, operations, and financial projections for a business.

Scope : A feasibility study is a preliminary analysis that focuses on the market, technical, and financial feasibility of a business idea, while a business plan is a comprehensive document that covers all aspects of a business, including its products or services, target market, competition, marketing and sales strategies, management team, and financial projections.

Timing : A feasibility study is typically conducted before developing a business plan to determine whether the business idea is worth pursuing, while a business plan is developed once the decision to proceed with the business has been made.

Audience : A feasibility study is primarily used to inform the entrepreneur or management team about the viability of the business idea, while a business plan is used to secure funding from investors or lenders.

Level of detail : A feasibility study provides a high-level analysis of the business idea, while a business plan provides a detailed roadmap for the future of the business, including its marketing and sales strategies, management team, and financial projections.

A feasibility study is typically used when starting a new business or venture, and its purpose is to determine if the proposed business idea is viable. A feasibility study will assess the market potential, technical feasibility, and financial viability of the proposed business. It is important to note that a feasibility study is not the same as a business plan; rather, it is one tool that can be used in developing a business plan.

In contrast, a business plan is typically used once a business has already been established. Its purpose is to outline the company’s strategy for achieving its goals and objectives. Unlike a feasibility study, which assesses the viability of a proposed idea, a business plan focuses on an existing businesses’ ability to execute its strategy and achieve its goals.

A feasibility study is an analysis of whether a proposed project is likely to be successful. A business plan is a more detailed document that outlines the specifics of the business, such as its products or services, marketing strategy, and financial projections.

Creating a feasibility study typically requires four main steps:

Define the problem or opportunity. This step includes understanding the needs of the potential customer or client.
Research and gather data. This step includes secondary research, such as market analysis and industry trends, as well as primary research, such as customer surveys or interviews.
Analyze the data and make recommendations. This step includes determining whether the problem or opportunity can be solved and whether the proposed project is likely to be successful.
Prepare a written report . This step includes documenting the findings of the feasibility study in a clear and concise manner.

Creating a business plan can seem like a daunting task, but it doesn’t have to be. You can start by doing some research and then outlining your goals and objectives. Once you have a good understanding of what you want to achieve, you can start putting together a more detailed plan.

There are a few key things that should be included in any business plan:

An executive summary. This is a brief overview of your business and what you hope to accomplish.
A description of your product or service. What are you offering and why do your customers need it?
A marketing plan. How will you reach your target market and what strategies will you use to promote your product or service?
A financial plan. What are your revenue and expense projections? How much money do you need to get started or to keep your business running?
An operational plan. What are the day-to-day details of running your business? Who will handle what tasks?
A risk management plan. What could go wrong and how will you handle it if it does?

Market Feasibility

A market feasibility study assesses the potential for a product or service to be successful in a given market. It takes into account multiple factors such as the size of the target market, growth trends, competitor analysis, and customer needs and buying habits. This type of feasibility study is important for businesses to understand whether there is a demand for their product or service in the marketplace.

Technical Feasibility

A technical feasibility study assesses the ability of a business to successfully develop and implement a proposed solution. This includes assessing the technical risks involved, as well as ensuring that the necessary resources (e.g., personnel, equipment) are available. A technical feasibility study is important to determine whether a proposed solution is achievable and will meet the needs of the business.

Financial Feasibility

A financial feasibility study assesses the potential financial impact of a proposed solution. This includes an assessment of the costs and benefits of implementing the solution, as well as any potential risks and uncertainties associated with it. A financial feasibility study is important to determine whether a proposed solution is financially viable and will have a positive impact on the business’s bottom line.

Managerial Feasibility

A managerial feasibility study assesses the ability of management to successfully develop and implement a proposed solution. This includes an assessment of management’s experience, skills,

There are three types of business plans :

Internal business plan

An internal business plan is a document that outlines the company’s strategy for achieving its objectives. It is typically created by the company’s management team and is not shared with outsiders.

External business plan

An external business plan is a document that is shared with outsiders, such as investors, potential partners, and customers. Its purpose is to persuasively communicate the company’s strategy and how it will achieve its objectives.

Hybrid business plan

A hybrid business plan combines elements of both an internal and an external business plan. It typically includes a high-level overview of the company’s strategy that can be shared with outsiders, as well as more detailed information on operational matters that is meant for internal use only.

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What is a Feasibility Study and its Importance?

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A Feasibility Study is a crucial assessment that is during Project Management conducted to determine the viability and potential success of a project. By thoroughly examining such factors, stakeholders can make informed decisions regarding the project’s feasibility. Apart from the technical and financial considerations, this study ensures a project’s compliance with relevant laws, regulations and industry standards. To give you a better overview, this blog will talk about the multiple aspects associated with this. So, let’s dive in to comprehend the significance of a Feasibility Study. After reading this blog, stakeholders can make well-informed decisions that enhance the chances of a project’s success.

Table of Contents

1) Feasibility Study - An overview

2) Importance of a Feasibility Study

3) Types of Feasibility Studies

4) What is included in a Feasibility Study report?

5) Examples of a Feasibility Study

6) Seven steps to do a Feasibility Study

7) Conclusion

Feasibility Study - An overview

A Feasibility Study is an initial investigation into the potential benefits and viability of a project or endeavour. An impartial appraisal that looks at a project's technical, financial, legal, and environmental elements is what this study provides.

Importance of a Feasibility Study

A Feasibility Study may reveal novel concepts that fundamentally alter the Scope of a Project. Feasibility Studies are of the greatest importance in the decision-making process when it comes to projects, businesses, and investments. They are mostly structured assessments that are focused on various aspects of a proposed project`s Feasibility. The following are some of its advantages:

a) Increases the focus of project teams

b) Finds fresh opportunities

c) Gives important information to help make a "go/no-go" choice.

d) Reduces the number of available business options

e) Finds a good cause to start the project

f) Increases the success rate through the assessment of several factors

g) Assists in making project decisions

h) Identifies grounds for not moving forward

Types of Feasibility Studies

There are several types of Feasibility Studies, each aimed at a particular objective, and together, they provide a complete assessment of the project's worthiness. Let's delve into five distinct types of Feasibility Studies:

Technical Feasibility Study

A technical Feasibility Study aims to verify whether the organisation is eligible to use its technical in-house resources and expertise to perform successfully. This assessment involves scrutinising various aspects, including the following:

a) Production capacity: Does the company have the resource base to produce that number of products and services for the customers?

b) Facility needs: Will today’s facilities fulfil the standards required, or will new facilities be constructed?

c) Raw materials and supply chain: Are there enough purchases, and have the organisation maintained a supply chain?

d) Regulatory compliance: Does the Project Execution follow the relevant guidelines and professionals bear the relevant certifications to meet the requirements and the industry standards?

Economic Feasibility Study

It is a financial Feasibility Study that primarily examines the project's financial viability. The economic Feasibility Study typically involves several steps:

a) Determining capital requirements: Calculate funding collection, overhead, and other capital.

b) Cost breakdown: Determining and listing all the project costs including the purchase of materials, hardware, labour, and overheard costs are too.

c) Funding sources: Trying out a variety of possible solutions like banks, stakes, or grants.

d) Revenue projection: By using prediction tools such as a cost-benefit analysis or business forecasting to get the level of income, return on investment and profit margin.

e) Financial analysis: Projecting the performance of the Project based on means that are related to a financial analysis and are characterised by the utilisation of such things as cash flow statements, balance sheets and financial projections.

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Operational Feasibility Study

An operational Feasibility Study looks at how effectively a product will meet its needs. It also talks about how easy it will be to use and maintain once it is in place. In addition, this study enumerates the necessity of evaluating a product's utility and the response and suggestions of application development team. Scheduling Feasibility Study

Proposed project schedules and deadlines are the main subject of a scheduling a Feasibility Study. This evaluation concerns how long team members will need to complete the project. It also highly impacts the business because if the programme isn't finished on time, the planned result might not be realised.Acquire the necessary skills to effectively deliver projects by signing up for our Project Management Office Fundamentals Training now!

What is included in a Feasibility Study report?

You should make a Feasibility Study report before starting a project. This way you can analyse if your business idea is really viable and will bring you success. When you conduct this study, you would have to consider lots of factors such as if the people are going to buy your product or service, how much competition is out there, if the company can afford it and so on.

The Feasibility Study must include things like how much technology and resources you need and how much you can hope to earn from your investment. The results of this study are put together in a report, which usually includes the following sections:

a) Executive summary

b) Approach to marketing

c) Organisation/staffing

Examples of a Feasibility Study

Feasibility Study has helped decide if big ideas can work. Here are two examples:

University Science Building Upgrade

This example is about a university that wanted to upgrade its old science building from the 1970s. They thought it was outdated and needed a change. To implement this, they evaluated different options and determined how much they would approximately cost. Some people were worried about the project being too expensive or its potential to causeissues in the community. The study also analysed what technology the new building would require, and how effectively it would help students, and also, if it would attract more students.

Along with this, they looked at the financial aspect too, as to how they would sponsor for it and if they would make more money from having additional students. The study showed that the project could work, so they went ahead with the upgrade.

High-speed Rail Project

This example is timed when the Washington State Department of Transportation wanted to see if they could build a fast train connecting Vancouver, Seattle, and Portland. To initiate this, they first focused on how to make decisions about the project in the future.

They discussed it with several people and groups to ensure everyone was okay with the plan. Later, they looked at how to pay for it and thought it would cost between $24 billion and $42 billion. They would get money from the government and maybe from loans and investors.

The study showed that the train could bring lots of good things like better jobs and less traffic. They started looking into this in 2016 and finished the study in 2020. They then shared the report with the government.

Seven steps to do a Feasibility Study

As Feasibility Study is a crucial step in determining a potential of a project, it involves a substantial period of time and resources. ALet’s take you through some of the steps involved in the following points:

1) Do a preliminary analysis and define the scope of the study

Before going through a Feasibility Study, it is wise that you do just one small check. The time and resources involved in Feasibility Studies may be burdensome; hence, it is imperative to determine if it is worth it as early as possible.

Through this form, one can establish whether the study holds awarding potential and who else should be involved on a higher level. You further this stage by answering questions like what you might win, what pitfalls you will face, and what you need for the success of the project.

2) Prepare a projected income statement

First, while doing a Feasibility Study, you should obtain the income statement projection. In this, the statement calculates earnings and expenditures in subsequent one-year amounts. It is made up of the sum of what you will surely get and the cost you will need to cover.

Smaller businesses tend to need marketing strategies to grow into bigger companies. These facts are extremely important because they help business owners make smart decisions regarding the stage of the business.

3) Carry out market research

Market research is of paramount importance or, naturally, it will be of no use when developing the Feasibility Study. Primarily, it operates to ascertain the viability of the project. This point tells you time, which gives you knowledge of the current market state: Who your customers are, who your competitors are, how big the market is, and how many of it you could have. One way of doing this market research is by asking people questions, referring to experts, and checking very broad social media and other public info to find out what's going on.

4) Organisation and operations plan

Once you've figured out how the market behaves and the scope of your organisation, you can draft the setup of your plan. The detailed work plan for the project will provide the answer to how it will work in a practical form. It tests three aspects of your project, like whether it can be run, whether it is cost-effective, whether it complies with the law, and whether the technology fits.

This is to help you comprehend everything you can do and what you may require to get this project going, for example, the equipment, the materials to start the project, additional costs, and if you need to hire or train people. If you need to, you may make that change if the information you have brought is enough.

5) Calculate and prepare the initial balance of expected revenue and expenses

In this step, you must be expert in handling things from the financial part. You’ll make estimates on how much you may initially spend starting up your project, and then how much your project could make and spend based on that estimate. Among the many issues involved are such as the amount of money you are receiving from your customers, money you owe to others and assets that you own.

Fixed costs, such as variable costs that will change based on the number of goods you produce, and equipment costs also need to be factored in money you may borrow or pay for land and service other companies. Keeping this in mind, you should also consider your business’ off seasons and how much risk you are willing to take. These calculations save a lot of time and effort and can be used to answer the most difficult questions of Feasibility.

6) Review and analyse all data

After going through all the steps, it's crucial to do a thorough review and analysis. This helps ensure that everything is in order and there's nothing that needs adjusting. Take a moment to carefully look back at your work, including the income statement, and compare it with your expenses and debts. Ask yourself: Does everything still seem realistic?

This is also the perfect opportunity to consider any risks that might come up and create contingency plans to handle them. By doing this, you'll be better prepared for any unexpected challenges that may arise.

7) Make a go/No-go decision

Now, it's time to decide if the project can work. This might seem simple, but all the work you've done so far leads up to this moment of decision-making. Before making the final call, there are a few more things to think about. First, consider if the project is worth the time, effort, and money you'll be putting into it. Is the commitment worth it?

Secondly, think about whether the project fits with what your organisation wants to achieve in the long run. Does it align with the organisation’s strategic goals and plans? These factors are essential to consider before making your decision.

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Conclusion

You are now more familiar with how a well-executed Feasibility Study is a cornerstone of informed decision-making in Project Management and business ventures. It acts as a critical guide, helping organisations assess the practicality and viability of their initiatives, ultimately minimising risks and increasing the likelihood of success.

Frequently Asked Questions

Employers value skills like analysis, problem-solving, attention to detail, and communication in Feasibility Study specialists. They need to be good at crunching numbers, finding solutions, and explaining complex ideas clearly.

Many industries need expertise in Feasibility Studies, like Construction, Healthcare, Tech, and more. It helps decide if projects are doable.

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The Knowledge Academy offers various Project Management Courses , including Introduction to Project Management Certification Course and Project Management Masterclass. These courses cater to different skill levels, providing comprehensive insights into Project Resource Management .

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Difference between Feasibility Study and Business Plan

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Feasibility Study and Business Plan are essential tools in the business development process. They serve different purposes and are conducted at different stages. A feasibility study helps determine the viability of a business idea; whereas, a business plan provides a detailed roadmap for executing that idea and achieving business goals.

Difference-Between-Feasibility-Study-and-Business-Plan-copy

What is a Feasibility Study?

A feasibility study is a comprehensive assessment conducted at the early stages of a business idea or project to evaluate its potential viability and identify potential risks and challenges. The primary purpose of a feasibility study is to determine whether the proposed business venture is feasible and worth pursuing further.

Features of the Feasibility Study are:

Market Analysis: Feasibility Study evaluates the target market , including its size, growth potential, demographics, and competition. This involves researching customer needs, preferences, and behavior to assess demand for the proposed product or service .
Technical Feasibility: A feasibility study assesses the technical requirements and capabilities needed to develop and deliver the product or service. This may involve evaluating technology, equipment, facilities, and expertise required for production or implementation.
Financial Feasibility: A feasibility study conducts financial analysis to estimate the costs involved in starting and operating the business, as well as potential revenue and profitability. This includes preparing financial projections, such as income statements , cash flow statements , and Return on Investment (ROI) calculations.

What is a Business Plan?

A business plan is a comprehensive document that outlines the goals, strategies, operations, and financial projections of a business. It serves as a roadmap for the organization’s future direction and provides a detailed blueprint for how the business will be structured, managed, and operated.

Features of a Business Plan are:

Executive Summary: A business plan gives a brief overview of the business concept, objectives, products or services offered, target market, competitive advantage, and financial projections.
Company Description: It gives detailed information about the business, including its history, mission statement, vision, values, legal structure, location, and ownership.
Market Analysis: A business plan is formed after analyzing the target market, including its size, growth potential, demographics, buying behavior , market trends, and competition. This section also outlines the business’s market positioning and competitive strategy.

Feasibility Study and Business Plan – FAQs

When should a feasibility study be conducted.

A feasibility study is typically conducted at the early stages of developing a business idea or project, before significant resources are invested. It helps entrepreneurs and stakeholders make informed decisions about whether to proceed with the venture.

Who conducts a feasibility study?

Feasibility Studies are often conducted by entrepreneurs, business owners, project managers, consultants, or other professionals with expertise in the relevant industry or field. They may also involve collaboration with specialists such as market researchers, engineers, financial analysts, and legal advisors.

When should a business plan be developed?

A business plan is typically developed after a feasibility study has been conducted and the decision to move forward with the business venture has been made. It provides a detailed blueprint for executing the business idea and achieving its objectives.

Who uses a business plan?

Business plans are used by entrepreneurs, startups, existing businesses, investors, lenders, partners, employees, and other stakeholders interested in understanding the organization’s goals, strategies, operations, and financial prospects.

What are the benefits of conducting a feasibility study?

Benefits of conducting a feasibility study include minimizing risks, identifying potential challenges and opportunities, validating assumptions, attracting investors or lenders, guiding decision-making , and increasing the likelihood of success for the proposed business venture.

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10 Feasibility study and business plan differences you should know
A feasibility study is concerned with the viability of a business concept, but a business plan is concerned with the development and sustainability of a company. A feasibility report informs the entrepreneur about the profit potential of a company concept or opportunity, whereas a business plan assists the entrepreneur in raising the necessary ...
Feasibility Study vs Business Plan Similarities And Differences
Purpose: While a feasibility study determines the viability of a business idea, a business plan comes after the decision has been made to go ahead with the business. Methodology: In essence, a feasibility study is based significantly on research, while a business plan makes projections into the future. Risks: A feasibility study ascertains the ...
Business Plan Vs. Feasibility Study
Comparing the similarities between feasibility study and business plan is important because both are used in different ways to help you create a profitable business. Similarities between the two ...
Business Plan Vs. Feasibilty Study
Feasibilty Study. Business plans and feasibility studies are analysis and decision-making tools used by companies. Feasibility studies are used to determine whether a proposed action has a high enough probability of success that it should be undertaken. Business plans are blueprints for implementing actions that have already been deemed ...
Difference Between Feasibility Study and Business Plan
Main Purpose of a Business Plan and a Feasibility Study. In short, a feasibility study gives a conclusion or recommendations, while a business plan gives a roadmap. The feasibility study helps determine whether an idea or business is a viable option. Therefore, a feasibility study is done first before investing a dime in the business.
The Difference Between A Feasibility Study And A Business Plan
A business plan is a strategy and tactical document that is prepared after a successful feasibility study has been carried out. It is written based on the results of a feasibility study, and focuses instead on how the business can achieve a successful market penetration and growth. A business plan also contains financial projections, cash flow ...
What is the difference between a feasibility study and a business plan
A business plan outlines your organisation's direction, detailing the approach to achieving set goals, while a feasibility study analyses the viability of a specific business venture before it's initiated. Consider a corporation contemplating a shift to solar power. They begin with a feasibility study, engaging a consultant to evaluate factors ...
Feasibility Studies vs. Business Plans
Much like a business plan, a feasibility study usually has around 4 to 5 chapters that goes in depth for each of the issues that needs to be discussed and examined by the entrepreneur. Foremost, one of the things that these two documents to have in common is at the industry and market research is usually included in both documents. Although ...
Feasibility study: definition, benefits and differences with a Business
Here are the key differences between a feasibility study and a business plan: Differences in Purpose. Feasibility Study: Feasibility studies are conducted in the early stages of project development or business planning. Their primary purpose is to determine whether a proposed project or business idea is viable and should be pursued.
The Difference Between a Business Plan and a Feasibility Study
The insights gained from the feasibility study can inform the development of a comprehensive business plan. The feasibility study's findings on market viability, resource requirements, and potential risks can be integrated into the business plan's strategies and financial projections. Real-Life Examples. Learning from Successful Businesses
Difference Between a Feasibility Study Report and a Business Plan
A feasibility study is all about business idea viability while a business plan deals with business growth plan and sustainability. 4. A feasibility study report reveals the profit potential of a business idea or opportunity to the entrepreneur, while a business plan helps the entrepreneur raise the needed startup capital from investors. 5.
The difference between a feasibility study & a business plan
A business feasibility study is a detailed analysis of the viability of an idea or concept for a business venture. Once feasibility has been determined, a business plan documents the operational and financial objectives of the venture and the detailed plans to achieve them. In short, a business feasibility study can be looked at as "Can we ...
Difference Between a Feasibility Study and a Business Plan
Key Differences Between a Feasibility Study and a Business Plan. Purpose and Focus: A feasibility study is conducted to evaluate the viability of a project before significant resources are committed, whereas a business plan is used for the execution and ongoing management of a business.; Scope of Analysis: Feasibility studies typically have a narrower focus, examining specific aspects like ...
Feasibility Study
A feasibility study is part of the initial design stage of any project/plan. It is conducted in order to objectively uncover the strengths and weaknesses of a proposed project or an existing business. It can help to identify and assess the opportunities and threats present in the natural environment, the resources required for the project, and ...
Difference between Feasibility Study and Business Plan
A feasibility study is filled with calculations, analysis and estimated projections while a business plan is made up of mostly tactics and strategies to be implemented in other to grow the business.". While it may seem the feasibility study is similar in many ways to the business plan, it is important to keep in mind that the feasibility ...
Difference Between Feasibility Study, Business Plan, And ...
The differences between a business plan, business proposal and feasibility study can be categorised into 2. The reason or purpose of the write-up. The structure or element of the write-up. DIFFERENCES IN TERMS OF REASONS OR PURPOSE. REASONS FOR A BUSINESS PLAN.
Business Plan Vs. Feasibility Study
A business plan outline shows how the company will work. We assume that your feasibility study has been completed and that it has been determined that the idea is viable. Now you will define your financial and other objectives, methods to achieve them, and organizational structures.
What is the difference between feasibility study and business plan?
A feasibility study is an analysis of whether a business idea is practical and viable, while a business plan outlines the strategy and operations of a business in detail. Essentially, a feasibility study is a precursor to a business plan, helping to determine whether the business idea is worth pursuing before investing time and resources into developing a full plan.
What is a Feasibility Study: Definition, Types, and Benefits
An effective Feasibility Study is crucial in achieving a goal or decision-making in Project Management and business. It serves as a single and integrated examination to approve a project, startup, or investment by determining if it can be implemented, if it will succeed and if it will be sustainable to operate the project, the startup or the investment.
Feasibility Study or Business Plan: Which Comes First for ...
When starting a new business venture, entrepreneurs are often faced with the question of whether to conduct a feasibility study or create a business plan first. Learn more Accelerate Success ...
Feasibility Study and Business Plan Road-Map
If so, a strategic plan is called and is generally composed of 11 parts as follows: Part 1: Project summary on one page (business model). Part 2: Company Overview (Project). Part 3: The product or ...
Difference between Feasibility Study and Business Plan
Meaning. A feasibility study is conducted at the early stages of a business idea to assess its viability and determine whether it is feasible to pursue further. A business plan is a comprehensive document that outlines the goals, strategies, operations, and financial projections of an existing or proposed business. Focus.
Difference Between Feasibility Study and Business Plan
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