Difference between Feasibility Study and Business Plan

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.

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:

1. 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.
2. 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.
3. 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:

1. 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.
2. Company Description: It gives detailed information about the business, including its history, mission statement, vision, values, legal structure, location, and ownership.
3. 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.

Difference between Feasibility Study and Business Plan

Basis	Feasibility Study	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	It focuses on evaluating the technical, economic, legal, and operational aspects of the proposed business venture.	It serves as a roadmap for the business’s future direction and is typically used to attract investors, secure financing, or guide internal operations.
Scope	A feasibility study typically covers a broad range of factors, including market analysis, competitive environment, technical requirements, regulatory considerations, and preliminary financial projections.	A business plan delves deeper into specific aspects of the business, such as marketing strategies, operational plans, organizational structure, sales forecasts, and detailed financial projections.
Goal	Its goal is to provide a preliminary assessment of whether the business idea is viable.	Its goal is to provide a comprehensive overview of how the business will be structured and operated.
Time	A feasibility study is conducted early in the business development process, often before significant resources are invested.	A business plan is typically developed after a feasibility study has been completed and the decision to move forward with the business idea has been made.
Users	The users for a feasibility study includes entrepreneurs, business owners, and potential investors who are evaluating the viability of a business idea.	The users for a business plan includes investors, lenders, partners, employees, and other stakeholders interested in understanding the company’s objectives, strategies, and financial prospects.
Information	It provides with the information needed to make informed decisions about whether to proceed with the venture.	It provides information which is often used to secure funding or attract partners to the business.

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.