Who Performs the Feasibility Study in project management?

A feasibility study is essentially checking if a project idea or plan could work. To do this, different aspects are analyzed, like if the technology is available, if there’s enough money, if it follows the rules, if it fits with how things are already done, and if it can be completed on time. By looking at all these factors, the study determines if the project is worth pursuing and if it’s likely to succeed. This article focuses on discussing who performs feasibility studies and what it involves.

Importance of Feasibility Study

After the business case is finished, a project feasibility study should be conducted as part of the project management life cycle.

1. Steers project in the right direction: An efficient feasibility study directs a project in the proper direction by providing decision-makers with an in-depth understanding of the possible benefits, drawbacks, obstacles, and limits that may affect the project’s conclusion.
2. Helps to access the benefits of the project: The fundamental purpose of a feasibility study is to determine whether the idea is technically, financially, legally, and commercially viable.

A Feasibility Study Report

A feasibility report, which typically consists of the following components, compiles the results of your project feasibility study.

1. An overview in brief: Concise summary providing a snapshot of the project, outlining its objectives, scope, and significance within a few sentences.
2. An explanation of the good or service: Delineates the nature, purpose, and unique selling points of the proposed product or service, highlighting its potential value in the market.
3. Technology-related issues: Evaluates the technological requirements and challenges associated with the project, addressing key considerations for successful implementation.
4. Marketplace for goods and services: Analyzes the target market, identifying potential customers, competitors, and trends, offering insights into the project’s viability within the current business landscape.
5. Advertising plan: Outlines a strategic approach for promoting and positioning the product or service in the market, including channels, messaging, and anticipated impact on target audiences.
6. Staffing and Organization Schedule: Details the human resource requirements, organizational structure, and a timeline for staffing, ensuring a comprehensive plan for effective project management.
7. monetary estimates: Provides a financial breakdown encompassing costs, revenue projections, and potential return on investment, aiding stakeholders in assessing the financial viability of the project.
8. Results and suggestions: Summarizes the findings from the feasibility study, drawing conclusions and offering actionable recommendations based on the analysis, guiding decision-makers in determining the project’s feasibility.

Who can Perform a Feasibility Study?

In project management, the feasibility study is typically conducted by project team or a specialized feasibility study team. The team may include:

1. Project Managers
2. Subject Matter Experts
3. Financial Analysts
4. Other Relevant Stakeholders.

Feasibility Study Types

When assessing the viability of a project, there are a variety of factors to take into account. You can also undertake various feasibility studies to evaluate your project from various angles.

1. Pre-Feasibility Study

As the name implies, a pre-feasibility study is a procedure that is carried out before the feasibility study. To ascertain whether the project has serious operational, financial, technical, or other evident flaws as soon as possible, decision-makers and subject matter experts will rank various project ideas or approaches in order of priority. If there is merit to the project proposal, a thorough feasibility study will be conducted.

2. Technical Feasibility Study

The goal of a technical feasibility study is to ascertain whether your company possesses the technical know-how and resources needed to complete the project. A technical study aims to determine whether your company possesses the resources required to carry out a project, including raw materials, supply chain, production capacity, and other inputs. You should also take into account other aspects, such as standards or requirements for regulatory compliance for your goods or services, in addition to these production inputs.

3. Economic Feasibility Study

This kind of study, also known as a financial feasibility study, helps you decide if a project is financially feasible. For economic feasibility studies, the following actions are necessary:

• List working capital, seed money, and additional requirements like contingency capital.
• Calculate the amount of labor, equipment, and raw materials that will be needed.
• Classify and identify all project costs using a cost breakdown structure.
• Determine possible sources of funding, such as loans, venture capitalists, or angel investors.
• Create preliminary balance sheets, financial statements, and cash flow statements for financial

4. Legal Feasibility Study

All activities and deliverables within the project scope are subject to laws and regulations, which your project must comply with. Consider the best possible legal structure for your company as well as its investors. Regarding the liability of business owners, every legal structure has pros and cons. For example, corporations and limited liability companies (LLCs) lessen the liability of each business partner.

5. Market Feasibility Study

The viability of your project in the market is ascertained by a market feasibility study. To do this, you must examine the following elements:

• Industry Overview: Evaluate growth from the previous year, pinpoint rivals, and examine market patterns.
• SWOT Analysis: Assess the market’s opportunities, threats, weaknesses, and strengths (operational capabilities).
• Market Research: Assess the viability of the market and the obstacles to entry.

Steps to Ensure an Effective Feasibility Study

1. Perform a Preliminary Investigation

Lay out your project plan first. If there is an unmet need in the market, there is a gap between supply and demand, and the product or service has a clear advantage, these are the areas you should concentrate on. Next, ascertain whether the feasibility factors—such as being too costly or difficult to market—are too high to overcome.

2. Create an Income Statement Projection

To complete this step, you must go backward. Start by estimating the project’s revenue, and then determine what funding is required to reach that target. The basis of an income statement is this. Take into account the services that will be needed, their associated costs, and any changes to revenue that may result from things like reimbursements.

3. Carry out Market Research or a Market Survey

Your feasibility study’s success depends on this step, so conduct the most comprehensive market analysis you can. It is beneficial to hire an outside firm to do it if your organization lacks the resources to do it properly because it is that important.

You can get the best idea of the project’s potential revenues and return on investment by conducting market research. The market’s geographic influence, demographics, competitor analysis, market value, your share, and whether the market is open to expansion (i.e., in response to your offer) are a few factors to take into account.

4. Arrange the Structure and Functions of the Business

After laying the foundation for the preceding steps, the project must be organized and run to satisfy the requirements of technical, operational, economic, and legal feasibility. This is not a superficial, general project. It should be comprehensive and include operating, fixed investment, and startup costs.

These expenses cover things like staff, real estate, equipment, merchandising strategies, overhead, supply availability, etc.

5. Create a Balance Sheet for the Opening Day

As accurate an estimate of the assets and liabilities as feasible should be part of this. Make a list of the items, sources, prices, and financing options to accomplish this. Leasing or buying land, buildings, and equipment, financing for assets, and accounts receivable are examples of liabilities to take into account.

6. Go Over and Examine Every Data

While each of these steps is crucial, the review and analysis are the most crucial to make sure that everything is in its proper place and nothing needs to be adjusted. Give your work one last review at the moment.

Review the earlier stages, like the income statement, and contrast it with your out-of-pocket costs and obligations. Is it still reasonable? This is also the time to consider risk and develop any backup plans.

7. Choose Whether to Proceed or Not

This is where you have to decide if the project can be completed. That may seem straightforward, but every step before it has led to this point of decision-making. Before making that decision, you should also think about whether the commitment is worthwhile in terms of time, money, and effort, and whether it fits in with the organization’s long-term goals and strategic objectives.

The Best Methods for a Feasibility Assessment

1. Use project management tools: Utilize project management tools such as Project Manager to arrange your information and complete tasks quickly and effectively.
2. Use templates: Use any technology or data that provides you with leverage, such as templates.
3. Take opinions: Engage the relevant parties to obtain their opinions.
4. Market research: Market research can help you acquire more data.
5. Make inquiries: Compile your homework and make inquiries to ensure the accuracy of your data.

Now that your project is feasible, the real work can start. Using Project Manager facilitates more effective planning. To prevent delays, our online Gantt chart groups tasks, assigns deadlines, adds priorities, and connects related tasks. However, in contrast to other Gantt software, once you enter the execution phase, we calculate the critical path and establish a baseline to measure project variance.

The feasibility study is a cooperative endeavor that evaluates a proposed project’s viability and practicality by utilizing the experience of multiple people. A diverse team is essential for providing a comprehensive analysis of various aspects and a well-rounded viewpoint.

Conclusion

A feasibility study helps decide if a project is doable. It involves looking at different factors like costs, rules, and timing to see if the project makes sense. By doing this, it guides decision-makers in determining if the project should go ahead.

Frequently Asked Questions (FAQs) on Feasibility Study in project management?

Q1. What is feasibility study?

A feasibility study is like a thorough check-up for a project idea. It helps to figure out if the project is a good idea and if it’s possible to do. We look at things like if we have the right technology, enough money, if it’s legal, fits with how we do things, and if we can finish it on time.

Q2. What are the types of feasibility study?

Types of feasibility study are:

1. Technical Feasibility
2. Economic Feasibility
3. Legal Feasibility
4. Operational Feasibility
5. Scheduling Feasibility

Q3. What is the purpose of feasibility study?

The purpose of a feasibility study is to figure out if a project is a good idea and if it can actually work. It helps people decide if they should go ahead with the project or not.