A feasibility study is just what it sounds like: a systematic study to understand whether or not a specific project, venture, or approach is feasible. The ultimate outcome of any feasibility report is a go / no go decision. You either move forward or you don’t.
Feasibility Studies: Keys to Success
The keys to a successful feasibility analysis include:
- The study must be based in reality — not pure speculation or abstract theory. This usually requires primary and secondary market research, to understand whether or not members will join, customers will buy, or investors will invest.
- The project, venture or approach must be sufficiently well defined that specific hypotheses can be tested. Without clear objectives and product/service characteristics, nothing can really be determined to any degree of confidence.
Typical Questions Asked in a Feasibility Study
Here are a few examples of the types of questions we address in a typical feasibility study:
Has anyone attempted anything like this before?
If so, what problems did they encounter? Did they ultimately succeed?
What are the decision factors?
What are the factors that will enter into the final decision as to whether the project, venture or approach is feasible and should move forward? Typical factors involve financing, staff resources, material resources, market supply and demand, time and space constraints, etc.
Are there benchmarks or hurdles that need to be surpassed?
What financial, resource, membership, or other hurdles muct be reached for a successful solution? Are there unavoidable market risks or environmental risks? How can they be best mitigated?
What data is available internally and externally?
What is the quality and reliability of this data? Is it current? Is it readily available?
Why Conduct a Feasibility Study?
The most common reason would be to limit one’s losses. For example, suppose a county redevelopment authority is considering a new industrial park. Legal, design, construction, management, staffing and marketing expenditures could easily cost tens of millions of dollars. Several years of costs would be sunk into the project before there was any possibility of recouping any expenses through operations. A feasibility study should be a high priority long before substantial capital and resources are invested . If the feasibility study indicates a very low probability of success, it would be far less expensive to invest in the feasibility study and kill the park, than it would be to go forward without the study and then see the park fail.
Whether a study’s findings are positive or negative, the feasibility study can help organization executives better understand what aspects of the project are of greatest strategic importance to success. If the feasibility study is negative, the findings may still uncover previously unknown market opportunities and can thus help set the stage for some other successful project. If the feasibility study is positive, the findings should provide useful insights and benchmarks for the project as it moves forward.
Different feasibility study companies have different strengths. At Ground Floor Partners our expertise is market feasibility, not engineering feasibility. We research and analyze market factors such as demographics, supply and demand, market capacity, regulations, cultural issues, etc. Here are some areas we work in:
- special needs/ disabled housing
- industrial parks
- community centers
- economic and community development
- tourism initiatives
We have alliance partners in construction, architecture, strategic planning, marketing, technology and other areas whom we can bring on to complete any size project.
Wouldn’t it be nice to learn from other people’s mistakes, so you can avoid repeating them? Here is a brief list of the most common mistakes when performing feasibility studies.
Contact Us now to see if Ground Floor Partners is a good fit for your organization.