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feasibility studies header

Different types of study

Feasibility Study Terminology

This page of the website explains the traditionally accepted differences between a feasibility study and a business plan.

The following terminology was commonly used

What is a business plan or business development feasibility study – as they are often called?

A business development feasibility study is an analytical tool that is used to determine if a particular business concept is viable and is heavily weighted towards market research and analysis. It must provide clear evidence to the stakeholders that a concept is viable.

Only 1 or 2% of new business ideas are actually viable - that's why we are not all millionaires! So the business development feasibility study is a very useful tool that must be used to reduce the risk of business failure.

If the results of the study show that the business proposed is viable then it can be developed into a full scale business plan.

The business development feasibility study would include sections dealing with:

What is the difference between pre-feasibility studies, business development feasibility studies and project development feasibility studies?

They are all similar but because the final product is different there is a different emphasis on the various elements of each study.
For instance if a firm is planning to establish a new business making shoes in one of four countries somewhere in Europe the pre-feasibility study might include:

Or;

If an established international shoe-maker is planning to establish a new business making shoes in Italy The business feasibility study might include the following elements:

Or;

If an established international shoe-maker is planning to build a factory extension alongside its existing operation The project development feasibility study might include

What is the difference between a feasibility study and a business plan?

A feasibility study is not a business plan.

The separate roles of the feasibility study and the business plan are frequently misunderstood.

The feasibility study provides an investigating function that should answer the question:-
“What should the business be?”

The business plan provides a planning function that outlines the actions needed to take the proposal from “idea” to “reality.”

“How should the business be set up”

The feasibility study outlines and analyzes several alternatives or methods of achieving business success. So the feasibility study helps to narrow the scope of the project to identify the best business model.

The business plan deals with only one alternative or model. The feasibility study must narrow the scope of the project to identify and define two or three scenarios or alternatives. The project manager conducting the feasibility study may work with the group to identify the “best” alternative for their situation. This becomes the basis of the business plan.

The feasibility study is conducted before the business plan.

A business plan is prepared only after the business venture has been deemed to be feasible.

If a proposed business venture is considered to be feasible, then a business plan needs to be constructed that provides a “roadmap” of how the business will be created and developed.

The business plan provides the “blueprint” for project implementation. If the venture is deemed not to be feasible, efforts may be made to correct its deficiencies, other alternatives may be explored, or the idea is dropped.

If you want advice or help on any aspect regarding the different types of Feasibility Study get in touch with me by filling in the Bronze Membership form here

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