As the name implies, a utility study is an investigation of the viability of an idea. The feasibility study converges on helping answer the essential question of “should we proceed with the recommended project idea?” All activities of the study are conducted toward helping answer this mystery. We will know about the business feasibility study checklist but we should know about the feasibility study.
Business feasibility study
Feasibility studies can be practiced in many ways but principally focus on recommended business ventures. Farmers and different with a business idea should attend a feasibility study to discover the viability of their idea earlier proceeding with the development of the business. Ascertaining early that a marketing idea will not work saves time, money and anguish later.
A possible business investment is one where the company will generate adequate cash flow and interests, withstand the risks it will encounter, settle viable in the long-term and join the goals of the founders. The venture can be either a start-up market, the purchase of an existing business, a development of current business operations or a new project for an existing business. Feasibility Study Outline is provided to give you guidance on how to proceed with the study plus what to include. How to Use and When to Do a probability Study will encourage you through the means and help you get the maximum out of your research.
A feasibility study is simply one step in the business approach assessment and business growth process. Reviewing this process and reading the knowledge below will help put the presentation of the feasibility study in outlook.
A feasibility study is similar to a personal financial plan. Individuals need to assess their total incomes and to allocate their expenses to keep within them. Many people will spend a considerable amount of lime developing a personal or family budget. Here we provide detail discussion regarding business feasibility study checklist below:
Feasibility study checklist
A well-prepared feasibility study contains at least six major sections:
- Introduction, preface, or general overview,
- Accounting, finances, and taxes
- Legal aspects.
1. Introduction, Preface, or General Overview
- The objective of the feasibility study
- History (if you are purchasing an ongoing concern)
- Overview of the industry
- Objective and supporting strategies
- Price determination: competition’s prices, price fist with profit margin –
- Promotion: specific detail plan ( how, when, where, and cost); personal selling, mass selling, sales promotion
- Product description: goods and/or service explained in detail.
- Identify the target market, who where and how many
- Place: location, size, traffic counts, channel or distribution
3. Accounting, Finance, and Taxes
- Start-up or turnkey cost (.itemized)
- Equity, or unencumbered cash
- Credit references
- Loans: amounts, types, and conditions
- Proforma income statement (profit and loss statement)
- Proforma balance sheet
- Ratio analysis
- Provision for taxation
- Projected cash flow
- Working capital
- Break-even analysis
- Personal expertise
- Organizational structure
- Personnel management (wage and salary administration)
- Policies (general and departmental)
- Inventory control
5. Legal Aspects
- Contracts licenses and other legal documents
- Business structure
- Insurance: types and costs
- Provision for business termination
- Type: sole proprietorship, partnership, corporation etc.
- Conditions and terms: responsibilities, liabilities, and compensation of principals
- Working papers
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