Feasibility Assessment & Business Ideas

The business idea should be defined at the first step of the feasibility assessment, if it is a new product, service or project. The feasibility of the business idea or project can then be ascertained. The feasibility demands to account for the current conditions of the proponent. For example, the intender of the business should take into account the personal readiness, resources, knowledge, skills and objectives. For developed business, connections to current lines of business, employees, customers, suppliers and other stakeholders demand to be accounted for.

Elements of Feasibility Assessment Process

Following are the important elements of the feasibility assessment process.

• Executive Summary
• Need Analysis
• Engineering
• Advantages and Disadvantages
• Market for the product Offerings
• Financial Analysis
• Risk Analysis of the Preferred Solution
• Comparative Analysis
• Recommendations

1. Executive Summary

The speedy overview of the main points of the assessment is provided in the executive summary portion. This will assist in developing picture of the proposal together with the recommendations. Executive summary must be concise and contain the main findings mentioned in the main body of the report.

2. Need Analysis

A context to the business proposition is provided by the need analysis information. With a study of potential alternatives, the analysis is made for the justification of the idea. It connects the business idea to the existing circumstances and assists to point out the evaluation of the business idea.

3. Engineering

Technical aspects of the business idea are described in this portion. This portion also contains any changes required to be made to the current processes or requirement for the addition of the items to current range of products or services.

4. Advantages & Disadvantages

It includes the advantages and disadvantages of the business idea in comparison with alternatives, like competing products; or for a new approach, its relatedness to the existing practices and to the high level demand.

5. Market for the Product Offerings

The number of customers, the size of average customers, expected frequency and any drop in the costs throughout the business are mentioned in this portion which result as an emergence of new product or service. The expectations about the customer purchase behavior must be specified so that these can be assessed in terms of in terms of probability of being accomplished or exceeded. When the operations of business are altered, the reward may come from the competitive advantage like cost savings, market share or increased prices. Research must concentrate on the following

• Customers

The type of the targeting customer should be cleared in addition to their expected response towards the offerings. Target market segments should be identified to understand about the purchasing behavior and demands of the targeted customers.

• Products and Services

The products or services that will offer to each segment should be listed; for every product or service, how much will be paid by the customers.

• Competition

The competitors should be listed along with their apparent strengths and weaknesses. The reasons of being competitors are ascertained and the resultant competitive strategies of the proposed business should be specified.

• Map

The market boundaries, location, suppliers, competitors, access routes and demographic information on the market should be specified in the map acquired from relevant source.

• Costing

The costing for implementing the business idea should be performed. All the costs related to the production and distribution of the desired products or services should be clarified. This analysis must also consider the costs of alternative production or implementation strategies.

• Suppliers

Preferred and alternative suppliers should be identified; their price lists and catalogs should be collected.

• Location

The site for the proposed business should be identified as either it is owned or rented etc, along with its advantages & disadvantages.

• Resources

Assessment should be made for the required resources (assets and equipment), their costs of acquisition along with the alternative methods for obtaining them.

• Staff

The required staff should be mentioned along with the skills required from them and the remuneration paid to them.

6. Financial Analysis

Calculation should be made for the profits resulted from provided set of operations, the required capital and how this capital can be obtained for starting business or project.

7. Risk Analysis of Preferred Solution

It may include the fundamental breakeven analysis which refers to the level of operation of business that will guarantee that business does not suffer loss. Various business scenarios may be considered through sophisticated analysis on the basis of the assumptions developed in the market and costing analyses.

8. Comparative Analysis

The objectives of the project should be reflected by the comparative analysis of the alternatives. For example, maximizing profits or minimizing loss for different business scenarios provide basis for decision making. Higher financial payoffs under particular scenarios and increased losses under other scenarios will reflect some riskier alternatives; while the others can be less risky with reduced financial profits or losses under a different set of circumstances.

9. Recommendations

It includes the recommendations of the favored alternative with a linked action plan; or a decision regarding discontinuing the further proceedings should be mentioned in this portion. Possible plans of action include returning back to drawing board, building more potential alternatives, more research to reduce the chances of failure or proceeding further to build detailed business plan.