Feasibility Study: 7 Key Elements of a Feasibility Study
Written by MasterClass
Last updated: Nov 21, 2022 • 2 min read
From startups to enterprise companies, organizations conduct analyses to make informed decisions about new projects. Learn more and discover the key elements of a feasibility study.
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What Is a Feasibility Study?
A project feasibility study is an analysis used to determine the practicality and likeliness of success for a project or new business idea. A feasibility study can look at several variables, including cost, profitability forecasts, market analysis findings, technical requirements, government regulations, and scheduling or timeline constraints. Businesses use feasibility studies to decide if they should develop a new product or expand into an untapped market; they begin with a preliminary analysis before conducting a full feasibility report.
The Benefits of a Feasibility Study
A feasibility study has several benefits because it requires the project managers and participants to consider a project’s potential obstacles before diving in, allowing them to make informed decisions about the best approach. In addition, a feasibility study helps the team recognize early on if a project requires too much time or too many resources for its projected benefits.
7 Key Elements of a Feasibility Study
As you create a feasibility study template based on your company’s needs, key elements to add include:
- 1. An executive summary: Most feasibility reports begin with an executive summary—a brief recap of the entire report for key leadership. The summary includes a short description of the project scope, the study and findings, and a specific recommendation from the team (distilled into a “go/no-go decision”—whether to begin the project, change its focus considerably, or hold off on it for now).
- 2. Details of the proposed project: A feasibility analysis should include a detailed description of the product or service the team wants to use, along with each potential deliverable and the project plan.
- 3. Economic considerations: To evaluate the project’s economic feasibility, consider any economic obstacles or variables that would impact the project’s success or viability, including cost, company cash flow, financial resources, target market demographics, market research findings, sales and marketing strategy, and financial projections like revenue, return on investment, and upkeep costs. Include a balance sheet, projected income statement, or cost-benefit analysis to summarize these financial feasibility findings and demonstrate how the project supports the overall business plan.
- 4. Legal feasibility: Consider any legal requirements or variables that can influence the project, including government regulations, zoning, or shipping requirements.
- 5. Organizational considerations: To determine the operational feasibility, compare your team's organizational structure against the project's needs. Consider the staffing requirements to complete the project—including management teams and on-the-ground staff—and whether you have the right number of people, organizational bandwidth, and competencies to complete the project successfully. Also, consider any stakeholders or decision-making bodies that might want a final say in the project and whether you can satisfy everyone.
- 6. Schedule considerations: Determine the deadlines for the project and at what speed you could viably complete it.
- 7. Technology considerations: Consider any technological requirements or demands that could alter the project’s technical feasibility, including the methods of production and maintenance and the technical resources necessary.
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