How to analyze the feasibility of a business project
11 June 2014
Read by 3137 persons
Feasibility analysis helps determine if a business project should proceed or be abandoned. This applies to partnerships, agreements, new product development, modifications to existing products, acquisitions, etc.
Change inherently involves risk. A feasibility study reveals risk factors and their impact. After this analysis, you can create a preventative plan to mitigate risks and anticipate their occurrence (insurance...).
Setting Objectives
Objectives are set using the SMART model (Specific, Measurable, Achievable, Realistic, Timely). They must be specific, measurable, attainable, realistic, and within an acceptable timeframe.
These objectives define what the company should achieve within a set timeframe. They provide minimum acceptable criteria for moving forward or deciding when to abandon the project.
Analyzing Processes
A thorough examination of project circumstances is necessary for reliable conclusions:
Idea
Market
Technical
Management
Finance
Start by analyzing the idea, technical, organizational, and managerial skills, and the cost. Decision criteria should be determined at each stage.
- Can the idea meet my objectives?
- Should I develop my management skills or hire someone?
- Do we have the necessary technical elements? What equipment and technology needs to be acquired?
- What are the advantages of the service or product? Target market, demand, expected price, projected sales?
- Will the return be sufficient?
With sufficient information and a quality analysis, you can draft a precise business plan and submit it to banks if external funding is needed. Feasibility analysis isn't just for startups; it applies to any business development project, such as building a new factory or launching a new product or service.
In conclusion, the willingness and capacity to take risks vary. A feasibility analysis is a risk management tool. It helps identify negative factors and implement preventative measures to move forward safely.
Philippe Montant
CEO of ReKrute
Change inherently involves risk. A feasibility study reveals risk factors and their impact. After this analysis, you can create a preventative plan to mitigate risks and anticipate their occurrence (insurance...).
Setting Objectives
Objectives are set using the SMART model (Specific, Measurable, Achievable, Realistic, Timely). They must be specific, measurable, attainable, realistic, and within an acceptable timeframe.
These objectives define what the company should achieve within a set timeframe. They provide minimum acceptable criteria for moving forward or deciding when to abandon the project.
Analyzing Processes
A thorough examination of project circumstances is necessary for reliable conclusions:
Idea
Market
Technical
Management
Finance
Start by analyzing the idea, technical, organizational, and managerial skills, and the cost. Decision criteria should be determined at each stage.
- Can the idea meet my objectives?
- Should I develop my management skills or hire someone?
- Do we have the necessary technical elements? What equipment and technology needs to be acquired?
- What are the advantages of the service or product? Target market, demand, expected price, projected sales?
- Will the return be sufficient?
With sufficient information and a quality analysis, you can draft a precise business plan and submit it to banks if external funding is needed. Feasibility analysis isn't just for startups; it applies to any business development project, such as building a new factory or launching a new product or service.
In conclusion, the willingness and capacity to take risks vary. A feasibility analysis is a risk management tool. It helps identify negative factors and implement preventative measures to move forward safely.
Philippe Montant
CEO of ReKrute
