What is a feasibility study and its importance in business development?

What is a feasibility study and its importance in business? Certainly, many people have heard the term feasibility study before, especially when starting a commercial project, and it is possible that the commercial activity was started without using a project feasibility study, as the feasibility study is very important in implementing commercial projects, so we will In today's article, we talk and answer what is a feasibility study and its importance in business?

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What is a feasibility study?

We will mention in the following lines what a feasibility study is and its importance in the work:

1. it can be considered Feasibility study Simply as a way for the owner of the project idea to see the feasibility of turning his idea into a business.
2. By studying the elements of the project, its implementation mechanisms, and the expected financial return, in addition to analyzing the market, competitors, and customers.
3. And other factors that could be affected by the project.
4. A feasibility study provides you with many steps.
5. By presenting the reality of the project before your eyes, it is possible to discover that there is no important information about the idea and other elements, and its absence means its loss in the future.
6. You start preparing your ideas and arranging the needs of the project again, and return to implementing it again in a more professional manner, taking into account all the surrounding factors.

What is a feasibility study model?

• Often, a feasibility study is used primarily to determine the economic viability of a project.
• Although there are feasibility studies to determine the extent of organizational feasibility within the organization, the mechanism of action and how a successful strategy can be achieved.
• There is also a technology feasibility study, which is dedicated to meeting business needs for a range of hardware, software and technical issues.
• Determining its feasibility to achieve business requirements.
• The feasibility study is a means of collecting accurate information about the project and its related matters.
• It consists of a set of points and elements, including a project description and market study, with details related to financial and accounting issues.
• It also contains the legal conditions and requirements, provided that these elements clarify the strengths and weaknesses of the idea, and the possibility of the project’s success.

What is a feasibility study and its importance in business?

1. It is important that there is more than one way to prepare a feasibility study, but there are key components that the study includes as a starting point for preparing it.
2. And setting the steps that ultimately lead to the implementation of the project, knowing that the feasibility study is evidence to the owner of the idea and the entrepreneur that he is on the right path to achieving the project goals.
3. It also provides the opportunity to evaluate the project from time to time and identify the positive and negative aspects and their sources.

What are the components of a feasibility study?

In the following lines, we mention the components of the feasibility study:

the description:

Develop a description of the product or service on which the project idea is based, provided that the description is detailed and accurate, highlighting the features of this product or service, and explaining how it can contribute to meeting customer needs.

market:

It is important to study the market in which the project idea will be implemented, so that the entrepreneur is aware of the nature of this market, the target audience, and the method of reaching potential customers, while identifying competitors, prices, and sales expectations.

The technical study:

Its purpose is to provide a study of the logistical needs of the project, such as the labor required, the appropriate location for the project, and the raw materials needed by the project.

In addition to the technical and technological matters of computers or laptops, and other needs that work to achieve the project goal.

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Executive or organizational study:

That is, creating a management structure for work within the project, starting from project owners and managers to employees and workers.

The project management method and decision-making process will be clarified, taking into account expansion possibilities and implementation methods.

Legal study:

The project owner must be aware of the appropriate legal framework for his project, and his need to obtain licenses to operate or document the idea.

Financial study:

This is considered one of the most important elements of the feasibility study. The project owner must be aware of the expenses that his project requires during a certain period.

With his expectations of the revenues generated by the project, so that he has a certain number of the amount of capital that he wants, and this is an important point in the project owner’s negotiations with investors and partners.

How to conduct a feasibility study for a small project?

In the following lines, we will mention working methods Feasibility study For a small project, we answer what a feasibility study is and its importance in business:

1. Determine the feasibility of the idea or project for business investment.
2. A feasibility study can help in choosing the most appropriate idea for implementation, narrowing down the broad possibilities, and defining the loose idea within a specific framework, making it easier for the project owner to implement it.
3. The feasibility study helps to make sound investment decisions to a large extent, as it shows the profitability of the project, and the percentage of return on investment that comes from profits.
4. The project's ability to bear future financial risks, challenges and obstacles, while identifying these risks.
5. A feasibility study enables you to develop your idea or project in the future, because you will be aware of current market trends, so you can provide what you need in the future.
6. Knowing the resources, logistical and organizational issues that the project needs, so that you do not start your project and find that something is missing.
7. A feasibility study helps an entrepreneur write a clear business plan with a set of very precise data, so it is a practical way for entrepreneurs to convince investors.
8. Its importance can be summarized in that it is specific and focuses on specific points of the project, transforming it from just a passing idea into a reality with a framework, with the possibility of providing alternative solutions.