Feasibility statements are a great way to build a project foundation, within several steps an understanding of the project can be achieved, setting the project manager on a path of success. Using some of the best practices and with available templates the path to successful delivery is clearer. Simply put, a feasibility study is an assessment of practicality of proposed plan or method.
The feasibility study will assist in determining if the technology for example can do as proposed. Does the project have the people, tools and resources necessary? Will it also achieve return on investment?
Once a plan for the feasibility study is created, upload that task list to a preferred project management software and most of the work is populated in the Gantt chart. Tasks can then be assigned to team members, add costs, create timelines, collect all the market research and attach notes at the task level. This gives people a plan to work from, and a collaborative platform to collect ideas and comments.
Based on this information the project can be deemed in a position to be implemented. It is best to conduct a feasibility study during that point in the project’s life cycle after the business case has been completed. It then outlines the factors that will make the business opportunity a success making it an important component of the project.
The following are the seven steps when conducting a feasibility study:
1. Conduct a Preliminary Analysis
Begin by outlining the plan, focus on an unserved need, a market where the demand is greater than the supply, and whether the product or service has a distinct advantage. Then determine if the hurdles are too high to clear (i.e. too expensive, unable to effectively market, etc.).
2. Prepare a Projected Income Statement
This step requires working backwards, start with what income from the project is expected and the investment needed. This is the foundation of an income statement. Items to consider here include what services are required and how much they’ll cost, any adjustments to revenues, such as reimbursements, etc.
3. Conduct a Market Survey, or Perform Market Research
This step is key to the success of a feasibility study, so it should be thorough. It’s so important that if the organization doesn’t have the resources to do a proper one, then it is advantageous to hire an outside firm to do so.
The market research is going to provide the clearest picture of the revenues which can be realistically expected from the project. Some things to consider are the geographic influence on the market, demographics, analysing competitors, value of market and what the share will be and if the market is open to expansion.
4. Plan Business Organization and Operations
Once the groundwork of the previous steps has been laid, it’s time to set up the organization and operations of the planned business venture. This is not a superficial, broad stroke endeavour. It should be thorough and include start-up costs, fixed investments and operation costs.
These costs address things such as equipment, merchandising methods, real estate, personnel, supply availability, overhead, etc.
5. Prepare an Opening Day Balance Sheet
This includes an estimate of the assets and liabilities, one that should be as accurate as possible. To do this, create a list that includes item, source, cost and available financing. Liabilities to consider are such things as leasing or purchasing of land, buildings and equipment, financing for assets and accounts receivables.
6. Review and Analyse All Data
All these steps are important, but the review and analysis are especially important to make sure that everything is as Project Mnagement it should be, and nothing requires changing or tweaking. Re-examine previous steps, such as the income statement, and compare it with expenses and liabilities. Is it still realistic? This is also the time to think about risk, analysing and managing, and determine any contingency plans.
7. Make a Go/No-Go Decision
At this point a decision can be made about whether the project is feasible or not. A couple of other things to consider before making that binary choice is whether the commitment is worth the time, effort and money and is it aligned with the organization’s strategic goals and long-term aspirations.
Feasibility Report Template
Finally, here is an outline for the nine parts of a feasibility report:
1. Executive summary
2. Description of product/service
3. Technology considerations
4. Product/service marketplace
5. Marketing strategy
6. Organization/staffing
7. Schedule
8. Financial projections
9. Findings and recommendations
That final item is broken down into subsets of technology, marketing, organization and financial findings and recommendations.
A feasibility study can provide an insight on the validity of a project, a project management software can assist with its execution. Once a plan for the feasibility study is in place, upload that task list into the software and all the work is populated in the online Gantt chart. At this time, tasks can be assigned to team members, add costs, create timelines, collect all the market research and attach notes at the task level. This gives people a plan to work from, and a collaborative platform to collect ideas and comments. Let us know your thoughts on the use of feasibility studies, we would like to hear from you. All the very best on your project management journey.
