The administrative feasibility study and its importance, the management feasibility is an evaluation of a business project, and its purpose is to analyze whether the project meets certain criteria, the feasibility study is defined as an evaluation or analysis of the potential impact of a project or proposed work. It is conducted to assist decision-makers in deciding whether or not to undertake a particular project or business, is based on extensive research, contains extensive data, and has clear supporting evidence. It is an investigative function that identifies and analyzes many alternatives.
Administrative feasibility study and its importance
Business feasibility holds great credit in the success of business and management as it gives,
New ideas through the investigation process and identifies reasons not to proceed with the project or business.
Enhances the likelihood of success by addressing early mitigating factors that could affect the project or business.
It provides good information for decision-making.
Gives focus to the project or business and outlines alternatives. Also, work alternatives are narrowed.
Provides documentation that the business has been thoroughly investigated.
A feasibility study is a comprehensive and hypothetical analysis of a project, business or project that examines the probability of success, market and non-market.
A well-designed feasibility will take into account target markets, consumer behavior, corporate strategies, and a plethora of logistical considerations. If the gain/loss gain (or whatever metric a project’s success is measured against) is strong, the project is more likely to move forward.
Like all models, feasibility is based on an acceptable simplification, the designer needs to be very explicit about their assumptions, equations, and correlations.
How does a feasibility study work?
The feasibility study will first identify an initial business, product or service. It usually contains three main parts:
The technical study
In the market segment, market study, the current target market is tested, and the feasibility of the product in that market will be determined. The study will survey prices and costs and then the prices of the proposed product and service.
Then comes the technical part of the feasibility study where you measure and calculate how much money you will need for your business, how much capital to set up the business, how much capital to operate for the first three or six months and then how much are the annual operating and direct costs (COGS).
In financial study, quite simply, costs and profits are calculated and then the business can be classified into feasible, unfeasible or highly risky.
Other analyzes such as sensitivity analysis can be done to test the business under changing conditions, and its resilience under changing factors. This will give you a picture of whether or not the business is safe.
The first step in the feasibility analysis
The first step in feasibility preparation is to understand the business dynamics of the type of business you are considering setting up feasibility for. For example, if it is a trading company, service company, financial services company, manufacturing company, importer, or exporter.
The next stage will be understanding the details of the work. For example, if you are preparing a feasibility study for a trading company, you need to answer other questions like what will the reading company do, where will it be established, will it need more human resources than how many, their qualifications and salaries, will it require some office equipment, furniture and fixtures, Will I buy or rent the shop, how much money will I need to invest and a number of similar questions
Assemble a team with the necessary skills, qualifications, and experience to analyze the problem
Take the time to investigate and understand the problem (cause, effect, affect)
Divide it into components
Identify different solutions that may address the problem and sub-problems
Think comprehensively about what is needed to make each solution work, design, plan, and cost
Do a legal analysis of all options
Analyze each solution qualitatively and quantitatively
Rank the options in terms of practicality and ability to tackle the problem
Recommend a preferred solution
Apply and get consensus on the way forward