Feasibility study and business plan The similarity between a feasibility study, a business plan, and a project proposal, a feasibility study is conducted before starting a business, Feasibility study and business plan as when you have a business idea but want to make sure it is possible, or desirable, is it worth your time, effort, and money to create this business? Many different professionals may contribute to the study, such as accountants, entrepreneurs who have opened successful businesses, real estate brokers who provide advice on location value and pricing, and comparing similar businesses in the region so in this article, we will talk about a feasibility study and business plan.
Feasibility study and business plan
The business plan details should clarify how the business will operate as it is assumed that your feasibility study has been completed and you determine that the idea is viable and you are now in the process of clarifying your financial and other goals, the methods you plan to use to achieve them, and the proposed organizational structure.
Feasibility study and business plan
Comparing the similarities between a feasibility study and a business plan is important because both are used in different ways to help you create a profitable business.
Similarities between the two documents include:
Timing: Both are done in the beginning before the work opens, and can be done again later to define the next steps for future ideas.
Inputs: They both involve input from multiple individuals or departments with different skills.
Format: Both contain other documents that are grouped together in order to create the report.
Components: Some of the issues analyzed are similar, including examining the target market, market conditions, and financial costs.
Use: Both help the management of the organization in making decisions, and they can also be shown to potential investors.
Understand the differences
It is equally important to understand the difference between a business case and a business plan.
They are not the same, and one cannot replace the other. Differences include:
Purpose: Feasibility studies determine whether a business or other idea should go forward, while business plans are designed after a decision to actually move forward is made.
Methodology: Basically feasibility studies are research projects, while business plans are projections for the future.
Risks: Feasibility studies identify risks associated with an idea, while business plans explain how management deals with risk so that it makes a profit.
Cost: Feasibility studies can require hiring experienced outside professionals who will conduct comprehensive studies, while business plans are written by company employees, as part of their jobs.
Feasibility study and business plan
If you are doing the feasibility study yourself, run a complete competitive analysis bearing in mind the following:
Product demand: Is there a need or desire for your product or service? Has the need really been met, or is there room for another product?
Market conditions: Who will buy your product and where are they? Can you service their site? Is the market saturated, or is there space/need for more products?
Pricing: What are existing users paying for similar products? What do you need to charge to be profitable, and will consumers pay the price you want?
Risks: What are the risks associated with your idea?
Likelihood of Success: Can You Reasonably Beat the Stakes to Become Profitable?
Writing a business plan
Writing a business plan may seem daunting but if you take it to step by step, it will pay off.
The Small Business Administration advises that business plans should include the following:
Executive Summary: Include your mission statement, products and/or services, and some brief information on the leadership team and key employees, as well as your business location. To attract investors, add current financial information and growth projections.
Company description: break down the problems your business solves; Your target market, its competitive advantages, compared to the competition, and anything else that makes your company outperform others
For example, product or recognition awards, significant sales increases, etc.
Market analysis: doing competitive research of what other companies are doing; Their strengths and weaknesses, and how and why your business will be competitive and successful in the market.
Feasibility study and business plan
Organization or department: Determine the legal status of your business, such as a company or partnership, and include an organization chart that shows management levels, departments, etc.
Service or product line: Mention what you will sell or offer, describe the benefits of each, explain any research that has been done, any patents filed, etc.
Marketing and Sales: Explain in detail your marketing strategy and how the sales will be made.
Funding Request: If necessary, detail the amount of financing you will need for the next five years specifically, what you will do with the funds, and the terms you are requesting.
Financial Projections: These are the company’s financial projections for the next five years. Include current financial data, if the business is in operation.
Appendix: This includes supporting documents or requested materials, such as resumes, product photos, letters of recommendation, patents, licenses, etc.