Feasibility Study Blueprint: Steps, Examples, and Benefits | Motion | Motion

What is a feasibility study?

A feasibility study looks at a project’s potential before spending resources.

Consider it a detective’s investigation that uncovers potential problems you could face and if it’s worth it.

The key parts of a feasibility study include:

Let’s say your new business venture is to open a gym. Here; a feasibility study would involve the following:

It'd also consider factors like zoning regulations, environmental impact, and potential risks.

When do you need a feasibility study?

A feasibility study happens before starting work on a project to assess its viability. Entrepreneurs use feasibility studies to decide if their new business or product ideas are realistic and can be done. These studies are also called business plans in this setting.

In construction, a feasibility study is a part of valuing the practicality of projects. They use it to identify resources needed vs. available, the overall cost, and return on investment (ROI).

Feasibility studies are also common in market entry strategies. Here they study market conditions, competition, and user stories.

When do you need a feasibility study in project management?

In project management, you should do the feasibility study after pitching the project but before starting.

In project management, feasibility studies help highlight whether the project aligns with the business’s goals. It also helps them to see if they can accomplish the goals within the given constraints.

In Agile project management, feasibility studies may differ, but the purpose remains the same. For Agile feasibility studies, the focus is more concentrated and lightweight than in traditional methodologies.

However, in certain projects and situations, a feasibility study isn’t necessary. These are:

  1. If the project is of a trivial or mundane nature.
  2. When the project has extensive research and validity behind it.

What benefits are there with a feasibility study?

Other than the stated advantage of clarity before tackling a project, this study has many other benefits. Let's explore these advantages a little deeper.

Risk reduction: Feasibility studies help spot potential risks and challenges early on.

Efficient use of resources: Doing a feasibility study lets managers see how they might use resources. And whether the resources needed would be made available. They can then plan the resource allocation (once the ball gets rolling).

Smart decision-making: This research can give you the knowledge you need to make wise project choices in the future.

Financial planning: Feasibility studies help managers estimate costs, predict income, and check ROI.

Meeting rules: Feasibility studies look at a project's legal and compliance aspects (often overlooked). Doing this early instead of at a product launch can save countless headaches.

It helps gain support from important stakeholders: Showing them a well-thought-out plan will help you to gain their confidence and set their expectations early.

4 types of feasibility studies

Feasibility studies come in 4 different types, each geared at helping you know what you are getting into.

Financial feasibility

A financial feasibility study determines whether a project is financially viable and can make enough profit.

Market feasibility

Market feasibility studies assess the potential market demand and acceptance for a product or service.

Technical feasibility

Technical feasibility studies determine the likelihood of success from a technical perspective.

Operational feasibility

Operational feasibility determines whether businesses can implement the project within themselves.

Conduct a feasibility study in 8 steps

Next up, let’s look at how to conduct a complete feasibility study. We’ve broken down the general process into eight steps, which you can apply across most industries.

1. Gather the data (pre-analysis)

Gathering relevant data and information is a prerequisite for a successful feasibility study.

2. Conduct market analysis

Now let’s go over the bases you need to cover for a market analysis:

  1. Explore market aspects such as size, trends, customer preferences, and competition.
  2. Examine current market statistics to understand the potential demand for your product or service.
  3. Evaluate the competitive landscape to identify existing players and their strategies.

3. Evaluate technical feasibility

Next, assess the technical feasibility of the project requirements and constraints.

4. Perform financial analysis

Next, evaluate the projected costs, potential revenue streams, and ROI.

5. Assess legal and regulatory factors

Next, evaluate the legal and regulatory aspects that may impact your project's feasibility.

6. Analyze environmental and social impacts

In this step, you should check the environmental and social impact of your proposed business.

7. Identify and evaluate risks

Next, we identify, evaluate, and plan for potential risks and challenges.

8. Summarize findings and recommendations

Finally, it's time to summarize and give recommendations.

Examples of feasibility studies

Let’s explore a couple of examples to show you the power of the feasibility study.

Marketing feasibility study

We will illustrate a situation where a firm plans to introduce a new type of product to the market.

Software development feasibility study

Let us shift our focus and contemplate an alternative situation.

Motion helps with feasibility studies

Motion is a project management tool that can boost the effectiveness and precision of your feasibility assessment.