As a prospective entrepreneur with creative and innovative ideas, feasibility study is a must. There is a great need to add to your inner courage a study of how feasible and viable your business vision is. This will necessitate the need to conduct a twin study of feasibility and viability. This must be done in full scale and carefully with commensurate research and information.
The following words are very important if one is to fully understand the meaning and purpose of feasibility study. They are possibility, probability, practicability, capability and achievability. We ask the following questions in the process of carrying out a feasibility study.
These questions above need to be answer clearly before the business start. There is nothing to fear, if you have gathered enough materials and information needed to help you decide whether to go on or stay back. At this stage you will need certain entrepreneurial qualities and courage to believe in your dream.
PROCESSES INVOLVE IN CARRYING OUT A FEASIBILITY STUDY
A successful feasibility study must involve good data gathering skills, data analysis skills, data recording, researching and writing of the report. Below are the process involve when carrying feasibility study. They need not follow each other sequentially.
Your Business Vision and Mission
Your purpose of going into any form of business must be clearly defined. This can be done if your vision and mission are clear and can be stated in form of statements. These statements must have being propelled by a passion such as a desire to be financially independent, to be self employed, to provide for your family, to help others, to expand an existing business or to create wealth.
You must identify your target audience, whether you are providing a service or you have a product to offer. Having a target audience invariably points to the fact that you have a market. Hence you do a market survey with your target audience who also are your clients, customers or consumers. You will need to gather all necessary information about your target audience, what they wants, their needs and compare with your goal and objective as a business.
Location for your Business
Your location for your business is very crucial and must be thoroughly researched into. This also includes accessibility of your company by your target audience, easy transportation, and availability of electricity, societal factors and environmental advantage of that location.
Level of incorporation
The type of business you intend to go into must be clear. What type of registration is involved? What kind of business structure do you intend to have?
Business operating Environment
You will need to study the
business environment. The tax laws of the state or country, the political
situation, the availability of infrastructure like access road, water and
electricity, the educational level of the area or environment, the IT level,
the attitude of your audience to the kind of your proposed business.
You will need to gather all information about the line of business. If you intend to operate an IT business like a cyber café, you will need to understand the IT industry and the related businesses and services other than your own type.
You will need to find out the
startup capital for your proposed business. Is the business capital intensive?
The material resources needed at start up, are they expensive? How do I make
adequate use of human, material, capital and intangible resources?
Adequate and accurate financial information
You will need adequate and accurate financial information. The amount of the startup capital must be known, together with the cost of the resources needed to kick start the business. Other sources of financing must be clearly understood and researched into.
Recognition and management of risk
What are the types of risk that occurs in this type of business? Risks are inevitable in business and as such find out and list all the associated and expected risk that may occur. Knowing the various problems you might encounter in the future will prepare you in advance to prevent or reduce them.
Level of Viability
You will need to know the optimal level you must function in terms of material resources and other business operations for you to breakeven and make profit.
Will you need a bank loan or a support from an investor? How much loan will you require? Are you credit worthy to request for a bank loan? Have you open a bank account for your company? Is the bank ready to assist you?
Alternative options available to achieve your goal
Find out other alternatives to achieving your goals. As you study existing business, with creativity and innovation, you can design alternative options to enhance productivity and efficient business operations.
Setting price for your product
What type of product would you
produce in terms of quality? What is the acceptable expectation of the product?
Clearly do a thorough research on the pricing for your product. Remember that
it is best to have a customer that repeatedly patronizes your product than for
a one time customer. Match quality and value with pricing. Understand what
customers needs are and package your product to meet such needs.
Human and material resources
Find out if the business requires special skill manpower, identify such skilled individual and bring them in. You will need to know the maximum number of staff, the minimum number of skill staff and the number of machines that may be needed for a startup.
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