A feasibility study is set up to minimize the risk and to ascertain the viability of a project. As soon as it is certain that a specific project could be carried out with profitability, it is only then that it could be completed. It is not just a study but also a plan or framework for how to run a business project.
An opportunity survey contains five main components, namely: market research, technical study, management study, economic study and social desire.
During marketing research, the researcher must determine if there are sufficient requirements for the product as well as the company’s competitiveness in the industry. Sales projection for the project should also investigate as part of the market research.
The manufacturing process, plant size, production plan, machinery, plant location and layout, structure, raw materials, utilities and waste disposal are taken into account when it comes to technical examination.
Management study involves how the project is to be managed, such as the business organization, including the organizational chart and function of each unit management staff, skills and the number of manpower required.
In the economic study, the researcher should include the assessment of total capital requirements, break-even output, sales and prices, the amount of sales required to earn a certain amount of profit, and the payback period.
Last but not least is the social desire that is measured by the economic benefits of the people living in the community and its neighborhoods.
No wonder one of the important steps in business development is a feasibility study. Feasibility study is used to determine the potential for success of a proposed business venture. The success of an opportunity study is based on careful identification and evaluation of all the important aspects of business success.