Are feasibility studies a waste of time?

We often hear these questions from busy managers coping with the day-to-day, but they are also excuses that miss the point: ‘Are feasibility studies really necessary? Are they just a waste of time (and money)? Do I really need one for just some new equipment?’

So, what are the benefits of a feasibility study?
Well, they provide an in-depth analysis of the viability of any business idea or plan that you may have. They will help you make a decision as to whether to go forward with a project idea. If through the exercise, you find that the business idea will not work, this can reduce your stress levels by saving time and money, and possibly not jeopardise your existing business.

A business venture can be considered feasible when it can grow to generate a conventional cash-flow and profits, can survive the risks it will encounter, maintain viability in the long-term and meet the goals of you, the business owner.

The business venture can be a start-up business, purchase of a pre-existing business, an extension of a current business operations or a new enterprise for an existing business. A feasibility study is only one step in assessing the business idea and its development process.

A feasibility study will allow you to assess the market and show opportunities through market need and demand. It will identify who, if any, are your competitors and if you would add to the marketplace by bringing forward your proposed venture.

The feasibility study will identify and address potential risks at the start of your project. It will save time and money at a later date. It will analyse your own strengths and weaknesses and share the opportunities and threats that the marketplace offers.

When should I carry one out?
Feasibility studies should be carried out prior to writing a business plan. It will start the whole process and give you confidence. By carrying one out, you will have less unknowns and be more focussed. The feasibility study will inform the drafting of a business plan by concentrating on the best options and enabling the plan to move from an idea to a reality.

As we move to a post COVID 19 era and businesses are looking to re-engage with customers, add value to products or start afresh, now is the time to be considering if the idea is of value to your business and the marketplace.

To find out more about how ARC can help you develop your business idea, do get in touch.

Emma Powlett
Anglia Rural Consultants