Example of Feasibility Studies

A feasibility study allows you to determine if you have enough market to meet the financial projections of a business.

The complexity of modern business decisions demands a reliable understanding of the various markets. Administrative experience and trials are, of course, important ingredients for decision-making. decisions, but must be reinforced and expanded with objective data from field investigations systematic.

Market research has a specific function: to assist in effective planning and decision-making in the markets. These can be of many types and involve consumer, industrial, commercial and institutional activities.
The feasibility studies aim to determine the market potential of products or services, taking as a criterion basis that the financial projections developed by the Management of the Franchising Company for the business, are feasible be fulfilled.

For its execution, financial projections are developed that take into account the marketing scope area, and the following parameters are considered:

a) Size of the population that corresponds to the target market of the company
b) Socio-economic analysis of the target audience
c) Measurement of households vs. work centers (zone)
d) Vehicle and pedestrian gauges
e) Analysis of distances and access roads
f) Competition present in the area
g) Centers of attraction

Estimated market size defined as (target audience population), by (average consumer spending), by (frequency of consumption), all this projected on an annual basis to eliminate the factor of possible seasonality.
These studies incorporate maps, charts, and graphs that facilitate proper decision-making. Likewise, they propose the most recommended areas and points to carry out advertising actions.

Feasibility studies of a project:

Feasibility refers to the availability of the necessary resources to carry out the objectives or goals indicated, the feasibility is based on 3 basic aspects:
a) Operational.
b) Technical.
c) Economic.

The success of a project is determined by the degree of feasibility that occurs in each of the three previous aspects.
A feasibility study is used to collect relevant data on the development of a project and based on this make the best decision, whether it should be studied, developed or implemented.

Objective of a Feasibility Study:

1.- Help an organization to achieve its objectives.
2.- Cover the goals with current resources in the following areas

to). Technical feasibility.
- Improvement of the current system.
- Availability of technology that meets the needs.
b) .- Economic Feasibility.
- Analyst time.
- Cost of study.
- Cost of staff time.
- Cost of time.
- Cost of development / acquisition.
c) .- Operational Feasibility.
- Guaranteed operation.
- Guaranteed use.

Definition of objectives

The feasibility investigation in a project that consists of discovering what the objectives of the organization are, then determining if the project is useful for the company to achieve its objectives. The search for these objectives must consider the available resources or those that the company can provide, they should never be defined with resources that the company is not capable of providing.

Companies have a series of objectives that determine the feasibility of a project without being limiting. These objectives are as follows:

Reduction of errors and greater precision in processes.
Cost reduction by optimizing or eliminating unnecessary resources.
Integration of all areas and subsystems of the company.
Updating and improvement of services to clients or users.
Acceleration in data collection.
Reduction in the processing time and execution of tasks.
Optimal automation of manual procedures.

Feasibility study resources:

The determination of the resources for a feasibility study follows the same pattern considered by the objectives seen above, which should be reviewed and evaluated if a draft. These resources are analyzed based on three aspects:

a) Operational Feasibility. It refers to all those resources where some type of activity intervenes (Processes), it depends on the human resources that participate during the operation of the project. During this stage, all those activities that are necessary to achieve the objective are identified and everything necessary to carry it out is evaluated and determined.

b) Technical Feasibility. It refers to the necessary resources such as tools, knowledge, skills, experience, etc., which are necessary to carry out the activities or processes required by the project. We generally refer to tangible (measurable) items. The project must consider whether the current technical resources are sufficient or should be complemented.

c) Economic Feasibility. It refers to the economic and financial resources necessary to develop or carry out the activities or processes and / or to obtain the basic resources that must be considered are the cost of time, the cost of realization and the cost of acquiring new resources.

Generally the economic feasibility is the most important element since through it the others are solved lack of other resources, it is the most difficult to achieve and requires additional activities when it is not has.

Presentation of a feasibility study:

A feasibility study needs to be presented with all the possible advantages for the company or organization, but without neglecting any of the elements necessary for the project to work. For this, within the feasibility studies, two steps are complemented in the presentation of the study:

a) Optimal Requirements. These elements must be those necessary for the activities and results of the project to be obtained with maximum efficiency.
b) Minimum requirements to obtain the goals and objectives. Try to make use of the company's available resources to minimize any additional expenses or acquisitions.

A feasibility study must graphically represent the expenses and benefits that the system start-up will bring, for this purpose the cost-benefit curve is used.