Feasibility study and business plan differences are subtle. In this post we will discuss 10 differences will help you to evaluate and differentiate between a feasibility study and a business plan.
Do you know what is a feasibility report? Do you know what is a business plan? Can you easily differentiate between a feasibility report and a business plan?
It’s easy! Just read out through the article and it will all be easy.
Let’s start by learning about a feasibility report:
A feasibility study is a formal document that assist in the identification and investigation of a proposed project. We can identify the project's weaknesses and strengths with the support of a feasibility study report, which saves us time and energy. We can determine whether the suggested idea will be lucrative and practicable in the future.
Before investing in a project, it is critical to determine if the project will be beneficial in the long run. The organization also needs to know how much the project will cost. Overall, a feasibility analysis indicates whether the firm should invest or continue with the project.
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Now let us learn about business plan:
A business plan is a formal document that contains the goals/ objective of the business, the time in which the goal will be completed and the strategies that can be adopted to reach the specific goal.
A business plan is a necessary document for every new firm to have in place before it can begin operations. Writing a credible business plan is typically a requirement for banks and venture capital companies before contemplating granting funding to new enterprises.
It is not a smart idea to operate without a business strategy. In fact, very few businesses can survive for long without one. There are many more advantages to developing and keeping to a strong business plan, such as the ability to think through ideas without investing too much money and, eventually, losing money. Business plans are used by start-ups to get off the ground and attract outside investors.
A feasibility study is used to assess if a business or a concept is viable. After the business opportunity has been identified, the business strategy is produced. “A feasibility study is carried out with the goal of determining the workability and profitability of a company venture. A feasibility study is conducted before any money is committed in a new business endeavour to see whether it is worth the time, effort, and resources.
Similarities between a Feasibility study and a business plan
It's essential to analyse the similarities between a feasibility study and a business plan because they're both implemented altogether in same ways to help you build a lucrative company. The following are some of the similarities between the two documents:
Time: Both the reports are completed before the business begins and can be repeated afterwards to decide the next stages for new concepts.
Input: Both Feasibility report and the Business plan include input from a variety of people or departments with a variety of talents.
Format: Both report formats incorporate other documents that are gathered in order to create the report.
Components: Examining the target market, market circumstances, and financial expenses are some of the topics examined.
Use: Both may be displayed to potential investors and can assist the organization's management in making choices.
Organizations uses a business plan and a feasibility study as analytical and decision-making tools.
Although the three tools can be used in conjunction with one another in decision-making processes, they each have their own strengths and weaknesses, and they appear to target and address separate processes.
You might also like to read How to write a feasibility study report?
Now let us evaluate the difference between feasibility report and a business report-
- A feasibility study is conducted to determine the viability and profitability of a business endeavour. A feasibility study is conducted before any money is committed in a new business endeavour to see whether it is worth the time, effort, and resources.
A business plan, on the other hand, is created only when it has been determined that a business opportunity exists and that the endeavour is about to begin.
- A feasibility report is the first step and after that a business plan is made to be implemented, without feasibility report a business plan cannot be made.
- A feasibility study contains computations, research, and projected financial forecasts for a company possibility. A business plan, on the other hand, is mostly comprised of tactics and strategies to be applied to establish and expand the company.
- A feasibility study is concerned with the viability of a business concept, but a business plan is concerned with the development and sustainability of a company.
- A feasibility report informs the entrepreneur about the profit potential of a company concept or opportunity, whereas a business plan assists the entrepreneur in raising the necessary start-up cash from investors.
- Key components of a feasibility study and a business plan
|Table of contents
|Appendix and reference pages
- A business plan does not include the description of the sales methods used, such as distribution agreements, strategic alliances, and the amount of involvement with partners, as well as the payment terms, warranties, and other customer support.
But a feasibility report includes all the sales methods, strategies, alliances to payment and customer support.
- Feasibility report contains:
- Assists in cost estimation, describe the production site, required inputs, and sourcing region.
- Physical description of the factory, including machine, capacity, warehouse, and supply chain, is necessary.
- Indicate if the area used for production is rented or owned. This will have an impact on the financial forecast.
- Information regarding the manufacturer's capacity, order details, price, and so on, if manufacturing is outsourced. To aid in cost estimation, describe the production site, needed inputs, and sourcing location.
- A physical description of the factory, including machine, capacity, warehouse, and supply chain, is necessary.
But a business plan does not contain anything related to production and operations, but a business plan contains all the information related to management.
- A poorly written business plan – poor projections, strategies, analysis, business model, and environmental factors, among other things – can be easily adjusted during business operations, but this cannot be said of a feasibility study because an incorrect conclusion in a feasibility study can be costly — it could mean launching a venture with little chance of survival or approving a proposal that wastes the company's human and financial resources.
- A business plan presume that a company will prosper and lays out the procedures needed to get there. Those in charge of conducting a feasibility study should not have any predetermined notions regarding the likelihood of success. They must maintain as much objectivity as possible. They do research and allow the facts to lead to the study's conclusion. If the study concludes that the idea is viable, some of the findings, such as market size predictions, may be incorporated in the company's business plan.
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These 10 differences will help you to evaluate and differentiate between a feasibility study and a business plan.
Feasibility study may appear to be like the business plan in many respects. "A feasibility study may easily be transformed to a business plan” but it is crucial to remember that the feasibility study is completed prior to the endeavor. The business plan should be thought of in terms of growth and sustainability, whereas the feasibility study should be thought of in terms of concept viability.
This is all you need to know and understand about feasibility study and business plan.
Get ready to apply your knowledge in the real words with lots of success.
You might also like to explore below external contents on feasibility study:
- What Is a Feasibility Study? – Types & Benefits
- Best 8 Property Management Software
- FEASIBILITY STUDIES & BUSINESS PLANS
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