Feasibility study report is one of the key elements of the project initiation phase. When a project is proposed and planned, a study is performed to check the feasibility of the project to see if the plan will work well or not. It tests the technicalities of the project, its feasibility and importance in the business, and the effectiveness of all the costs incurred in the project. But how do you perform a feasibility study and prepare a report? In this guide, we will discuss how to do a feasibility study report and its importance for your business.
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What do you mean by a feasibility study report?
A feasibility study report is basically a document that records all the analyses and investigations made to check the feasibility of a project. It summarizes the evaluations and alternatives that help to determine if the project under consideration is feasible, cost-efficient, and profitable or not. In addition to this, it checks the effectiveness of all the possible solutions to find out the best one for the project. A feasibility study report also lists down the strengths, weaknesses, and efficiency of the solutions to facilitate the comparison of the various solutions.
Importance of a feasibility study report
A feasibility study report is of the utmost importance for any project or a business startup for the reasons given below.
- It helps the project managers know all the factors that may determine the outcome of the project like background, description, a summary of operations, market research, and so on.
- The project leaders can gain licenses and approvals for their projects through a well-written feasibility study report.
- It helps project leaders prepare a great action plan to execute their projects that aims to guarantee the success of their projects.
- It assists the project managers in weighing the project costs alongside the desired efficiency for the project.
- In case of risks, the feasibility study helps to prepare a risk management plan so that the business does not face any major losses.
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What should you include in a feasibility study report?
There are mainly nine components that you must include in a feasibility study report to make it detailed and informative. Let’s discuss each of them in a bit more detail.
- Title Page
The title page of your feasibility study report includes the title of the report, the details of the project leader and the members like names and designations, date of the beginning of the project, and tentative dates for the ending. The basic idea of the title page of a feasibility report is to give a clear idea about the purpose of the report to the reader.
- Table of Contents
The table of contents in the report helps the reader navigate easily through the various sections of the report. You must list the table of contents after completing the report and make sure that the page numbers of each section are correctly mentioned against the name of the section.
- Executive Summary
The executive summary introduces the report, the purpose of writing the report, the possible solutions for the project under consideration, and the sources which have been used to compile the report and back up the things written in the report.
- Market Feasibility
The market feasibility section of the report presents the critical insights of the company statistics, the research of its market, and the future trends for the business. It includes a description of your company’s industry, the history, the ongoing trends, and upcoming patterns of businesses in the industry.
Next, you can describe how your company’s practices align with the patterns of the industry, your competitors, income sources, potential revenues, and targeted areas of work. It is aimed to give the reader an understanding of your company, its working, and how the feasibility project is going to improve its growth.
- Technical Feasibility
The technical feasibility section of your report provides the reader with information regarding the material needed in the manufacturing of the products and services offered by your company, the manufacturing operations involved in the making, the quality testing techniques employed, and the transportation facilities required by your company to deliver the products and services to your customers.
In addition to this, the technical feasibility description in the feasibility study report of your project checks the credibility of your financial feasibility study. It tells the reader about the various procedures undertaken by your company to offer best-quality services.
- Financial Feasibility
In a feasibility study report, you must include all about the finances of your company under the financial feasibility section. It highlights your sources of income, revenue in the present times, your assets and liabilities and the details of your annual revenue in the last year. In this section, you should also mention the benefits-on-cost evaluation that helps in supporting your business requirements.
The main motive of including financial feasibility in your study report is to convince the reader to invest in your business by providing them with an idea of the costs needed and the prospective benefits for them.
- Organizational Feasibility
This section describes your company’s culture and structure like departments and branches. You can include the details of your founders and board members and add a few lines about them. It can also highlight the measures taken by the HR department of your company to maintain ethical and legal duties towards the working individuals.
The aim of organizational feasibility in a feasibility study report is to let the reader know if your company’s working methods align well with the requirements of the project or not.
The conclusion is basically a summarization of the things discussed in the report and calls for further action in the direction.
- Appendix and References
This includes information that may not be directly connected to your report title but may be useful for the reader. It also mentions the references taken to conduct the study and helps the reader check the authenticity of the data given in the report.
Wondering What is a feasibility study?
How to do a feasibility study report?
Five common steps are involved in writing a feasibility study report, irrespective of the scope, size, or type of the project under consideration. Each of these steps is described in detail below.
- Frame a project description
A project description is one of the most crucial elements that decide the outcome of the project. Describe the project that you aim to finish and its purpose. In addition to this, mention the factors that drive the success of the project.
- List and describe the prospective solutions
Next, discuss with your team members to list some possible solutions that will result from the execution of the project. This step will help determine the most beneficial solution for the project in the later stage of the feasibility study report.
- Define the evaluation criteria
In this step, you work out the evaluation criteria for assessing the beneficiary potential of each possible solution. The evaluation criteria may include the scope of revenue, the enhancement of productivity, improvement of communication among the employees and various departments in the company, and customer satisfaction.
- Select the most feasible solution
The next step is to evaluate each possible solution according to a criterion and find the best solution for your project or company. Make sure that you include an explanation for why you chose a particular solution and how it will benefit your business.
- Reach the conclusion
Lastly, write a conclusion that mentions the key points of your study and states the final solution that you have chosen. Also, mention the reason why you chose the solution over others.
While preparing a feasibility study report, it is important to take the suitable templates for the report into consideration as well as frame each of its content elements. Make sure that you discuss with your project managing team to view all the factors deciding the outcome of the project, the various solutions for it, and the reasons to back up your choice.
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