Research reveals that most businesses fail because they do not study the markets or financial aspects of their ideas properly. A feasibility study is an essential step in such cases to make sure that your business decisions are destined for success.
A well-structured feasibility study is your blueprint for:
Gauging Market Receptivity
When you set out on an entrepreneurial journey, you need to make sure that the market is ready to embrace your concept. An idea, irrespective of how brilliant it is, remains incomplete if consumers fail to see it as useful and do not fall for it.
Ensuring Financial Viability
A big part of a business’s success depends on whether it is financially viable or not. A feasibility study assesses whether your concept can stand on its own two feet, attracting the necessary financial support. You need to make sure that your brilliant idea not only satisfies the market but also has the potential to translate into sustainable financial gains.
What’s a Feasibility Study?
It investigates the market, analyses competition, assesses finances and cash flows and identifies potential challenges. In short, it helps you make informed decisions and helps your business be successful.
Some of the most popular feasibility studies for business ventures are:
1. Market Feasibility: Often the first step for a venture, it involves:
a. studying supply and demand factors, and
b. identifying the product’s:target market, competition levels, and potential consumers’ demographics.
It helps you understand market dynamics and estimate potential product demand accurately.
2. Technical Feasibility: The technical feasibility study evaluates:
a. the machinery,
b. technology, and
c. equipment required to meet market demand.
It is done to make sure that your production capacity aligns with your goals.
3. Financial/Economic Feasibility: Just before the launch, you should focus on:
a. preparing cash flow forecasts,
b. assessing costs,
c. projecting sales and profits, and
d. determining the return on investment of your project.
A financial viability or economic feasibility study is vital for you to make financial projections and attract investors by showcasing to them how your business can offer them excellent returns on your investment.
So, if you are at a critical decision point in your business, considering whether to go ahead with something or not, a feasibility study can be your guiding star. Use it to outline various scenarios, gain an in-depth understanding of their financial implications, and challenge the underlying assumptions.
About Indicators Consulting
Indicators Consulting has over 10+ years of experience in offering feasibility studies, marketing research, consumer behaviour analytics, and more to a range of businesses in the UAE. If you need objective, accurate, and grounded feasibility studies for your business, contact them.