Introduction
Some essential practices are carried out before starting a new business to establish if the business idea is sensible and to evaluate the required capital needed to start the business. It also helps identify the length in which the business will begin to show profit.
Bringing together in-depth business plan needs a significant investment of time, so it is very important to investigate the feasibility of business idea and to establish if it has a value. Feasibility study is the initial stage a person pursues before producing a complete business plan (Reuvid, 201, p. 135).
A feasibility study is applied to analyze the probability of the business idea being effective and the business plan uses the data received in the feasibility study to demonstrate the way the business will function, market, develop, and create income.
The business plan must come after the feasibility study and if the projected business idea is not feasible, a person must progress the business plan until he or she revises the business idea. The business plan is often used as a tool to portray completely the business and its fiscal projections.
Purpose of Feasibility Study and Business Plan
A feasibility study offers an impression of the major factors of the business idea to investigate if it is appropriate and practical, and to establish any issues that may build or damage the undertaking. This study examines the market area, the prospective business form, the provision of products, and advanced financial features such as the accessibility of capital and prospective proceeds on venture (Reuvid, 201, p. 135).
The feasibility analysis addresses different settings for the function of the business and provides all the benefits and drawbacks to establish the effective and reliable options. For instance, if a person arranges to commence a business that offers the products related to clothing, the study establishes if the products will sell better online or in a local store setting.
After the feasibility analysis is performed and the projected idea is feasible, the person should apply this information to gather his or her complete business plan.
This report or plan offers an efficient direction or path for establishing the venture and contains a description of the situation that has been chosen from those enclosed and described in the feasibility study. It describes issues like the potential business model, projected possession, and legal structure, and the idea for execution (Gartner and Bellamy, 2008, p. 242).
Structure of Feasibility Study and Business Plan
A feasibility plan has a structure that contains aspects of the product or service and the rationale that offers how person anticipate customers to buy this product or service. It examines the materials applied to produce the item or the procedure by which the person obtains the product or service for sale.
A feasibility study determines the mass and features of the projected market, the key players and all present blockages to operating in the market. It investigates the environmental factors that might influence the effectiveness of the venture, such as advance technology expenses, government policies, and waste disposal matters.
The business plan contains in-depth picture of the functions, the products to be offered, capital expenses, marketing strategies, and accessibility of budget. The plan encloses the potential time limit for starting the projected business and the main individuals required within this period.
The business plan lists the potential strategies of the venture in the market and determines evidently the part of the market intended to purchase the products of the business.
It also provides the descriptions of the pricing strategies of the venture and evaluation of the immediate competitors of the business and their pricing (Gartner and Bellamy, 2008, p. 242). The business plan contains descriptions on the way the person proposes to finance his or her introduction expenses and early inventory purchases.
Identification of Feasibility Study and Business plan
While it is carried out before the person begins to plan the product, proceed on the business, and market the products, the feasibility study joins the analysis regarding the industry, product or service growth, production, cost factors, pricing, and functions.
It is intended to determines that there are demands of the customers for the product offered by the business and if it is possible to create a profit and meet the available demands. The business plan also offers practical ideas and information the business may apply in planning and initiating the business (Allen, 2011, p. 25).
Business Plan Identification
Taken from the reality discovered by the feasibility study of the business, a person may plan the way he or she will provide the product at a cost that permits the new business to attain the end users’ price demands and again receive projected profit.
Feasibility study also describes the business’s projected customer and helps in making a marketing strategy part of the business to draw more customers to make a profit.
When creating a business plan, it is necessary to go on to apply the feasibility study that produces important information for the business form, intended customer, marketing strategy, revenue form, industry information, investigation of competitors, and emergency strategy (Allen, 2011, p. 25).
A business is likely to be unsuccessful if its feasibility study is carried our inadequately in the beginning. Nevertheless, business plan passes through several iterations and are intended to develop to explain a continuing business.
References
Allen, K. (2011). Entrepreneurship For Dummies. Hoboken, NJ: John Wiley & Sons.
Gartner, W., & Bellamy, M. (2008). Creating the Enterprise. Mason, OH: Cengage Learning.
Reuvid, J. (2011). Business Insights: China: Practical Advice on Operational Strategy and Risk Management. London: Kogan Page Publishers.