Feasibility report shows the suitability of a project in both physical and economic terms. In other term it shows if a project is worth undertaken. This report should be unbiased and must adopt a logical approach.
STAGES OF FEASIBILITY STUDY
Feasibility study involves important stages which must be observed in order for an entrepreneur to be successful in his or her chosen line of business. Observing these stages properly ensures that the entrepreneur is on the right track in his business plans and actions.
1. Development of idea: this is the stage where the project/business idea is formed. It involves a lot of thinking by using the principle of organized thinking. Business idea can be generated from any source; friends, family members, you, or through formal sources. The idea need to be conceptualized and the final product must be visualized through the power of imagination. The features of the product regarding the size, color, quality, the target market, weight and others; should be properly thought of.
2. Finding of useful information: when I say information moves the world you have to agree with me because whatever any man does without information; is like taking a journey with your eyes closed and you may end up falling into a hole. At this stage, you need to source for every useful information you can lay your hands on like identifying alternative products, sourcing for data relating to your products, information analysis on the market environment and so on. You need to find information regarding the business location, regulatory laws regarding your product, economics aspect of the product and social conditions. Have you wondered the reason why some companies will volunteer to pay you in order that you fill their survey form? It is because information is very important and they are willing to pay for it. You can get information through observation, business survey/questionnaire, library research, records and publications.
3. The technical stage: after sourcing for data and information, you need to make use of it by making analysis regarding the project. This is a stage that reveals that the product may be worthwhile or not. These technical analyses ranges from financial analysis, economic analysis and social analysis; they helps to speak on the viability of the product. Financial analysis makes use of these methods in ascertaining the feasibility of a business project: pay-back period, net present value, annual rate of return, profitability index and so on. The economic analysis makes use of break-even technique, economic order qualities and linear programming techniques. When we talk about social analysis, we should think of social cost-benefit analysis.
4. Filing a project report stage: this is the next stage after making analysis and have seen that the product is worthwhile. In a big corporation where there are board members, the report will be taking to the board for an approval. An entrepreneur should make a report of his findings from stage 3 above and may consult other professional bodies (like a consulting firm) or associates for critical analysis of the report and its approval.
5. The execution and control stage: this is the last stage and it involves the implementation of the plan with exertion of control. You can't talk of execution in this stage without mentioning of control because control gives efficiency to the attainment of the stated objective/aim/goal.
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