Business development feasibility study

PROJECT MANAGEMENT Project Feasibility study

By,Sumaira Aslam

Lecturer, The Islamia University of Bahawalpur, Pakistan

Business Development Feasibility Study

• A business development feasibility study is an analytical tool that is used to determine if a particular business concept is viable.

• It is heavily weighted towards market research and analysis.

• It must provide clear evidence to the stakeholders that a concept is viable.

• Only 1 or 2% of new business ideas are actually viable - that's why we are not all millionaires!

• So the business development feasibility study is a very useful tool that must be used to avoid the waste of valuable resources.

• If the results of the study show that the project is feasible then it can be developed into a full scale business plan

The business development feasibility study would include sections dealing with:

1. Introduction2. Details of the product or service3. Identification of any technical issues4. The existing market and the competition5. The business structure6. Marketing and sales strategy7. Operational parameters8. Staffing levels9. Patents, trademarks etc10. Regulatory issues11. Environmental issues12. Risk analysis13. Profit and loss and balance sheet forecasts14. Cash flow and capital requirements15. Recommendations and conclusions

Difference Between Pre-feasibility Studies, Business Development Feasibility Studies And Project Development Feasibility StudiesThey are all similar but because the final product is different

there is a different emphasis on the various elements of each study.

For instance if a firm is planning to establish a new business making shoes in one of four countries somewhere in Europe The Pre-feasibility study might include:

1. Introduction to the basic social and business infrastructure of each country

2. The skills of the local workforces3. The availability of local raw materials and their cost and

quality4. The manufacturing facility5. The social, political and economic risks6. The incentives available7. The planning and regulatory regime8. Recommendations of the country of choice and terms of

reference for a feasibility study

If an established international shoe-maker is planning to establish a new business making shoes in Italy The business feasibility study might include the following elements:

1. Introduction2. Details of the range of shoes3. The machinery to be used4. The market for the shoes and the competition5. The business structure of the foreign entity6. Marketing and sales strategy7. Operational parameters8. Staffing levels9. Patents, trademarks etc10. Regulatory issues11. Environmental issues12. Risk analysis13. Profit and loss and balance sheet forecasts14. Cash flow and capital requirements15. Recommendations and conclusions

If an established international shoe-maker is planning to build a factory extension alongside its existing operationThe Project Development Feasibility Study might include:

1. Introduction2. Details of the new range of shoes3. Examination of new manufacturing techniques and

the machinery required4. How the new range will compete in the existing

market and the competition5. The additional managers required6. Staffing levels7. Planning and local issues8. Risk analysis9. Profit and loss and balance sheet forecasts10. Cash flow and capital requirements11. Recommendations and conclusions

The feasibility study outlines and analyzes several alternatives or methods of achieving business success.

So the feasibility study helps to narrow the scope of the project to identify the best business model. The business plan deals with only one alternative or model.

The feasibility study must narrow the scope of the project to identify and define two or three scenarios or alternatives.

The consultant conducting the feasibility study may work with the group to identify the “best” alternative for their situation. This becomes the basis of the business plan.

The feasibility study is conducted before the business plan.

A business plan is prepared only after the business venture has been deemed to be feasible.

If a proposed business venture is considered to be feasible, then a business plan constructed that provides a “roadmap” of how the business will be created and developed.

The business plan provides the “blueprint” for project implementation. If the venture is deemed not to be feasible, efforts may be made to correct its deficiencies, other alternatives may be explored, or the idea is dropped.

Project & project managementThe past several decades have been marked

by rapid growth in the use of project management as a means by which organizations achieve their objectives. In the past, most projects were external to the organization—building a new skyscraper, designing a commercial ad campaign, launching a new product etc.

“A temporary endeavor undertaken to create a unique product or service” (Project Management Institute, 2004, p. 5).

Direct Project GoalsPerformanceCost Time.

The Project ManagerThe Project Manager (PM) Is Expected To;Integrate all aspects of the projectEnsure that the proper knowledge and resources

are available when and where needed.Above all, ensure that the expected results are

produced in a timely, cost-effective manner.The challenges are many and the risks significant,

but so are the rewards of success. Project managers usually enjoy organizational visibility, considerable variety in their day-to-day duties, and often have the prestige associated with work on the enterprise’s high-priority objectives.

Trends in Project Management

Achieving Strategic Goals.Achieving Routine Goals.Improving Project Effectiveness.Virtual Projects.

THE PROJECT LIFE CYCLEMost projects go through similar stages on

the path from origin to completion, these stages are known as the project’s life cycle.

The project is born (its start-up phase) and a manager is selected, the project team and initial resources are assembled, and the work program is organized.

Then work gets under way and momentum quickly builds. Progress is made. This continues until the end is in sight.

Components Of Project AnalysisImportant Components of project analysis

are;

1.Market analysis2.Technical analysis3.Financial analysis4.Economic analysis5.Ecological analysis

1. Market analysis

Market analysis

Market share

Potential market

2. Technical analysis

technical analysis

Sensible choice

Technical viability

3. Financial analysis

Financial analysis

ReturnRisk

4. Economic analysis

Economic analysis

Other impacts

Benefits and cost in shadow

prices

5. Ecological analysis

Ecological analysis

Restoration measures

Environmental damage

Assignment # 2

Conduct market analysis and submit report in next session.

Trends of demand and supply of the proposed project idea

Thanks to Allah

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