Feasibility study

report writing

Martina Kopsov
www.pwc.cz/academy
What is a feasibility study?
Defined as a controlled process identifying problems and opportunities,
determining objectives, describing situations, defining successful
outcomes and assessing the range of costs and benefits associated with
several alternatives for solving a problem.

The Business Feasibility Study is used to support the decision-making
process based on a cost benefit analysis of the actual business or project
viability.
The importance of a business feasibility study
Business feasibility study and dimension of
business viability
Framework of the dimension of business viability:
1) Market Viability
2) Technical Viability
3) Business Model Viability
4) Management Model Viability
5) Economic and Financial Model Viability
6) Exit Strategy Viability
Business feasibility study outline
Cover Sheet
Executive Summary
Table of Contents
- Introduction
- Product or Service
- Technology
- Market Environment
- Competition
- Industry
- Business Model
- Marketing and Sales
Strategy



- Production/Operating
Requirements
- Management and
Personnel
Requirements
- Intellectual Property
- Regulations/Environm
ental Issues
- Critical Risk Factors
Financial Projections
- Balance Sheet Projections
- Income Statement Projections
- Cash Flow Projections
- Break-Even Analysis
- Capital Requirements &
Strategy
- Recommendation & Findings
- Conclusion
Executive Summary
It is a summary of all key sections of the Business Feasibility Study and
should work as a separate, standalone document.

KEY POINTS:
Write after content of BFS is completed.
Written last, but present first.
No more than one page long.
Table of Contents Product/Service
For description use simple language.
Description of how customers would use and buy product/service.
Describe key components or material used.
Describe plans to test the product to ensure it works.
Describe plans to upgrade product or expand product line.


Table of Contents Technology
As necessary, provide further technical information about
product/service.
Describe additional or ongoing research and development needs.

Use understandable technical terms.


Table of Contents Intended Market Environment
a) Target Market
Define and describe the target market(s).
Be clear how end users and customers benefit.
b) B2B Market
Know your industry.
Estimation of market size, market share, etc.
c) B2C Market
Know relevant demographic, psychographic and behavioural factors.



Table of Contents Competition
Describe direct & indirect competition.
For key competitors give market share, resources, product and market
focus, goals, strategies, strengths and weaknesses.
List all key entry barriers.
Describe how unique is your product in comparison with competitors.
State how difficult is copy your product.
How will be reaction of your competitors to your launch?



Table of Contents Industry
Clear definition and description of the industry.
Describe demand and supply factors and trends.
Describe the largest forces that drive the market.



Table of Contents Business Model
Describe the proposed enterprises business model.
Describe the model in enough detail to support financial projections
presented later.



Table of Contents Marketing and Sales Strategy
Lay out the basic marketing and sales strategies.
Discuss any strategic partnership in place or planned.
Describe distribution strategy.
Describe pricing strategy.
Outline other issues eg. warranties.
Quantify the marketing budget.



Table of Contents Production/Operating
Requirements
Describe how and where will be product produced.
What physical premises are required?
Will space be owned or leased? Need of renovations?
How complex is the manufacturing process?
Do you need outsourcing?



Table of Contents Management and Personnel
List proposed key managers, titles, responsibilities, relevant
background, experience, skills, costs.
Sketch personnel requirements.



Table of Contents Intellectual Property
Briefly describe patents, copyrights and trademarks obtained and in
process.




Table of Contents Regulation/Environmental
Issues
Outline non-economic forces that might affect your business case:
- Government regulations
- Environmental problems
- Political stability
- Any other regulatory or political issues





Table of Contents Critical Risk Factors
Use tools as:
- SWOT
- Porters Five Forces
- PEST Analysis





Financial Projections
Capital Requirements & Strategy
How much funding will you need and when?
What sources will provide the funding?
What ration of debt to equity financing will occur?
When will investors begin see a return?





Financial Projections
- How to Conduct a Break-Even Analysis?
- SP Selling Price
- VC Variable Costs
- CM Contribution Margin
- FC Fixed Costs
- X Units
Units sold at break-even:
SP (X) = VC (X) + FC

Break-even revenue:
Break-even revenue ($) = Break-even units x Selling Price



Final Findings & Recommendations
A significant component of the findings should related to the likelihood
of success, projected return on investment and how any identified risks
should be mitigated.




Sources of help
Business Enterprise Centres
Accountants
Solicitor
Bank
Business Advisors/Consultants
Potential Suppliers
Sources of Information
Competitors
University Libraries and Online Entrepreneurship Resources




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