Pre- Feasibility Study

Factors in a pre-feasibility study

1. Market Potential and prospects

2.Availability and appropriateness of technology
3. Project investment and detailed cost estimates
4. Financial forecasts and determination of financial
feasibility
Market Potential and Prospects

* Market potential is based on the estimated number of

possible customers who might avail of the product or
service
* It would help to narrow down estimation to the relevant
population target customers in the area where you want to
operate your business
1.Purchasing power
2. Proximity or accessability to the goods or services
3. Individual desires and preferences
4. age or generation grouping
5. social, cultural, or ethnic background
6. peer group preferences
7. gender
8. Season of the year
9. personal identification with trend setters
10. educational attainment
11. technical proficiency and product expertise
12. motivational impetus
13. lifestyle preferences
14. susceptibility to certain advertising and promotional appeals
Segmenting the Market
the entrepreneur must be able to do actual field research
like surveys, focus group discussion, in-depth interviews,
observation techniques, etc.
in order to assess one's strengths and weaknesses, there must be a
comparison made with the closest competitors. Profiling these competitors
will help the entrepreneur gauge their respective strengths and weaknesses
and, therefore, enable the entrepreneur to craft a strategy.
Estimating Market Shares and
Sales
-the entrepreneur must define the market coverage or reach he or she wants
to serve .
1. Who has dominance ?
2. Who has greater bargaining power ?
3. Which segments of the total market are saturated and
over served and which ones are relatively undeserved.
4. Are there market segments which are more attractive
than others for the entrepreneur , either because of past
expertise in the segment or weaker competition in the
segment
Technology Assessment and
operations viablity
1. Quantities Demanded
2. Quality Specifications Demanded
3.Delivery Expectations
4. Practice Expectations
1. Pre-Operating Costs
2. Production / Service Facilities
Investment
3 Working Capital Investment
1. Income Statement
2. Balance Sheet
3. Cash Flow Statement
4. Funds Flow Statement
It measures an enterprise's performance in terms of revenue and expenses
over a certain period.
Revenues- Expenses = Income or Profit ( Loss)
Monthly income statement of Mang Juan's Manufacturing

Gross Sales P 750,600

Less: Cost of goods sold 468,487

Gross profit/margin 282, 113

Less Operating expenses 166,145

Operating profit/ margin 115, 968

Less Taxes 21, 392

Net Profit After Taxes P 94, 576

Balance Sheet
• Income Payback Period = 1500000/ 500000 = 3 years
Return On Sales (ROS)

• Ration Where the entrepreneur calculates how much

profit the enterprise is earning for each peso sold.

• Return on Sales = NET PROFIT AFTER TAXES/ SALES

• Return on Assets or Return on Investments = NET PROFIT

AFTER TAXES/ TOTAL ASSETS/ INVESTMENTS
 THE FEASIBILITY STUDY

-it is prepared to convince bankers and

investors to put money into the business
oportunity.
 Things to consider in writing Feasibility Study
1. A more in-depth study of market potential to ensure that the
business proposal will reach the forecasted sales figures
2. Proof that the product or service being offered has the right
design, attributes, specification, and ferred features.
3. Proof that the entrepreneur and his or her team have the
necessary experience, skills , and capabilities to maximize the
venture's chances of success
4. Legal visibility
5. More detailed costing on the different assets and more
justification for the production and operating expenses ; and
6. More thorough analysis of the tehnology and its sustainability