You have a great new business idea. You've asked your friends and family for feedback and they gave you thumbs up approval. You've asked your existing customers if they'd have use for such a product or service and they've indicated they would. Lastly, you've done some soul searching and you know you're truly interested in this concept and have
commitment to stick with it over long haul.So far so good. Now it's time to do a feasibility study.
I can hear resistance already.
"A feasibility study, you say? Isn't it something that CEO's of Fortune 500 companies fiddle with? What does it mean to owner of a small or home business like me?"
Consider: A feasibility study is research that gives you preliminary information regarding your business idea's potential to succeed in marketplace.
It can mean difference between success and failure. There are plenty of business ideas. Some of them will work. Some will not. We know that every year, scores of new businesses flounder and fail, despite owner's hard work and enthusiasm. Sadly to say, one major reason for failure is entrepreneur's willingness to commit to a favored idea without researching feasibility of concept. The demons battled here are internal ones: Loving an idea doesn't mean it's going to be a success.
Smart entrepreneurs know importance of doing initial research before investing time and money in starting a new business, or in developing a full-scale business plan.
This gathering of information is feasibility study. It can be a complex, formal document used for attracting investors, or a simple page of notes to oneself. Regardless of which format you need, feasibility study should address following categories in detail:
The Product or Service
Describe product or service. What is it? How and where will it be manufactured or produced? By whom? How will it be delivered to customers? In what way is it unique?
The Owners and Management
Who are members of your management team? What are their strengths in this particular venture? How will those strengths benefit business concept? What necessary skills and strengths are missing from your present team? How will you compensate for those skills? Will you hire? Contract out? Take training courses? Other?
