This presentation is made my Bikash Chandra Paul & Promit Debnath!

2. MBA Program
Faculty of Business Studies
University of Dhaka

3. Group Details
Name of Members ID No.
Promit Debnath 18103
Bikash Chandra Paul 18115
Md. Kaikobad Hossain 18120
Anjan Kumar Das 18124
Pobittro Saha 18133

4. Project Cycle
Pre-investment Phase
Investment Phase
Operation Phase

5. Pre-investment Phase
Opportunity Study
Pre-feasibility Study
Feasibility Study
Appraisal Report

6. Pre-investment Phase
Opportunity Study
Pre-feasibility Study
Feasibility Study
Appraisal Report
• Screening innovative ideas
• Reviewing country importing items
• Assessing local community needs
• Projecting future demand on
certain product or service
• Examining current diversified
industrial trends
• Reviewing available skill &
workforce
• Expert research

7. Pre-investment Phase
Opportunity Study
Pre-feasibility Study
Feasibility Study
Appraisal Report
• Describing the product or service
• Describing the market supply & demand
• Describing production methodology
• Describing initial inputs and infrastructure
supporting services
• Location
• Estimate capital & operating cost
• Estimate revenue

8. Feasibility Study
A feasibility study is defined as an evaluation or
analysis of the potential impact of a proposed project
or program. It is conducted to assist decision makers
in determining whether or not to implement a
particular project or program.

9. Feasibility Study (Cont.)
Feasibility
Study
Based on
extensive
research
Contain
wide-ranging
of data
Should have
clear
supporting
evidence

10. Feasibility Study V/S Business Plan
An investigating function
Outlines and analyzes several
alternatives
Conducted before business
plan

11. Excuses for NOT Doing Feasibility Study
• We know it’s feasible. An existing business is
already doing it.
• Feasibility studies are just a way for consultants to
make money
• The market analysis has already been done by other
same business
• Feasibility studies are a waste of time. We need to
buy the building, tie up the site and start the
business.

12. Reasons to Do Feasibility Study
• Gives focus to the project and outline alternatives.
• Narrows business alternatives
• Identifies new opportunities through the investigative
process.
• Identifies reasons not to proceed.
• Enhances the probability of success by addressing and
mitigating factors early on that could affect the project.
• Provides quality information for decision making.
• Provides documentation that the business venture was
thoroughly investigated.
• Helps in securing funding from lending institutions and
other monetary sources.
• Helps to attract equity investment.

13. Dimensions of Business Viability
Market Viability
Technical Viability
Business Model Viability
Management Model Viability
Economic & Financial Model Viability
Exit Strategy Viability

14. Market Viability
Opportunity
Target
Customer
Competitors
Market
Environment
Similar
Product
Pricing Distribution

15. Technical Viability
Capacity Resources
Manufacturing
Process

16. Business Model Viability
Uniqueness of
Model
Competitor’s
Ability to
Duplicate
Ability to
Create Value
Ability to
Create Wealth

17. Management Model Viability
Application of
knowledge &
skills
Training
Employee
management &
recruitment
Management of
intellectual
property
Management of
risk
Ability to
delegate to the
staff
Suitable
organizational
structure
Ability to
measure
business
process

18. Economic & Financial Viability
Startup cost Working capital Operating cost
Raw material
cost
Overall return on
investment
Overall
profitability
Break Even
Point
Sustainability of
market versus
projected
revenue
Ability to
generate
economic value

19. Exit Strategy Viability
Create wealth
from exit
strategy
Ability to
define exit
strategy
Identify
potential buyer
or strategies
Schedule exit
strategy

20. Issues to be Considered
Market
Feasibility
Technical
Feasibility
Resource
Feasibility
Cultural
Feasibility
Operational
feasibility'
Legal
Feasibility
Schedule
Feasibility
Economic
Feasibility

21. Market Feasibility
• Industry description.
• Industry competitiveness.
• Market potential
• Access to market outlets.
• Sales projection
Market
assessment is
needed to
identify the
opportunities in
the market. If no
opportunities
exist, there may
be no reason to
proceed further.

22. Technical Feasibility
• Determine facility needs.
• Suitability of production
technology.
• Availability & suitable of site.
• Raw materials.
• Other inputs.
Product
methodology need
to be determined. It
involves which
technology will be
needed for
production, how it
will be operated
and the experience
of the firm in using
the technology.

23. Resource Feasibility
• Required time for
completion
• Effect on normal
business operation
• Amount of resources
The time required
for the project and
resources needed to
be determined here.
Contingency &
mitigation plans
should also be
stated here so that if
the project does
over run the
company is ready
for this eventuality.

24. Cultural Feasibility
• Impact on the local &
general culture
• Environmental factors
need to be considered
• Impact of enterprise's own
culture
Culture has great
effect on
business. So
local culture as
well as corporate
culture need to
be taken into
consideration
here.

25. Operational Feasibility
• Compatibility of current work
practices & procedures with new
system required by the project.
• Effect of social factors such as
how the organizational changes
will affect the working lives of
those affected by the new system
Focuses on the degree
to which the proposed
development projects
fits in with the existing
business environment
and objectives with
regard to development
schedule, delivery
date, corporate culture
& existing business
process

26. Legal Feasibility
• Legal Implication
• Ethical Issues
• Authorization
• Political Issues
• Environmental Issues
Whether the
project
conflicts with
legal
requirement is
need to be
checked.

27. Schedule Feasibility
• Project timetable
• Project deadline
A project will fail if
it takes too long to
be completed before
it is useful.
Typically this
means estimating
how long the
system will take to
develop, & if it can
be completed in a
given time period
using some methods
like payback period.

28. Economic Feasibility
• Availability of required
resources
• Determine the benefits
& savings
• Compare the benefits
with cost
The purpose of the
economic feasibility
assessment is to
determine the positive
economic benefits to
the organization that
the proposed system
will provide. It includes
quantification and
identification of all the
benefits expected. This
assessment typically
involves a cost/
benefits analysis.

29. Parts of Feasibility Report
 Cover Sheet
 Executive Summery
 Table of Content
1. Introduction
2. Product or Service
3. Technology
4. Market Environment
5. Competition
6. Industry
7. Business Model
8. Marketing & Sales
Strategy
9. Production Requirement
10. Management & Personnel
Requirement
11. Intellectual Property
12. Regulations Issues
13. Critical Risk Factors

30. Parts of Feasibility Report
 Financial Projections
1. Balance Sheet Projections
2. Income Statement Projections
3. Cash Flow Projections
4. Break-Even Projections
5. Capital Requirement & Strategy
 Findings & Recommendations
 Conclusion

31. Executive Summery
Executive summery is the summarized outcome of the
feasibility report. It is a separate and standalone
document. It helps the interested parties to understand
the entire report and decision making. Few things to
remember:
It should be presented immediately after the content
section.
It should not exceed more than one page.

32. 1. Introduction
Introduction includes the basic concept of the study. It
also includes the background of the study as well.
Few things to remember:
Introduction should be brief and clear.
Introduction should reflect the insight reasons of
the study.

33. 2. Product or Service
This section of the feasibility report describes the
entire product(s) or service(s) details of the company.
It also gives a brief idea about:
Product mix (if any)
Usefulness of product or service
Key components or raw materials and its
availability
Implementation plan
Upgrade or expand the product line

34. 3. Technology
Technical knowledge of the feasibility study includes
several issues such as:
It provides details information about the product or
service.
Describe additional or ongoing research or
development needs.

35. 4. Market Environment
• Details about target market
• Emphasis on costumers’ benefit
Target
Market
• Target industry, key players
• Market size, targeted market share
B2B
Market
• Demographic factors
• Psychological and behavioral factors
B2C
Market

36. 5. Competition
Market competition is a vital issue of starting new
business if the competitors exist. Few things to
remember:
Details about competitors
List of barriers to entry
Describe uniqueness of product(s)
Copyright issues
Competitors reactions

37. 6. Industry
A feasibility study should clearly define and describe
the industry in which the enterprise operates. It also
includes the following issues:
Industry size
Industry growth rate
Industry segment
Industry supply and demand
Industry forces that drives the market

38. 7. Business Model
Proposed enterprise’s business model is presented in
this part which includes:
How the business will generate revenue.
Will there be recurring revenue?
Describe the model fully so that it will support the
financial projection.

39. 8. Marketing & Sales Strategy
Basic marketing and sales strategy should be
presented in here. It may describe any strategic
partnership the enterprise has or is planning to form.
This section also includes:
Distribution strategy
Projected profit margin or markup
Pricing strategy and justification
Payment terms for customers
Other issues (e.g. warranties, marketing budget)

40. 9. Production Requirement
This section describes the various issues regarding the
production of product or service. It may include:
How and where the company will manufacture and
at what cost?
What physical premises are required?
Will space be owned or leased? At what cost?
How complex the manufacturing process is?
Describe equipment needed and cost.

41. 9. Production Requirement (Cont.)
In some cases, the enterprise may outsource the
production or other materials. Few things to remember:
Describe supply sources and availability
Outline the relevant contract terms
Details about quality control

42. 10. Management & Personnel
To run the enterprise, it must need a management and
some personnel to control the management issues. This
section also includes:
Managers’ names, tittles, responsibilities, background,
experiences, skills, cost etc.
Sketch personnel requirement

43. 11. Intellectual Property
Patent
Copyright
Trademark

44. 11. Intellectual Property (Cont.)
In case of licensing agreement, enterprise should
disclose the name of the licensor, key terms and give
termination or renewal date.
If the concept of the business is scientific, intellectual
property extremely important.
Sometimes business planning associated with
intellectual property must occur prior to a business
concept being developed and validated.

45. 12. Regulations Issues
In this part, enterprise should outline the non-economic
forces that might affect the prospect of the enterprise. It
includes several issues such as:
Key government regulations
Environmental problems and associated cost (if any)
Political stability (if any)

46. 13. Critical Risk Factors
In this part, enterprise has to identify the critical risk
factors of the business by:
SWOT Analysis
Porters Five Forces
PEST Analysis
N.B: Make sure how the enterprise will mitigate those
associated risks!

47. Financial Projections
Balance Sheet Projections
Income Statement Projections
Cash Flow Projections
Break-Even Projections
Capital Requirement &
Strategy

48. Capital Requirement & Strategy
In this step, enterprise has to answer several questions
such as:
How much funding (equity) will the firm need & when?
What projected revenue or assets does the proposed
business have to secure the financing?
What sources will provide the funding, i.e. investors,
lending institutions etc.?
What ratio of debt to equity financing will occur?
When will investors begin to see a return? What is the
expected return on investment (ROI)?

49. Findings & Recommendations
Findings and recommendations part of the feasibility
study should be honest, short and direct. It is
important to note that final recommendations should
be based on the dimensions of the feasibility study
separately. Few things are important in here such as:
Likelihood of success
Projected return of investment
How the risk will be mitigated
Argument based on strong evidence for justification

50. Conclusion
The conclusion of the report should highlight the
contribution of the business to the larger society. Such
issues as employment opportunities, provision of
inputs for industrial development, export potentials,
and revenue to be generated will be addressed by this
aspect.

51. Helping Hands
You cannot prepare a perfect feasibility report without the
help of other parties. Those helping hands includes:
• Business Enterprise Center
• Accountant
• Solicitor
• Banks
• Business advisers or consultants
• Trade associations
• Potential suppliers
• Competitors
• Libraries and Online entrepreneurship recourses

52. Monitoring the Study
Hiring a consultant does not negate the responsibility for
insuring that the feasibility study is conducted properly.
You need to be engaged in the project and the evaluation
process, understand the issues involved, question the
basic assumptions used in the study and challenge the
conclusions of the study. Few things to remember:
Represent the project committee’s needs and interests
to the consultant
Review and clarify what is needed from the consultant
Monitor the work of the consultant
Provide periodic reports to the project committee

53. How to Accept or Reject the Study?
At the end of the study, the authorized party will submit the draft
or final report. It is not uncommon for the project committee to
reject the draft of the report and ask for further clarification and
analysis. So, it is important to determine if it is accurate, relevant
and complete. Few things are important to consider such as:
Understandable and easy to read
Addresses all of the relevant issues and questions
Lists and discusses all of the underlying assumptions of the
project analysis
logically consistent within sections and among sections
Thoroughly researched using good research techniques
Contains all of the relevant information

54. References
• Thomson, Alan (2005), Business Feasibility Study Outline,
Appendix 1, PP: 185-198
• Wikipedia, (2016), Feasibility study, [online] Available at:
https://en.wikipedia.org/wiki/Feasibility_study [Accessed 18 Apr,
2016]
• Hofstrand, Don & Holz-Clause, Mary (November, 2009), When to
Do and How to Use a Feasibility Study
• Hofstrand, Don & & Holz-Clause, Mary (October, 2009), What is
a Feasibility Study?
• Matson, James (October 2000), Cooperative Feasibility Study
Guide, United States Department of Agriculture, RBS Service
Report 58
• W. Behrens, P. M. Hawranek (1995), Manual for the Preparation
of Industrial Feasibility Study, United Nations Industrial
Development Organization

55. Suggested Questions!
1. Why Feasibility Study is important before starting
new business?
2. How to do the Feasibility Study?
3. Describe the dimensions of Feasibility Study?
4. Is there any differences between Business Plan
and Feasibility Study? Explain.
5. What are the factors that influences the exit
strategy viability?
6. Explain B2B and B2C market with real market
examples.

56. Suggested Questions! (Cont.)
7. Differentiate between Patent, Copyright and
Trademark. Explain with examples.
8. Is it necessary to monitor the Feasibility Study?
Give your arguments.
9. “Feasibility Study is a waste of time & money. It’s
not necessary to do it. Let’s start the business first
and see what will happen!”- Do you agree or not?
Explain your arguments.
10. How the risks related to the project will be
determined and reported on Feasibility Study?