A Feasibility Study (Feasibility Study) estimates the feasibility of planned projects based on existing risks.
Construction of a feasibility study
In the framework of a feasibility study, it is examined whether a project or company is executable and, more importantly, whether it is economically feasible. Can you determine a financial safety net? Is there enough equity capital available? To what extent will cost risks negatively affect the project in the future? Other key issues that are examined in the feasibility study include the following:
- Could legal circumstances cause problems?
- Is the time available for the implementation of the project sufficient?
- Can people, machines, materials and resources be provided on time?
- With technical projects: is the plan technically feasible?
- Is the project feasible in terms of organization?
Many times, a feasibility study is conducted for many projects. The project that looks more promising. Many times, at the same time as the feasibility study, a risk analysis is carried out.
In a feasibility study, the different projects or possible solutions are analyzed and valued according to their implementability. For each project, both the chances of success and the risks are investigated. On this basis, a recommendation can be given for each project. If it is clear that a project is viable, the company can start with detailed planning. If a project is deemed not feasible, it should be omitted or thoroughly edited after the feasibility study.
A feasibility study will be conducted to find the project that creates the optimal response for the company. At the same time, possible risks must be discovered so that they can be dealt with in a timely manner. At the same time, a feasibility study prevents any unprofitable investment.
Advantages and disadvantages
A Feasibility Study has many advantages:
- Structured approaches for new projects.
- Find alternative solutions.
- Decrease in the number of possible projects.
- Identification of the reasons that speak against a project.
- Development of the bases for the subsequent implementation of the project.
- Basis for the decision of potential investors for an investment in the project.
Many times, at the time of completing a feasibility study, objections such as lack of time, high costs or previous analysis are introduced into the study. Regardless, a feasibility study should focus on the current project. Outdated tests may no longer be reliable.
Importance for online marketing
The feasibility studies will also be used in online marketing to find out which projects should be put into practice. For example, if a business is considering the use of more expensive URLs, they can conduct a feasibility study to review the potential value of URLs, and how they can monetize it. Pre-investment studies also play an important role in e-commerce. For example, when a company wants to make changes to an online store, they have to pay attention to the impact for the user and, therefore, usability.