Feasibility study Facts for Kids

A feasibility study is like a big check-up for a new idea or project. It helps people figure out if a project is a good idea and if it can actually be done. This study looks at the good and bad parts of a plan, what chances it has, what problems it might face, and what it needs to succeed.

Think of it this way: before you build a treehouse, you'd check if you have enough wood, if the tree is strong enough, and if it's safe. A feasibility study does the same thing for bigger projects. It helps decide if a project should go forward, be changed, or be stopped completely. The main things it checks are how much it will cost and how much value it will bring.

A good study will look at the project's history, what the product or service is, how the money works, how it will be managed, how it will be sold, and any legal rules. These studies usually happen before a project officially starts. They need to be fair and honest so that people who might invest money can trust the information.

What is a Feasibility Study?
Key Factors for Project Success
Other Important Factors
See also

What is a Feasibility Study?

A project feasibility study is a detailed report. It looks closely at five main areas of a project. It also considers its four "Ps," its risks, and its limits like time, costs, and quality rules. The main goal is to decide if the project should happen, be changed, or be stopped.

The five main areas it looks at are:

How the project is defined.
The risks from outside the project.
What the project can achieve.
The specific details and numbers.
The main plans and backup plans.

The four "Ps" are usually:

Plan: What is the overall strategy?
Processes: How will things get done?
People: Who will do the work?
Power: Who makes the decisions?

Risks are things that could go wrong from outside the project, like bad weather. Points of Vulnerability (POVs) are problems inside the project that can be fixed. The limits are things like how much time, money, and quality standards the project has.

Key Factors for Project Success

TELOS is a helpful way to remember five important areas a feasibility study checks. These areas help decide if a project should happen:

T - Technical: Can we actually build or do this project with the tools and skills we have?
E - Economic: Can we afford this project? Will it make money or save money?
L - Legal: Is this project allowed by the law?
O - Operational: How will this project fit with what we already do? Can our team handle it?
S - Scheduling: Can we finish this project on time?

Technical Feasibility

This part checks if the company has the right skills and tools to complete the project. When writing this report, it looks at:

A quick overview of the business.
The specific part of the business being looked at.
The people and money needed.
Possible ways to solve any problems.

It asks if the idea is possible to build and if it follows the law, assuming the cost is reasonable. It also checks the current technical tools and how they can be used for the new system.

Project Needs

Once the way to produce something is chosen, technical experts figure out what the project needs. This includes:

Tools and equipment, like pumps or pipes.
Buildings, storage, and roads, plus their inside designs.
Skilled and unskilled workers, and managers.
How long construction will take, including costs for designs and building.
How much raw material and cash money is needed for daily work and unexpected costs.

Project Location

Choosing where to put a project is very important. Key things to consider are:

Is there enough land, and is it affordable?
Will the project harm the environment? Do we have permission?
How much will it cost to move materials and products to and from the location?
Are there services nearby, like water, electricity, good roads, or expert help?

Legal Feasibility

This part checks if the project follows all the laws. For example, a new computer system must follow rules about protecting people's information. It makes sure the project is allowed by the laws of the land.

Operational Feasibility

This looks at how well a new project will solve problems and use opportunities. It also checks if it meets the needs found when planning the system.

Operational feasibility focuses on how well the new project fits with the current business. This includes the project's timeline, when it will be ready, the company's way of working, and existing business processes. To make sure a project works well, things like how reliable it is, how easy it is to fix, and how easy it is to use must be planned early on.

Time Feasibility

A time feasibility study looks at how long a project will take to finish. A project might fail if it takes too long to be useful. This means guessing how long it will take to build the system and if it can be done by a certain deadline. It checks if the project's timeline is realistic. If a project has a strict deadline, this study helps decide if that deadline can truly be met.

Other Important Factors

Resource Feasibility

This describes how much time is available to build the new system. It also checks when it can be built and if it will get in the way of normal business. It looks at the type and amount of resources needed, and how different parts of the project depend on each other.

Financial Feasibility

For a new project, checking if it's financially possible means looking at:

The total estimated cost of the project.
How the project will get its money, like how much comes from loans versus owners' money.
Any other businesses the owner already has.
How much money is expected to come in and how profitable the project will be.

The financial check should show:

All the details of what will be bought and how easily it can be turned into cash.
How quickly things can be turned into cash.
How much money the project can get and how it will pay back loans.
How sensitive the repayment ability is to things like:
- Sales slowing down a little.
- Sales slowing down a lot.
- Costs going up a little.
- Costs going up a lot.
- Bad economic conditions.

Market Research

Market research is one of the most important parts of a feasibility study. It checks if there's a real market for the product or service. It convinces people that enough customers will want what the project offers. If there isn't a good market, then the project shouldn't happen. Market studies usually guess how many products can be sold and when the project should start. The study ends with a report that explains all the findings and recommendations.

Feasibility study facts for kids

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