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Feasibility Study

What is a feasibility study?


This is a systematic analysis of all factors that
influence the probability of success of a specific
undertaking. It is designed to determine whether
a project is feasible, and if found feasible, to find
out the degree of probability. It covers the
market, technical, financial and management
aspects of the business.
Parts of the Feasibility Study
Chapter 1
Introduction
Statement of the Problem
Significance of the Study
Scope and Delimitation of the Study
Definition of Terms
Review of Related Literature and Studies
Chapter 2
The Marketing Aspect
Chapter 3
The Management Aspect
Chapter 4
The Technical Aspect
Chapter 5
The Financial Aspect
Chapter 6
The Socio-Economic Aspect
Chapter 1
Introduction
States the brief history of the line of business you are
planning to start.
States an introduction of your product/business.
States the reasons why you want to start the business
Statement of the Problem
Enumerates the questions to be answered at the end
of the feasibility study
Make atleast 3.

Significance of the Study


Enumerates the groups of people that will benefit
from the study.(atleast 3 groups of people)
States the reasons how and why they will benefit
from your study.
Scope and Delimitations of the Study
This section states the focus of your study.
This includes what you will and what you will not
include in your paper.
You may include the products/services that you
will/will not offer in the business.

Definition of Terms
Defines terms used in your study, terms that have
specialized meanings which should be stated in order
not to have multiple interpretations.
Example:
Filmmaker. A person that directs or produces a film.
Review of Related Literature and Studies

Related Literature may be any article that can


support the validity of your paper. Give atleast 3.

Relates Studies refer to any study/thesis that can be


a good basis of your study. Give atleast 2.
Chapter 2- The Marketing Aspect
This is considered as the most indispensable part of a
FS.

Objectives of the Marketing Aspect


1. To enumerate the opportunities and threats of the
business.
2. To classify the strengths and weaknesses of the
company.
3. To define the different factors in the external
environment that is expected to affect business
operations.
The Marketing Aspect
Marketing analysis
Why will your product/business be successful?
What situations will affect the success of your
project?

Opportunities
What are the special characteristics of your product/
business?
The Marketing Aspect
Threats
What can be some problems encountered by the
business?
Strengths
How can the company compete with others?

Weaknesses
What can be the loopholes of your product/ business?
The Marketing Aspect
Demand Analysis
Why will the consumers patronize your product?
Are the consumers willing and have the capability to
pay for the product?
Supply Analysis
Who and where will your supply come from?
Will there be enough supply to cater to your
demand?
Chapter 3- The Management Aspect
This chapter deals with the organization and it is in this
aspect that the proponents identify the key officers and
key personnel, basic considerations in forming
organization, form of ownership, organizational chart,
project scheduling and perform job analysis.

Objectives:
1. Identify the form of ownership to be adopted
2. Know the project originators of the business
3. Present job descriptions and job specifications of the
business.
The Management Aspect
Project Schedule
Divides each part of the plan into activities citing its
covered period as well as the tasks expected to be
finished in each activity.
Ex. Activity 1: Feasibility Study Preparation
Period Covered: June- September 2014
In this period, the proponents spent their time collecting
data through researches, surveys, interviews, observations
and other possible ways to know the possible outcome and
viability of the proposed product.
The Management Aspect
Form of Business Ownership
Sole/partnership/corporation
Internal Organization
*Manpower/ Job Analysis
-states the qualifications and requirements for a particular job (job title,
description and job specification)

Ex: Job Title: Accounting Officer


Job Requirement:
-college graduate
-atleast 6 months experience as accounting officer
Job Description:
- handles the money received from day-t-day operation of the business
- supervises the preparations of the statement of account and maintain the
accounting records.
Salary: 12, ooo php/month
Chapter 4- The Technical Aspect
This part determines the technical soundness of a business. It gives
all the details necessary for the business to operate.

Technical Specifications of the Product


What is the main product?
What is it made of?
Describe it physically together with its container (if, applicable)

Raw Materials
How are the raw materials bought/gathered?
Where do the materials come from? Why do you buy it from there?
The Technical Aspect
Building and Facilities
Where will the operation of the business be? House? Building?
Is it rented or owned? How much?
Will it be bought or renovated? By how much?

Office and Plant Location


Where exactly will the location be?
Chapter 5- The Financial Aspect
This part shows the financial standing of the business and its
viability in the market.

Objectives:
Discuss the needed capital.
Discuss the projected income of the business.
Determine how many years it will take to recover the
investments.
The Financial Aspect
Statement of Assumption
Ex:
1. Projected sales is 80% of the projected production budget.
2. Sales and purchases are on account.
3. Account receivables are collected next month after the sales.
4. Accounts payables are paid next month after the purchases.

State the Cash Flows of the business:


Capital
Expenses
Projected (Expected Income)
Chapter 6- The Socio-Economic Aspect
Ex:
Employment and Income:
The proponents decided to hire workers in the vicinity of
Tanay, Rizal which is also their target market. The business can
benefit the families by giving appropriate amount of salary with
favorable benefits that can help improve their standard of living.

Government
The business will fulfill its obligation by paying taxes
promptly and accurately. Also, the business can help people in
times of calamity by giving donations.
Chapter 6- The Socio-Economic Aspect
Ex:
Community:
The community can benefit from the business for the owners
can sponsor some of the communitys projects or have some
scholarship grants.

Social Implication
The business will help generate the income for the
community and at the same time, cultivate creativity of the
Filipino people.