Shark Tank was invented for a reason.
A famous quote goes along these lines - "Execution is more important than planning. Planning is more important than ideas."
There can be multiple interpretations of the saying (as with any quote), but the essence of it seems to be the importance of coming up with an idea that has a clear return on investment (ROI) and is implemented in a way that sets the business up for success.
Think of feasibility studies as an approach that boosts the value of an idea and prepares it to perform at its optimal level, thus leaving the essence of our quote intact. Feasibility studies are an integral part of the ideation, planning, and execution process, and when combined with technology like project management software, every project delivers on its objectives.
What is a feasibility study?
A feasibility study consists of research conducted before the approval of a project. It is essential to the project life cycle development as it helps determine the likelihood of success before you’ve spent your resources on a potential lost cause.
The study helps determine a project's viability by looking at cost, resource requirements, return on investment, and necessary business factors to ensure its practicality and use cases.
What is the purpose of a feasibility study?
You have an incredible project idea but are unsure whether it aligns with current business goals - so do you give up? No!
You get to workshop your idea through a feasibility study to identify the project's strengths, weaknesses, and overall outcomes.
The aim of feasibility studies is to assess project objectives and opportunity costs to help choose the best alternative action. Before executing any business proposition, it is critical to check whether the plan can be achieved by the organization. Feasibility studies simplify project estimation and potential roadblocks by considering various factors, such as available resources, competencies, costs, and time frames.
By analyzing business performance and predicted outcomes, feasibility studies reduce the risk of failures and help bridge gaps in existing business models. Additionally, they force stakeholders to think through every idea in detail to make it easier to secure investment, improve performance, and make a strong case for the proposition.
Types of feasibility studies
Feasibility studies are essential to determine the opportunities and threats associated with the proposed business idea. Since the scope of evaluation can depend on the project and type and size of the company, feasibility studies are categorized into four main types.
- Technical feasibility: This study answers the question, "Are the resources this project requires accessible?"
The technical feasibility study lists the tools and labor needed to execute the idea successfully. Some projects require while complex ideas may benefit from visualizations like Gantt charts.
- Financial feasibility: The cost evaluation study answers the question, "How much will the resources for the project cost?"
Assessing financial feasibility is critical to understanding the estimated income from the project, managing budgets, and determining the true cost of the project you hope to undertake.
- Market feasibility: A market assessment study answers questions like, "Who is the target audience for this project?" and "Is this the right market environment to launch this project?"
Carrying out market research surveys minimizes the risk investments, helps identify trends, and is key to staying ahead of competitors when implementing new strategies.
- Organizational feasibility: This part of a feasibility study seeks to answer the question, "Who is working on this project, and in what role?"
Outlining the organizational structure of a project is important to evaluate the ability of the company's management team and their areas of interest and expertise.
How to conduct a feasibility study
Feasibility studies consider all project factors to determine the likelihood of a team achieving its goals successfully. They help in answering questions such as:
- Is the project cost-efficient?
- Will the current state of the economy allow for success?
- Does it make sense to pursue this venture at this particular time?
Having these answers helps assess whether your proposed project or strategy is a necessary and practical solution.
To conduct a feasibility study, there are 3 main steps.
1. Define project goals
Start your feasibility study by defining the project and outlining its goal and deliverables. A best practice to follow is to use the goal-setting process to evaluate necessary project steps.
Depending on where your company puts the feasibility study in the project life cycle, your project sponsors may have to choose between several studies to decide which ones to execute. By clearly describing your proposed solution, you can increase the chances of stakeholders picking your suggested course of action.
2. Run a preliminary study
The most important aspect of a feasibility study is to determine the project's true feasibility by conducting preliminary research.
For example, let's assume you are trying to get buy-in from senior leadership on redesigning the website. Before diving head first into setting up meetings with the C-suite, take a few steps back and analyze the various requirements for the venture. Make a detailed plan regarding the rationale behind the redesign, headcount required to help the project, necessary tools, and estimated time and cost.
Collect as much data as possible in the early stages of the study to create a strong value proposition. Make sure to note any risk factors and obstacles identified, along with probable solutions to nudge stakeholders towards giving you the green flag to proceed.
One of the biggest business considerations when launching new ideas is financial. This is why it is imperative that the preliminary analyses include a projected revenue that takes into account operating costs and net profits.
3. Perform a business analysis
There can be a thousand incredible ideas, but if only 5 of those can be achieved and implemented with the resources and goals of the business at a particular time, those are your projects.
When thinking of new ideas and endeavors, it may be helpful to assess whether the project aligns with the greater business goals or is more suited to a specific team's roadmaps. Projects impacting the organization's bottom line are more likely to be moved forward rather than ideas that benefit a small group. For example, a new product launch strategy will receive more attention than the request for an expensive tool set for a single department.
Things to consider during a business analysis
- Executive summary: Detailed description of the project, proposition, or plan.
- Project financials: Provide information regarding project costs and expected ROIs through financial analyses.
- Marketing strategy: Outline target personas, plans, and tools required to market the project.
- Staffing requirements: Draft an organizational plan detailing human capital needs for the project.
- Schedule and timeline: Include project milestones and interim markers for project completion.
Focus on what's feasible
Back to why Shark Tank was invented - to stop well-meaning people from draining their funds on impractical ventures that can't be scaled.
Taking a few extra moments to analyze an idea in detail and determine the best way to move forward is sometimes the only way to ensure success. Feasibility studies are powerful tools for project management and can help inculcate critical thinking and problem-solving for everyday tasks.
The first step to diving deep into small and big ideas is to conduct a feasibility study. Ready to bring your project to life? Start with the tried and tested project management methodologies.
