Tag Archives: feasibility studies

Starting With The End In Mind

In many aspects of business today, it is good advice to plan with the end in mind.  That also applies to starting your business, and why a professional feasibility study can identify if the end you have in mind is realistic … and viable.


A basic example:  Let’s say you have an idea for a product that fills a niche currently under-served or non-existent in the consumer world.  Your goal is to start the business, establish the product in the market, grow sales volume, and eventually sell the business off to a major company at a $500 million dollar or higher price point.

Seems like a great idea until you’ve invested thousands of your own money, borrowed as much as you can, and guaranteed thousands more, only to discover that some other company beat you to market, sold “your” invention to the corporation you were thinking might buy yours, and already has the lion’s share of the consumer market locked up.

You’re forced to find alternative markets, retool a different product (if you can), changing your “end result” objective, or filing for bankruptcy.  You may have wasted your life’s savings and possibly those of other family members as well.

A feasibility study can provide you with the research and the perspective, along with the financial data to avoid such disasters.  When you engage a professional firm such as Brand Irons to conduct a feasibility study, it is important to share your end result up front.

Knowing that your objective is to serve a need is critical to establishing a viable business model.  However, knowing what you want as the end result is the element that provides you with the driving motivation to build your business.

One of the most vital, and often discouraging, revelations identified in a feasibility study is the learning that the business concept has only a marginal commercial viability.  This is discouraging because it often crushes the dream of someone’s idea.  It is also vital in that it dissects and reveals the inherent flaws in the concept.

An example:  A client wanted to create and build an elite level indoor skateboard park in a large city’s suburbs.  The rent for the space requirements, the cost to build the custom-designed facility, and the operational expenses were all upper end.  What the feasibility study revealed was the inherent flaw:  Skateboarding enthusiasts prefer to be outdoors when they can and they don’t like to spend money to skate!

More on this later, but consider a feasibility study for your business idea.  Whether it’s for starting up a new venture or expanding an existing one, take the time to think things through.  If it’s a good, viable idea today, it should still be feasible in a month or two.

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Will Your Great Idea Fly?

If you have a fabulous idea for a new business or an expanded product line for your existing venture, take some time to think things through before you invest a lot of time, money, and emotion in moving forward.  Why?  Research has shown that roughly one out of every 50 business ideas is commercially viable.

How can you find out if your idea will generate revenue, be accepted by the consumer, and be profitable?

The best method is a feasibility study.

Although there are many types of feasibility studies, and some you can be do by yourself, it is best to employ a professional consultant to assist you.  The person conducting your feasibility study should be an independent, third party consultant without a vested interest in your project or concept.  That enables them to retain impartiality and look at your idea from two main perspectives:  1)  Will the product or service be accepted by the consumer, and to what extent?; and, 2) Will the product or service be profitable and generate a positive return on your investment, and when?

Having someone doing the business and market research independently removes the emotional aspect of your project or idea.  You have come up with the concept, sketched out ideas, thought about names, and become emotionally attached to the idea.  This is good, but should be reserved for after you’ve determined whether the concept is commercially viable.

What does a feasibility study consist of?

1) A major aspect of your feasibility study is determining if there is a viable market for your product or service.  You need to know more than who is likely to purchase the product.  You need to understand where those consumers are in terms of their buying power, repeating purchases, personal preferences, and the media that will influence their buying decisions in a positive fashion, among other information.

2) A second major aspect of a feasibility study is the financial viability of your idea.  What will be the costs associated with producing the product or delivering the service, including manufacturing, staffing, packaging, selling, administration, and marketing, among others?  What will the market bear in terms of pricing?  At what point, if any, will the business break even and start generating profits.

The key to the financial perspective is being realistic in determining the projections.  Similar to thinking “everyone” needs your product or service is the thought that you can sell 20,000 widgets for $25 apiece when the industry has been successful selling them at $15 each.  You may stick with that projection, but will have to justify the $10 per unit difference to someone, including the consumer.

3) Other aspects of your feasibility study look at the overall economic conditions, how many jobs will be created or needed, the management structure of your venture and whether you have the experience required to manage the operation.

In short, a feasibility does cost you some money but in the long run it can save you money, time, and the heartache of failure.  It becomes a matter of knowing how much you are willing to invest to determine if your idea is commercially viable.

Consider this:  Would you rather spend $10,000 and two months to learn the idea isn’t commercially viable, or invest $200,000 and two years of sweat equity to discover the same outcome?

The role of the consultant in the process is to present every aspect of your idea in a fair, impartial and unbiased report so that you can make an intelligent decision.  Whether you elect to move forward with your concept or send it to the trash bin is solely your decision.

That decision is best made from a business perspective, leaving emotions aside.  Once you have made a decision to move forward, emotions must come back strong as you will need to invest your heart and soul in your exciting new venture.

Ask Brand Irons about their experience conducting feasibility studies.