Is It A Good Idea?

How good is your business idea?

One of the best methods to validate your concept is with a feasibility study. Basically, a thorough, professional study answers the question of whether your idea is viable and worth pursuing as a feasible endeavor.

If your idea is for a business start-up, think how valuable it will be to know - up front - that the concept will not work. In conducting a feasibility study for a client who wanted to convert a vacant manufacturing facility into a community center at a cost of $750,000, the $10,000 cost provided valid information that suggested it may not be viable. Feasible, yes. Viable, no. The client had to make the determination, but the feasibility study wound up saving a lot of time and money ... and the potential heartache of investing 3/4 of a million dollars only to fail within a short period of time.

If your business idea is feasible, it generates adequate cash flow and profits, withstands the risks involved, remains viable over the long haul, and achieves your objectives.

A professional feasibility study:

1. Evaluates alternatives.;
2. Assesses market potential;
3. Analyzes risks and rewards; and,
4. Provides justification for a go/no go decision.

A feasibility study is not a business plan. The business plan follows the market research that says it is a viable concept and the "go" decision has been made. The plan then determines how the business is structured, developed, implemented, and managed to profitability.

Among the reasons to do a feasibility study:

• Clarifies the concept;
• Identifies possible alternatives;
• Investigates strengths, weaknesses, threats and opportunities;
• Identifies influential factors for proceeding;
• Enhances the probability of success;
• Provides quality information to aid decision making;
• Provides business viability documentation; and,
• Assists in securing investors or outside funding.

A feasibility study is simply a good business practice. Study successful businesses and you will find they dipped their toes in the pool before diving in.