How Does a Feasibility Study Work?

The Purpose of a Feasibility Study

A feasibility study covers many disciplines, from science to law to real estate. It is aptly named, as it analyzes the potential, or feasibility, of an idea. Ideally, a feasibility study will show the economic, environmental, and practical viability of a project or idea, so that any problems can be assessed before continuing with the project. A feasibility study template (provided as a link below) can help newcomers with their first assessment.

Decide on Alternatives

Identify any alternatives to the proposed action. This is sometimes called a pre-feasibility study. For consumer products, this is also called a market assessment. After evaluating many possible solutions, the most viable alternatives are chosen for more in-depth study. The option of taking no action is also considered.

Evaluate the Alternatives

Pursue all viable alternatives, including no action, in order to give good perspective to the proposed action. Economic and other concerns are often summarized in a table that compares the impacts of all ideas. Through this analysis, policy makers can ensure that their decisions are based on facts and knowledge of all viable solutions.

Assess the Alternatives

Assess the strengths and weaknesses of each alternative. One alternative may be the best choice, but not economically feasible. In a real-world situation all aspects of each alternative must be taken into consideration. Often a decision is not crystal clear even with analysis. The analysis will help balance the risks and the costs of each alternative. Some feasibility studies use a number ranking system for each area of impact and combine the totals to assess the best solution.

Decide to Go or No-Go

Make a Go or No-Go decision based on the information presented. The feasibility study concludes with a decision to use the proposed action or go with one of the alternatives. A feasibility study should not be confused with a business plan. In fact, a feasibility study should be done before a business plan to see whether or not the business is a good idea.

Resources

• What is a Feasibility Study?
• Feasibility Study Template
• Hudson River Feasibility Study