How much wood would a woodchuck chuck if a woodchuck could chuck wood? How much would the wood cost and how dependable is supply? Does the wood have a “best by” date? How long would it take to do the chucking? And what about woodchuck retention, it is a tough market out there.
If there are wood chucking businesses (and we do have a client that clears and hauls felled trees and wood debris), they might want to consider a feasibility study and business plan before diving into an expansion or other major project. Feasibility studies and business plans are commonly needed (or required) for analysis and decision purposes such as the launch of a new business line, product or service line expansions, geographic expansion, or attracting capital. Likewise, target readers range from boards of directors for project approval purposes, management for internal planning, lenders or potential investors, grant or other assistance programs, and a number of others.
But what are the differences between a feasibility study and a business plan, and how do the two relate? A business feasibility study is a detailed analysis of the viability of an idea or concept for a business venture. Once feasibility has been determined, a business plan documents the operational and financial objectives of the venture and the detailed plans to achieve them. In short, a business feasibility study can be looked at as “Can we?” while the business plan is “How to.”
It is common for the “can we?” and “how to” assessments of a project to be combined into one document, but many key aspects of feasibility should be determined before diving too deep into the “how to” of a venture.
Some years ago we did a feasibility study for a large California dairy operation seeking to grow returns by introducing value-added products rather than strictly selling bulk fluid milk. The idea? hom*ogenize and pasteurize their own milk (some in flavors), put it in glass bottles, and deliver it to people’s doorsteps.
After I got over my shock, we set about exploring key aspects of feasibility: Is there demand for it, and at what price points? What would it take for the company to successfully make and bottle the products? How would it be marketed? Can bottles be returned and sanitized sufficiently for safe re-use?
As you might imagine, there was not much industry data to lean on; Nielsen and IRI have no market data for home delivered milk, there are no trade associations for the home milk delivery business, and not a lot of equipment and bottle suppliers focus on that niche of the otherwise huge dairy industry.
It was a challenge. We designed a market survey and partnered with the marketing program of a local community college to take consumer surveys at farmers’ markets and other events to determine potential market interest and price points. We contacted some of the few similar operations we could find in the United States. We looked into the availability of bottles approved for both milk and multiple re-use.
Ultimately, we found the project feasible, and with this assurance developed a business plan to lay out the “how to-s.” In the years since, the company has been a great success with stunning growth.
Tempting as it may be to dive straight into the “how to,” unless you have other supportable reasons to believe a project is feasible from such key aspects as demand, production, distribution, marketing, capital, and a thorough risk assessment, it is best to spend some time determining “Can we?”
I tell our business feasibility study clients that one result they should be prepared for is “not feasible.” It happens, but it’s still a lot less trouble and risky than jumping in without due diligence. Morrison has conducted feasibility studies and business plans for nearly 20 years for a wide variety of needs and intended readers. We’re always happy to bounce around ideas and help explore what might – or might not – work for a business’s needs.
About the Author
Brent Morrison is the Founding Principal at Morrison. To get in touch with Brent, please find contact information for Morrison here.
FAQs
Feasibility Study vs.
What is the difference between a feasibility study and a business plan? ›
In summary, a feasibility study is a preliminary assessment of the potential success of a project, while a business plan is a detailed document that outlines how a business will be run.
What is the difference between a feasibility study and a business plan on Quora? ›
A feasibility study is a way to learn if something is possible or not. You have to take into account all the factors and evaluate the outcome. A business plan is similar to this, but the difference is that with a business plan you have to show how will it work. You can't have "if" in a business plan.
What is the difference between business research and feasibility study? ›
A feasibility study helps to identify potential obstacles and ensure regulatory compliance, while market research provides valuable insights into customer needs, competition, pricing, and market trends.
What is the difference between a business case and a feasibility study? ›
A feasibility study looks at the technical feasibility, financial feasibility and operational viability of a proposed project. A business case looks at the financials of a new venture to determine if it is financially viable.
What are the different parts of feasibility study and business plan? ›
There are five main types of feasibility studies: technical feasibility, financial feasibility, market feasibility (or market fit), operational feasibility, and legal feasibility. Most comprehensive feasibility studies will include an assessment of all five of these areas.
What is the purpose of a feasibility study in a business plan? ›
A feasibility study is an important first step in starting a new business. It is a detailed examination of whether or not a proposed business venture is likely to be successful. A feasibility study aims to provide information that will help business owners make informed decisions about their new venture.
What are the similarities between a feasibility study and a business plan? ›
Key Similarities Between a Feasibility Study and a Business Plan. Planning Tools: Both are essential planning tools used in the decision-making process of starting or managing a business or project. Research-Based: Both require extensive research and analysis of the market, competition, and internal capabilities.
What is the difference between a business plan and a project? ›
A business plan documents your business goals, strategies, and marketing plans for the long-term. It is also a template that can be used to secure funding from investors. A project plan, on the other hand, outlines specific objectives and tasks that need to be accomplished in order to achieve those goals.
What is the difference between feasibility study and pre feasibility study? ›
Scope A prefeasibility study scans a series of options and determines the best one in the set. The feasibility study analyzes in depth the best solution from the prefeasibility phase.
A feasibility report is the first step and after that a business plan is made to be implemented, without feasibility report a business plan cannot be made. A feasibility study contains computations, research, and projected financial forecasts for a company possibility.
What is a feasibility study? ›
A feasibility study analyzes the viability of a project to determine whether the project or venture is likely to succeed. The study is also designed to identify potential issues and problems that could arise while pursuing the project.
What is the difference between feasibility study and concept study? ›
The primary outcome of the feasibility study will be the key to what your new system will look like. You conduct a proof of concept (POC) on a potential solution based on the feasibility study findings. Meanwhile, a minimum viable product (MVP) is created after a successful proof of concept.
What is the difference between a business plan and feasibility study? ›
A business feasibility study is a detailed analysis of the viability of an idea or concept for a business venture. Once feasibility has been determined, a business plan documents the operational and financial objectives of the venture and the detailed plans to achieve them.
What is the difference between a business plan and a case study? ›
In a nutshell, a business case concerns an action, while the business plan focus is the business. Firstly, use the business case instead to answer “What happens if…?” questions like these: What are the financial outcomes if we choose the IBM proposal?
What is an example of a feasibility study? ›
For example, David wants to launch a new home decor business. So, he evaluates factors like potential profitability, effect on the environment, legal requirements, etc. It is his feasibility study, and based on the findings, he can decide whether or not to move forward with the project.
How do you determine the feasibility of a business plan? ›
To conduct a feasibility analysis, you will need a detailed understanding of:
- your business idea, product or service.
- the nature of the market.
- the needs of your customers.
- the costs involved and the revenue you are forecasting.
- your business model and plan.
- the human resources and skills available to support the business.
A feasibility study is a detailed analysis that considers all of the critical aspects of a proposed project in order to determine the likelihood of it succeeding. Success in business may be defined primarily by return on investment, meaning that the project will generate enough profit to justify the investment.
What do you write in a feasibility study? ›
A feasibility study typically includes an assessment of a wide range of factors, including the technical requirements of the product, resources needed to develop and launch the product, the potential market gap and demand, the competitive landscape, and economic and financial viability.
