feasibility analysis and business plan

• Accountancy
• Business Studies
• Organisational Behaviour
• Human Resource Management
• Entrepreneurship

Difference between Feasibility Study and Business Plan

Feasibility Study and Business Plan are essential tools in the business development process. They serve different purposes and are conducted at different stages. A feasibility study helps determine the viability of a business idea; whereas, a business plan provides a detailed roadmap for executing that idea and achieving business goals.

What is a Feasibility Study?

A feasibility study is a comprehensive assessment conducted at the early stages of a business idea or project to evaluate its potential viability and identify potential risks and challenges. The primary purpose of a feasibility study is to determine whether the proposed business venture is feasible and worth pursuing further.

Features of the Feasibility Study are:

• Market Analysis: Feasibility Study evaluates the target market , including its size, growth potential, demographics, and competition. This involves researching customer needs, preferences, and behavior to assess demand for the proposed product or service .
• Technical Feasibility: A feasibility study assesses the technical requirements and capabilities needed to develop and deliver the product or service. This may involve evaluating technology, equipment, facilities, and expertise required for production or implementation.
• Financial Feasibility: A feasibility study conducts financial analysis to estimate the costs involved in starting and operating the business, as well as potential revenue and profitability. This includes preparing financial projections, such as income statements , cash flow statements , and Return on Investment (ROI) calculations.

What is a Business Plan?

A business plan is a comprehensive document that outlines the goals, strategies, operations, and financial projections of a business. It serves as a roadmap for the organization's future direction and provides a detailed blueprint for how the business will be structured, managed, and operated.

Features of a Business Plan are:

• Executive Summary: A business plan gives a brief overview of the business concept, objectives, products or services offered, target market, competitive advantage, and financial projections.
• Company Description: It gives detailed information about the business, including its history, mission statement, vision, values, legal structure, location, and ownership.
• Market Analysis: A business plan is formed after analyzing the target market, including its size, growth potential, demographics, buying behavior , market trends, and competition. This section also outlines the business's market positioning and competitive strategy.

Feasibility Study and Business Plan - FAQs

When should a feasibility study be conducted.

A feasibility study is typically conducted at the early stages of developing a business idea or project, before significant resources are invested. It helps entrepreneurs and stakeholders make informed decisions about whether to proceed with the venture.

Who conducts a feasibility study?

Feasibility Studies are often conducted by entrepreneurs, business owners, project managers, consultants, or other professionals with expertise in the relevant industry or field. They may also involve collaboration with specialists such as market researchers, engineers, financial analysts, and legal advisors.

When should a business plan be developed?

A business plan is typically developed after a feasibility study has been conducted and the decision to move forward with the business venture has been made. It provides a detailed blueprint for executing the business idea and achieving its objectives.

Who uses a business plan?

Business plans are used by entrepreneurs, startups, existing businesses, investors, lenders, partners, employees, and other stakeholders interested in understanding the organization's goals, strategies, operations, and financial prospects.

What are the benefits of conducting a feasibility study?

Benefits of conducting a feasibility study include minimizing risks, identifying potential challenges and opportunities, validating assumptions, attracting investors or lenders, guiding decision-making , and increasing the likelihood of success for the proposed business venture.

Similar Reads

• Difference between Feasibility Study and Business Plan Feasibility Study and Business Plan are essential tools in the business development process. They serve different purposes and are conducted at different stages. A feasibility study helps determine the viability of a business idea; whereas, a business plan provides a detailed roadmap for executing t 5 min read
• Difference between Businessman and Entrepreneur The two terms Businessman and Entrepreneur are used interchangeably but there exists major differences between both of them. A Businessman is someone who starts or operates a business with a business idea that already exists in the market whereas an Entrepreneur is an individual with an exclusive id 3 min read
• Difference between Business, Profession, and Employment What is Business?Business is an economic activity that includes activities related to the sales and purchase of goods and services on a regular basis with the objective of earning profit. For example, fishing, farming, etc. According to Wheeler, "Business is an institution organised and operated to 3 min read
• Difference between Business Plan and Business Proposal Business Plans and Business Proposals are important documents in business development and decision-making, they serve different purposes, audiences, and scopes. A business plan outlines the overall strategy and operations of a business, whereas a business proposal focuses on presenting a specific id 5 min read
• Difference between Forecasting and Budgeting Forecasting and Budgeting are essential tools for financial planning, management, and control in organizations, each serving distinct purposes and methodologies. Forecasting involves making educated guesses about future events that could affect a company; whereas, Budgeting is the process of outlini 4 min read
• Difference between E-business and Traditional Business E-business and traditional business are two ways of conducting business through the Internet and local stores respectively. Even though both are ways of performing business and selling goods and services, they are different from each other. Table of Content What is E-business?What is Traditional bus 3 min read
• Difference between Planning and Forecasting Planning and Forecasting are both essential components of management, but they serve different purposes and involve distinct processes. Planning is deciding in advance what to do, how to do it, when to do it, and who is to do it; whereas, Forecasting involves making educated guesses about future eve 5 min read
• Difference between Business Continuity Plan and Disaster Recovery Plan Business Continuity Plan and Disaster Recovery Plan are two essential components of Risk Management. They help in ensuring resilience at times of unexpected disruptions. A Business Continuity Plan (BCP) is a risk management strategy that outlines the procedures and protocols of an organization, ensu 6 min read
• Difference Between Data Science and Business Intelligence While they have different uses, business intelligence (BI) and data science are both essential for making data-driven decisions. Data science is the study of finding patterns and forecasts through sophisticated analytics, machine learning, and algorithms. In contrast, the main function of business i 4 min read
• Difference between Business Intelligence and Data Mining Business Intelligence (BI) alludes to advances, applications, and hones for the collection, integration, examination, and introduction of business data. The reason for Commerce Insights is to bolster superior trade choice-making. Basically, Trade Insights frameworks are data-driven Decision Support 4 min read
• Difference between Data Visualization and Business Intelligence Data visualization is one of the analytical tools used in data science and it simply refers to the process of representing data graphically to allow data communications and expression of patterns. The tool aims to make the charts, graphs, and maps simple to understand as well as to discover the fact 8 min read
• Difference between Planning and Strategy Both planning and strategy play pivotal roles, though they cater to different aspects of organizational success. Planning is the tactical process of mapping out precise steps to execute short-to-medium-term objectives effectively, focusing on the details of day-to-day operations. In contrast, strate 6 min read
• Difference Between Product Analytics and Business Intelligence Product Analytics involves examining the product features, quality, appearance, costs, and many other aspects. It is conducted by product managers and potential buyers. On the other hand, Business Intelligence involves strategies that are used by enterprises for data analysis and management of busin 4 min read
• Difference Between Data Science and Business Analytics Data Science: It is the complex study of the large amounts of data in a company or organizations repository. This study includes where the data has originated from, the actual study of its content matter, and how this data can be useful for the growth of the company in the future. The data related t 3 min read
• Difference Between Business Intelligence and Data analytics Business Intelligence: The term Business Intelligence (BI) alludes to advances, applications, and hones for the collection, integration, examination, and introduction of business data. The reason for Commerce Insights is to bolster superior trade choice making. Basically, Trade Insights frameworks a 5 min read
• Difference Between PSP and TSP Software is the set of instructions in the form of programs to govern the computer system and process the hardware components. To produce a software product a set of activities is used. This set is called a software process. In this article, we will see a difference between PSP and TSP. What is Pers 7 min read
• Difference between Standing Plans and Single-Use Plans Standing Plans and Single-Use Plans are two different types of plans. The former is a plan which is made for activities that occur after regular intervals of time; however, the latter is a plan which is made for a one-time event or project. Table of Content What is a Standing Plan?What is a Single-U 3 min read
• Difference between Mission and Vision Every business or organisation starts with some basic motives that they plan to achieve during a particular course of time. Goals can be classified into two types, Missions and Visions. Mission can be described as the quantitative goals of the organisation which needs to be achieved in the near futu 3 min read
• Difference between Policies and Strategy Policies and Strategy are two types of Standing Plan. Policies are the general statements that guide thinking and channel energy toward a particular direction. However, Strategies are the unified, structured, and integrated plans that are designed to achieve specific objectives of an organization. W 2 min read
• Difference between Business Intelligence and Business Analytics 1. Business Intelligence : The term Business Intelligence (BI) alludes to advances, applications, and hones for the collection, integration, examination, and introduction of business data. The reason for Commerce Insights is to bolster superior trade choice making. Basically, Trade Insights framewor 4 min read
• Commerce - Difference Between

Improve your Coding Skills with Practice

What kind of Experience do you want to share?

10 Feasibility study and business plan differences you should know

by Naiyer Jawaid | Nov 8, 2021 | Development , Real Estate | 5 comments

Feasibility study and business plan differences are subtle. In this post we will discuss 10 differences will help you to evaluate and differentiate between a feasibility study and a business plan.

Do you know what is a feasibility report? Do you know what is a business plan? Can you easily differentiate between a feasibility report and a business plan?

It’s easy! Just read out through the article and it will all be easy.

Let’s start by learning about a feasibility report:

A feasibility study is a formal document that assist in the identification and investigation of a proposed project. We can identify the project's weaknesses and strengths with the support of a feasibility study report, which saves us time and energy. We can determine whether the suggested idea will be lucrative and practicable in the future.

Before investing in a project, it is critical to determine if the project will be beneficial in the long run. The organization also needs to know how much the project will cost. Overall, a feasibility analysis indicates whether the firm should invest or continue with the project.

You should also like to read When to do feasibility study?

Now let us learn about business plan:

A business plan is a formal document that contains the goals/ objective of the business, the time in which the goal will be completed and the strategies that can be adopted to reach the specific goal.

A business plan is a necessary document for every new firm to have in place before it can begin operations. Writing a credible business plan is typically a requirement for banks and venture capital companies before contemplating granting funding to new enterprises.

It is not a smart idea to operate without a business strategy. In fact, very few businesses can survive for long without one. There are many more advantages to developing and keeping to a strong business plan, such as the ability to think through ideas without investing too much money and, eventually, losing money. Business plans are used by start-ups to get off the ground and attract outside investors.

A feasibility study is used to assess if a business or a concept is viable. After the business opportunity has been identified, the business strategy is produced. “A feasibility study is carried out with the goal of determining the workability and profitability of a company venture. A feasibility study is conducted before any money is committed in a new business endeavour to see whether it is worth the time, effort, and resources.

Similarities between a Feasibility study and a business plan

It's essential to analyse the similarities between a feasibility study and a business plan because they're both implemented altogether in same ways to help you build a lucrative company. The following are some of the similarities between the two documents:

Time: Both the reports are completed before the business begins and can be repeated afterwards to decide the next stages for new concepts.

Input: Both Feasibility report and the Business plan include input from a variety of people or departments with a variety of talents.

Format: Both report formats incorporate other documents that are gathered in order to create the report.

Components: Examining the target market, market circumstances, and financial expenses are some of the topics examined.

Use: Both may be displayed to potential investors and can assist the organization's management in making choices.

Organizations uses a business plan and a feasibility study as analytical and decision-making tools.

Although the three tools can be used in conjunction with one another in decision-making processes, they each have their own strengths and weaknesses, and they appear to target and address separate processes.

You might also like to read How to write a feasibility study report?

Now let us evaluate the difference between feasibility report and a business report-

• A feasibility study is conducted to determine the viability and profitability of a business endeavour. A feasibility study is conducted before any money is committed in a new business endeavour to see whether it is worth the time, effort, and resources.

A business plan, on the other hand, is created only when it has been determined that a business opportunity exists and that the endeavour is about to begin.

• 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. A business plan, on the other hand, is mostly comprised of tactics and strategies to be applied to establish and expand the company.
• A feasibility study is concerned with the viability of a business concept, but a business plan is concerned with the development and sustainability of a company.
• A feasibility report informs the entrepreneur about the profit potential of a company concept or opportunity, whereas a business plan assists the entrepreneur in raising the necessary start-up cash from investors.
• Key components of a feasibility study and a business plan
• A business plan does not include the description of the sales methods used, such as distribution agreements, strategic alliances, and the amount of involvement with partners, as well as the payment terms, warranties, and other customer support.

But a feasibility report includes all the sales methods, strategies, alliances to payment and customer support.

•  Feasibility report contains:
• Assists in cost estimation, describe the production site, required inputs, and sourcing region.
• Physical description of the factory, including machine, capacity, warehouse, and supply chain, is necessary.
• Indicate if the area used for production is rented or owned. This will have an impact on the financial forecast.
• Information regarding the manufacturer's capacity, order details, price, and so on, if manufacturing is outsourced. To aid in cost estimation, describe the production site, needed inputs, and sourcing location.
• A physical description of the factory, including machine, capacity, warehouse, and supply chain, is necessary.

But a business plan does not contain anything related to production and operations, but a business plan contains all the information related to management.

• A poorly written business plan – poor projections, strategies, analysis, business model, and environmental factors, among other things – can be easily adjusted during business operations, but this cannot be said of a feasibility study because an incorrect conclusion in a feasibility study can be costly — it could mean launching a venture with little chance of survival or approving a proposal that wastes the company's human and financial resources.
•  A business plan presume that a company will prosper and lays out the procedures needed to get there. Those in charge of conducting a feasibility study should not have any predetermined notions regarding the likelihood of success. They must maintain as much objectivity as possible. They do research and allow the facts to lead to the study's conclusion. If the study concludes that the idea is viable, some of the findings, such as market size predictions, may be incorporated in the company's business plan.

You should also read What is land development feasibility study?

These 10 differences will help you to evaluate and differentiate between a feasibility study and a business plan.

Feasibility study may appear to be like the business plan in many respects. "A feasibility study may easily be transformed to a business plan” but it is crucial to remember that the feasibility study is completed prior to the endeavor. The business plan should be thought of in terms of growth and sustainability, whereas the feasibility study should be thought of in terms of concept viability.

This is all you need to know and understand about feasibility study and business plan.

Get ready to apply your knowledge in the real words with lots of success.

You might also like to explore below external contents on  feasibility study :

• What Is a Feasibility Study? – Types & Benefits
• Best 8 Property Management Software
• FEASIBILITY STUDIES & BUSINESS PLANS

Hope you enjoyed this post on  feasibility study , let me know what you think in the comment section below.

Are you someone involved with real estate feasibility?

We are excited to launch the next generation of real estate feasibility software to help you manage your development projects with ease.

Register now for a free trail license!

This is a very good piece of writing. When you have a concept for a company but want to be sure it’s a good idea, you do a feasibility study.

It was very helpful. Thank you so much!

Appropriately timed! A company’s future operations are laid out in great detail in the company’s business plan. Once you’ve done your feasibility study, you’ll know whether or not the proposal has merit. The next step is to lay out your goals, whether financial and otherwise, as well as the strategies you want to use to attain them and the organisational structure you envision.

Prior to the company opening, both are undertaken, and may be repeated again in the future to identify the next steps on new ideas that may arise.

Great Content.

Submit a Comment Cancel reply

Your email address will not be published. Required fields are marked *

Save my name, email, and website in this browser for the next time I comment.

This site uses Akismet to reduce spam. Learn how your comment data is processed .

Follow Us On

Latest Posts

Get your ultimate guide to feasibility study for FREE!

• [email protected]
• +234(0) 8105636015
• Business Plan

The Difference Between a Business Plan and a Feasibility Study

• October 24, 2023
• No Comments

Successful businesses don’t happen by chance; they are the result of careful planning and assessment. Whether you’re launching a startup or considering a new project, you need a roadmap that outlines your goals, strategies, and financial projections. This is where a business plan and a feasibility study come into play.

In this article, we will delve deep into the realms of business planning and feasibility analysis, exploring the crucial distinctions between these two fundamental tools.

Understanding Business Plans

Definition and Purpose

A business plan is a comprehensive document that outlines the objectives, strategies, and financial projections for your business. Its primary purpose is to provide a detailed roadmap for your company’s future. It acts as a strategic guide for entrepreneurs, investors, and stakeholders.

Components and Elements

Business plans typically consist of several key components, including:

• Executive Summary : A concise overview of the entire plan.
• Market Analysis : Research on the industry, competition, and target audience.
• Marketing Strategies : Detailed plans for branding, promotion, and sales.
• Financial Projections : Forecasts for income, expenses, and profitability.
• Operational Plan : Information on day-to-day operations and management structure.
• Risk Assessment : Identification and mitigation of potential risks.
• Exit Strategy : Plans for future expansion, sale, or closure.

Role in Business Operations

A business plan serves as a strategic document that guides your business operations. It provides clarity on your business model, goals, and how you intend to achieve them. Moreover, it is often a critical tool for attracting investors and securing financing.

Exploring Feasibility Studies

A feasibility study is a systematic analysis of the practicality and viability of a business idea. Its primary purpose is to determine whether a concept is achievable and sustainable. Feasibility studies are often conducted in the early stages of business development to assess the potential success of a project.

Key Components and Areas of Focus

Feasibility studies typically encompass the following key components:

• Market Research : Detailed analysis of the market, including target demographics, competition, and demand.
• Technical Feasibility : Evaluation of the project’s technical requirements and capabilities.
• Financial Feasibility : Assessment of the project’s financial viability, including cost estimates and revenue projections.
• Operational Feasibility : Examination of the logistical and operational aspects of the project.
• Legal and Regulatory Feasibility : Review of legal and regulatory requirements that may impact the project’s execution.
• Sensitivity Analysis : Testing various scenarios to assess the project’s adaptability to changing circumstances.

Determining Viability

A feasibility study is primarily concerned with determining the viability of a business idea. It helps answer critical questions, such as whether the project is financially feasible, whether the market will support it, and whether potential risks can be mitigated effectively.

Timing and Sequence

Chronological Order

One key difference between a business plan and a feasibility study is the chronological order in which they are typically created. Feasibility studies often precede the development of a business plan.

Why Feasibility Studies Come First

Feasibility studies are conducted early in the business development process to assess the viability of a concept before investing significant time and resources in a comprehensive business plan. If a feasibility study reveals that a project is not feasible, it can save a business from pursuing an unviable idea.

Data Collection and Analysis

Research and Data Collection

Both business plans and feasibility studies involve extensive research and data collection. However, the focus and purpose of this research differ.

Data Analysis in Business Plans

In business plans, data analysis is geared toward understanding the market, competition, and financial projections. It aims to provide a strategic direction for the business.

Data Analysis in Feasibility Studies

Feasibility studies conduct in-depth analysis, focusing on market research, technical feasibility, financial feasibility, and other areas to determine the practicality of a project. The goal is to evaluate whether the project is worth pursuing based on collected data and analysis.

Risk Assessment

Identifying and Mitigating Risks

Both business plans and feasibility studies address the critical aspect of risk assessment, but their approaches differ.

Risk Assessment in Business Plans

Business plans identify and outline potential risks but often focus on strategic plans to minimize and manage these risks.

Risk Assessment in Feasibility Studies

Feasibility studies dig deeper into the assessment of potential risks, challenges, and market uncertainties. They are essential for determining whether the project is too risky or whether risks can be effectively mitigated.

Financial Projections

Detailed Financial Forecasts

Both business plans and feasibility studies involve financial projections, but the depth of these projections varies.

Financial Projections in Business Plans

Business plans include detailed financial forecasts, such as income statements, balance sheets, and cash flow projections. These projections are integral for attracting investors and securing financing.

Financial Analysis in Feasibility Studies

Feasibility studies provide financial analysis that focuses on determining the project’s financial viability. They assess whether the project can be completed within budget and whether it has the potential to generate sufficient revenue to cover costs.

Market Analysis

In-Depth Market Assessment

Market analysis is an important aspect of both business plans and feasibility studies.

Market Analysis in Business Plans

Business plans provide an overview of the market, including target demographics, competition, and market size. Market analysis in business plans is often geared toward supporting sales and marketing strategies.

Market Analysis in Feasibility Studies

Feasibility studies conduct in-depth market research, delving into the specific needs of the target audience, competition, and market demand. The goal is to assess whether the market can support the project and whether it presents a viable opportunity.

Resource Allocation and Budgeting

Allocating Resources

Resource allocation and budgeting are considerations in both business plans and feasibility studies, but the focus varies.

Rea also: The difference between a traditional business plan and a lean startup plan

Resource Allocation in Business Plans

Business plans often include plans for allocating resources, such as staff, equipment, and capital. They outline budgetary requirements for various aspects of the business.

Resource Allocation in Feasibility Studies

Feasibility studies assess the resource requirements of the project and provide an estimate of the budget needed for project development. This information is essential for evaluating whether the project can be executed within the available resources.

Decision-Making Impact

Influencing Decisions

The outcomes of both business plans and feasibility studies have a significant impact on decision-making.

Impact of Feasibility Studies

Feasibility studies influence the decision to proceed with a business idea. If a feasibility study reveals insurmountable challenges, it may deter entrepreneurs from pursuing the project.

Role of Business Plans

Once a project is deemed feasible through the feasibility study, a business plan becomes the tool for executing the strategies and operations outlined in the feasibility study. It guides the day-to-day activities of the business.

Scalability and Adaptability

Adapting to Change

Scalability and adaptability are crucial aspects of both business plans and feasibility studies, but they approach change differently.

Scalability in Business Plans

Business plans may be less adaptable in the face of changing market conditions. They often represent a set path that the business intends to follow.

Adaptability in Feasibility Studies

Feasibility studies emphasize adaptability and flexibility. They recognize that market conditions can change rapidly, and the project may need to adapt to these changes to remain viable.

Integration for Success

The Synergy of Both Tools

While business plans and feasibility studies serve distinct purposes, they can complement each other effectively in the business development process.

How They Work Together

Business plans and feasibility studies work together to create a robust business strategy. The insights gained from the feasibility study can inform the development of a comprehensive business plan. The feasibility study’s findings on market viability, resource requirements, and potential risks can be integrated into the business plan’s strategies and financial projections.

Real-Life Examples

Learning from Successful Businesses

To illustrate the practical application of business plans and feasibility studies, let’s explore a few real-world case studies:

• Case Study 1: Tech Startup : A technology startup conducts a feasibility study to assess the demand for its innovative product. The study reveals strong market interest, leading the startup to create a business plan focused on market expansion and revenue growth.
• Case Study 2: Restaurant Chain : A restaurant chain plans to expand into a new region. A feasibility study helps determine the viability of the expansion, considering factors like competition and consumer preferences. Subsequently, the business plan outlines the specifics of the expansion, including location, marketing strategies, and financial projections.
• Case Study 3: Manufacturing Company : A manufacturing company conducts a feasibility study to explore the possibility of adopting new technology to improve efficiency. The study reveals that the technology is feasible and financially viable. A business plan is then developed to guide the implementation of the new technology, detailing the required resources and the expected impact on production.

“The Difference Between a Business Plan and a Feasibility Study” is not just a matter of paperwork; it’s a fundamental decision that can shape the future of your business. While both tools are critical, it’s essential to recognize their distinct purposes and when to employ them. The key is to leverage the insights from a feasibility study to inform the development of a robust business plan.

In your entrepreneurial journey, you may find that a hybrid approach that combines elements of both business plans and feasibility studies works best for your business. The critical factor is to maintain flexibility and be open to adjusting your planning strategy as your business evolves.

In summary, a feasibility study is the compass that guides you toward viable business concepts, while a business plan is the roadmap that leads you to your destination. Together, they form a powerful combination that can set your business on the path to success.

If you’re unsure about how to approach a feasibility study or develop a business plan for your specific business idea, seek professional guidance. Contact us at Dayo Adetiloye Business Hub via [email protected] or [email protected]. or give us a call at 08105636015, 08076359735 and 08113205312 to access expert assistance and take your business idea to the next level. Making the right decisions today can have a profound impact on the success of your business tomorrow.

Like this article?

Leave a comment

Leave a reply cancel reply.

Your email address will not be published. Required fields are marked *

DayoHub is an Human Capacity Development firm and a social enterprise that started in 2012 with focus on Vocational Training Services, broad consulting, implementation and design of customized/outreach training courses to governments, small businesses, civil society organizations, aid agencies, and individuals around the world seeking to improve their effectiveness and productivity.

Quick Links

Copyright 2024 dayo adetiloye business hub. all rights reserved.

Terms   |  Privacy

Difference Between Feasibility Study and Business Plan

Many people don’t know that there is a difference between a business plan and a feasibility study.

Frequently, clients reach out seeking a feasibility study, but after an in-depth conversation, it becomes evident that what they truly require is a comprehensive business plan. In this article, I’ll clarify this common misconception and provide a clearer understanding of the distinction.

So let us start with the first one, which will give us a brief overview of what a business plan and a feasibility study is all about

Table of Contents

What is the Difference Between Feasibility Study and Business Plan

Business plans and feasibility studies are vital business tools for analysis and for making business decisions. However, a feasibility study is not the same thing as a business plan because a feasibility study gives a conclusion or recommendation that would be completed prior to developing the business plan.

Feasibility Study

A feasibility study is done to determine whether a proposed business has a high enough probability of success that it should be undertaken. A feasibility study is carried out first in order to know if the business will be viable before venturing into it. Before a company can invest in a business or launch a new product, a feasibility study is done to determine if there will be a return on investment.

According to Rochester.edu, a feasibility study can be defined as “a controlled process for identifying problems and opportunities, determining objectives, describing situations, defining successful outcomes, and assessing the range of costs and benefits associated with several alternatives for solving a problem.”

It can also be used to make decisions about whether to launch a new product for an existing company or enter a new market. Feasibility studies are sometimes termed cost-benefit analyses because the projected costs of the project are compared to the expected benefits to yield a conclusion.

For instance, imagine that you have been an instructor in a company that provides IT training and certifications in the USA and you want to come to Africa to impact the knowledge by starting a new business and even adding training like IT Certification Practice Test Dumps , but you are faced with the big question, “Would my business fly?”. Is there a market for my services?

In this situation, the best decision is to conduct a feasibility study to determine if those IT programmes have an established market. If they are a company that needs interns trained by your company.

Business plans are guidelines for carrying out actions that the company’s management has already determined to be feasible. So a business plan is like a roadmap for your business that outlines goals and details how you plan to achieve those goals.

Business plans map out the direction a company intends to take to reach its revenue and profit objectives in the future. They are a compilation of numerous decisions made by the management team about how the company should be run. A business plan is done after a feasibility study has been carried out. If the recommendation of the feasibility study is negative, then there will be no need to venture into the business. Then, if the feasibility study says the business will be feasible, a business plan is developed, which will then map out plans and strategies to adopt in order to achieve business goals, including revenue generation, market penetration, customer acquisition, marketing, and sales strategies, among others.

A business plan can be done for internal or external use. The internal use of a business plan is for the management and staff of the company, while the external use is for shareholders, investors, bank loans, and customers.

Main Purpose of a Business Plan and a Feasibility Study

In short, a feasibility study gives a conclusion or recommendations, while a business plan gives a roadmap.

The feasibility study helps determine whether an idea or business is a viable option.  Therefore, a feasibility study is done first before investing a dime in the business. Before considering approaching investors, you must have done your research to know that the business is feasible before taking any decision. That is why a feasibility study gives a conclusion or recommendations.

A business plan will map out the roadmap and strategies to achieve your business goal because a business plan assumes a business is viable and presents the steps necessary to achieve success. If you are looking forward to approaching an investor or trying to get a bank loan, what you need is a business plan. Some investors might request for a feasibility study before the business plan

Outline of a Business Plan and a Feasibility Study

Below is the outline of a business plan:

• Executive Summary
• Business/Company Overview
• Products/Services
• Market/Industry Analysis
• Operation Plan
• Management/Personal plan
• Sales Forcast
• Financial Plan
• Appendices and Exhibits

A good outline for a feasibility study includes:

• Introduction
• Product or Service
• Market Environment
• Competition
• Business Model
• Market and Sales Strategy
• Production Operations Requirements
• Management and Personnel Requirements
• Regulations and Environmental Issues
• Critical Risk Factors
• Financial Predictions Including:  Balance Sheet, Income Statement, Cash Flow Statement, Break Even Analysis, and Capital Requirements

Challenges of a Business Plan and a Feasibility Study

Looking at both the business plan and feasibility study, you will discover that both attempt to predict future outcomes using assumptions about what is likely to happen in the business and the business environment, which include government policies, the market, competition, and risk, among others. Any poorly done feasibility study can lead to a costly mistake. If a business is not viable and the recommendation says it will be viable, the end result will not be palatable. This will affect the business plan and the operation of the business adversely.

A poorly done business plan—poor projections, strategies, analysis, business model, and environmental factors, among others—can easily be adjusted in the course of running the business, but the same cannot be said of a feasibility study because, in a feasibility study, an incorrect conclusion can be costly—it could mean launching a venture that has very little chance of surviving or approving a project that wastes the company’s human and financial resources.

If you need a standard business plan,  check out the list of Business Plan we have

Do you want us to develop a unique business plan for you, Check out our  business plan service page

I would love to hear your thoughts. Kindly use the comment box below to leave your comment.

Thank you for reading this post, don't forget to subscribe!

Share this:

Are you interested in receiving the latest grant, funding, and business opportunities? Join our newsletter for free and stay updated! Click here to join our newsletter Join our community: Join our WhatsApp group Join our Telegram group Join our Facebook group

5 thoughts on “Difference Between Feasibility Study and Business Plan”

This is beautiful. Thank you for sharing this informative article by shading more light on the two.

I’ve been planning to hire a feasibility analysis service, so I’ll have an idea, whether my candle business is feasible. I agree with you that this must be done first before approaching the investors. It is also true that an incorrect conclusion in the feasibility study could be costly.

It’s inevitable! It helps you to make the right decision.

My business plan is ready but I will like you to review it

Alright, You can reach out to me on 07031542324 or email me at [email protected]

Leave a Reply Cancel reply

This site uses Akismet to reduce spam. Learn how your comment data is processed .

Difference Between a Feasibility Study and a Business Plan

The main difference between a feasibility study and a business plan is that a feasibility study is conducted to assess the viability of a proposed project or venture before significant resources are invested, focusing on analyzing various aspects such as economic, legal, technical, and scheduling considerations. In contrast, a business plan is a comprehensive document that outlines a company’s strategy, goals, market analysis, financial projections, and operational plans, used primarily for executing and managing the business, as well as for attracting investors and lenders.

Table of Contents

What is a Feasibility Study and What is a Business Plan

Feasibility Study refers to an analysis and evaluation of a proposed project to determine if it is technically feasible, economically viable, and legally permissible. It is usually conducted before significant investments are made to understand the likelihood of the project’s success. The feasibility study considers various factors, including market research, technical requirements, legal constraints, financial modeling, and risk assessment. The purpose of this study is to ascertain the strengths and weaknesses of a proposed venture, opportunities and threats present in the environment, the resources required, and ultimately the prospects for success.

Business Pl a n, on the other hand, is a detailed plan of how a business will operate and achieve its goals. It serves as a roadmap for the business, detailing the strategy, target market, competition, marketing and sales strategies, organizational structure, and financial projections. A business plan is essential for both new and established businesses. It helps in securing funding from investors or banks, guiding the management team in making strategic decisions, and monitoring the progress of the business. Business plans are dynamic documents that should be updated regularly as the business grows and market conditions change.

Key Differences Between a Feasibility Study and a Business Plan

• Purpose and Focus : A feasibility study is conducted to evaluate the viability of a project before significant resources are committed, whereas a business plan is used for the execution and ongoing management of a business.
• Scope of Analysis : Feasibility studies typically have a narrower focus, examining specific aspects like economic viability and technical requirements, while business plans provide a comprehensive overview of the entire business operation.
• Timing : A feasibility study is often conducted before a business plan, helping to decide whether or not to proceed with the business idea.
• Audience : Feasibility studies are usually intended for internal decision-making, while business plans are often created with external stakeholders, such as investors and lenders, in mind.
• Content : A feasibility study includes detailed analysis on viability aspects, whereas a business plan includes broader information like marketing strategies, organizational structure, and financial forecasts.
• Use in Decision Making : Feasibility studies are used to make go/no-go decisions on a project, while business plans are used to guide the operational, financial, and marketing decisions of a business.

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.
• Risk Assessment : Both involve assessing risks and identifying potential challenges and opportunities.
• Financial Considerations : Both include financial analysis, although the focus and depth may vary.
• Goal Orientation : Both are oriented towards achieving specific goals – whether it’s determining the viability of a project or outlining the strategy for a business.
• Dynamic Documents : Both should be considered dynamic documents that can be revised and updated as new information becomes available or circumstances change.

About The Author

Hidayat Rizvi

Related posts.

Difference Between a Business Idea and a Business Opportunity

Difference Between Business Plan and Business Model Canvas

Business vs Marketing Objectives: Essential Insights for Effective Planning

Business Plan vs Proposal: An In-Depth Comparison

Leave a comment cancel reply.

Your email address will not be published. Required fields are marked *

Important Links

• Privacy Policy
• Terms and Conditions

Social Networks

• hidayat.rizvi.1
• @HidayatRizvi
• hidayat_rizvi_2000
• hidayat-rizvi-b0788b10

HidayatRizvi.com © 2024. All Rights Reserved

Get a free consultation, enter your contact details and i will get in touch, send a message. i will respond quickly.

Difference between Feasibility Study and Business Plan

Entrepreneurs face many challenges when creating a new venture.  Although the business plan is one of the most well-known documents, the feasibility study may be just as important.  Before the entrepreneur can seek funding, he or she must demonstrate that the idea is truly a good one.

Rochester.edu explained that a feasibility study, “can be defined as a controlled process for identifying problems and opportunities, determining objectives, describing situations, defining successful outcomes, and assessing the range of costs and benefits associated with several alternatives for solving a problem.”

In order to create a feasibility study, entrepreneurs need to define dimensions of business viability including:  market viability, technical viability, business model viability, management model viability, economic and financial model viability, and exit strategy viability.

A good outline for a feasibility study includes:

• Introduction
• Product or Service
• Market Environment
• Competition
• Business Model
• Market and Sales Strategy
• Production Operations Requirements
• Management and Personnel Requirements
• Regulations and Environmental Issues
• Critical Risk Factors
• Financial Predictions Including:  Balance Sheet, Income Statement, Cash Flow Statement, Break Even Analysis, and Capital Requirements

A feasibility study is not the same thing as a business plan.  The feasibility study would be completed prior to the business plan.  The feasibility study helps determine whether an idea or business is a viable option.  The business plan is developed after the business opportunity is created.  StrategicBusinessTeam.com explained, “A feasibility study is carried out with the aim of finding out the workability and profitability of a business venture. Before anything is invested in a new business venture, a feasibility study is carried out to know if the business venture is worth the time, effort and resources. A feasibility study is filled with calculations, analysis and estimated projections while a business plan is made up of mostly tactics and strategies to be implemented in other to grow the business.”

While it may seem the feasibility study is similar in many ways to the business plan, it is important to keep in mind that the feasibility study is developed prior to the venture.  StrategicBusinessStream pointed out that “a feasibility study can readily be converted to a business plan.”  It’s important to think of the business plan in terms of growth and sustainability and the feasibility study in terms of idea viability.

Related Articles:

• Top 30 Links for the Successful Entrepreneur
• Top 10 Companies Code of Ethics and Conduct
• Top 10 Company Mission Statements
• How to Conduct a Feasibility Study
• How to Create a Business Plan
• Business Plan Outline
• Feasibility Plan Outline
• Writing a Winning Business Plan

Submit a Comment Cancel reply

Your email address will not be published. Required fields are marked *

Submit Comment

Recent Posts

Top 20 must-read forbes articles on curiosity and corporate culture.

  How to Ensure You’re Not Just another Resume In The Pile: Leverage curiosity in job searches: Learn how to ask smart questions, show genuine interest, and offer fresh ideas to demonstrate your unique value to employers. How Organizations Can Promote Tech...

5 Proven Ways To Leverage AI And Curiosity For Continuous Learning

Check out my latest article on Forbes, 5 Proven Ways To Leverage AI And Curiosity For Continuous Learning: Click here

Nurturing Emotional Intelligence And Curiosity In Your Team

Check out my latest article on Forbes, Nurturing Emotional Intelligence And Curiosity In Your Team: Click here

How Curiosity Shapes Your Personal Brand And Makes You Indispensable

Check out my latest article on Forbes, How Curiosity Shapes Your Personal Brand And Makes You Indispensable: Click here

Applied Creativity: How To Infuse Innovation Into Your Work With Natalie Nixon

Discover the power of applied creativity, where intentional curiosity sparks innovation and propels leadership. In this episode, our guest is the one and only creativity strategist Natalie Nixon, the founder of Figure 8 Thinking, and "the creativity whisperer to the...

• advertising
• Ask Dr. Diane
• Audio Posts
• Celebrities
• Communication
• Diet and Exercise
• Dr. Diane hamilton
• Dr. Diane's Favorites
• Emotional Intelligence
• Featured Podcast
• Global Mentor Network
• Intelligence
• Leaders Playbook
• Millennials
• Miscellaneous
• Motivational
• Online education
• Online Students
• Personal Finance
• Personality
• Personality Test
• Plastic Surgery
• Real Estate
• Reinventing Yourself
• Social media
• Social Networking
• Soft Skills
• Take the Lead Radio
• Time Management
• Uncategorized
• Understanding Personalities
• young adult