How can a feasibility study help an entrepreneur assess the viability of a business or venture opportunity?
The power and leverage of feasibility studies lie on their capacity to objectively assess the potential success of a business venture. This is an imperative study to conduct prior to venturing out and investing large amounts of money, because a feasibility study will clearly determine whether the investment is worthy or not.
Feasibility studies are used in any field of study. Some examples of this type of study include:
- market research- to determine the demographics within an area and how it may react to a new product or service
- customer inventories- these survey a current market to determine how a new product or service may affect their current purchase practices
- product consensus- testing or surveying to sense the acceptance of a product within a specific market.
It is safe to argue that the biggest benefit that can be obtained from feasibility studies is that it gives the potential investor the clarity of mind of whether the money to be put into the market will be worth the investment, or a mere waste. It also provides a clear understanding of who is the customer, of what are the purchasing trends of the customer, and of what are the actual needs of the customer within a specific demographic group.
This entails that it is imperative to conduct this type of research with a well-prepared set of questions, and with the best possible analytical team that can extrapolate the raw data as it is and properly correlate it to actual results.