Michael Philips, US economist |
FeasabilityFeasability is an important step in starting your own business. It simply means taking a little time out from the headlong rush to get started to check whether in fact your business is likely to work. Sure, you can't know for definite until you actually get started but, in starting a business as in many other things in life, it's more important to know where you're heading than to be getting there fast.
You'll often hear of "feasability studies" and may be encouraged (sometimes with grants) by your local enterprise support agency to undertake one .. but what does it mean?
Effectively, it's nothing more than an early reality check on your business plan.
The key questions you need to answer are:
And, in all this, your opinion counts for nothing. You need hard facts and solid evidence to support the answers to each of the three questions above.
At the feasability stage, you are not loooking at detail - that will come when you begin the process of business planning proper - you only need an overview. But that overview must be grounded in reality.
For example, if you propose to rely on new technology (whether your own or bought-in), you must be able to show that it works. Venture capitalists call this stage "proof of concept".
Next, you must find a market for your product/service. You're not marketing, merely market researching - but you must do it.
And last, you must establish that the project is likely (not guaranteed, very little in life is guaranteed, but likely) to be viable. You must show some outline costings, based on reasonable assumptions, that make it worth proceeding further.
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