He checks whether the enterprise has the required tools, technology, efficient workforce and necessary resources or not. The feasibility study also aware of the inherited risks in the project and determines whether the project is able to generate sufficient returns ROI as expected i.
In the below example, we are going to create a simple economic feasibility study or business plan. It refers to the analysis of the cost-effectiveness of a project in order to determine whether the company should undertake the project on the basis of profitability or not. Will Smith, the project manager is tasked to perform an economic feasibility study about the project and submit a report. Smith collected the following data about the project to conduct the feasibility analysis If NPV is positive then the project is feasible and the company can consider the project to be taken.
The company incurs losses in its first year; therefore it is liable to pay zero taxes. Also, the company is allowed to adjust its losses for two subsequent years for tax purposes. Hence profit before taxes PBT for second year will be reduced by losses of first year to i.
Project Manager Will Smith after studying the costs and benefits associated with the project concluded that since NPV Net Present Value is positive and high, Tesla should accept the project on the basis of Economic Feasibility Analysis. It tells us whether a project is worth the investment—in some cases, a project may not be doable. A well-designed study should offer a historical background of the business or project, such as a description of the product or service, accounting statements, details of operations and management, marketing research and policies, financial data, legal requirements, and tax obligations.
Generally, such studies precede technical development and project implementation. There are five types of feasibility study—separate areas that a feasibility study examines, described below.
This assessment focuses on the technical resources available to the organization. It helps organizations determine whether the technical resources meet capacity and whether the technical team is capable of converting the ideas into working systems.
Technical feasibility also involves the evaluation of the hardware, software, and other technical requirements of the proposed system. It also serves as an independent project assessment and enhances project credibility—helping decision-makers determine the positive economic benefits to the organization that the proposed project will provide. Philanthropists and other NonProfits.
City Council offices and program recipients. United Way. Ask the CEO, but also ask the janitor. Imagine how strong your program will be when its genesis is the input of all these knowledgeable and involved souls!
You will find that most people are anxious to help you. People like to be thought of as experts, and they like to share their opinions and thoughts. You will be asking folks to do what they enjoy doing. Treat them to breakfast, and ask away! Demand and Competition: Is there unmet demand for this program?
Or is there already something like this around your community? To learn what's going on in your community, talk to folks from as many walks of life as possible.
Survey potential recipients of the service. Talk with local government officials, with Information and Referral services, or other organizations that are often the first stop in a person's search for help. Talk with funders - foundations, individual philanthropists, United Way representatives, etc.
What are their biggest gripes about existing programs? What do they think of your idea? What are their suggestions? What approaches are they thinking of that you haven't considered? Obstacles Obstacles are those things that could stand in the way of a successful program, and that MUST be overcome for the program to accomplish its goals. What may stand in your way? And how can you overcome those obstacles? Money and staff are always the first items on the obstacles hit-parade, so you might as well put them on there right now.
Limited past board support for this type of effort? Does your community have a disdain for public art? What external obstacles will threaten your program? Ask your contacts about these potential obstacles.
Have them add others to the list. And then, item by item, with the help of the folks you are interviewing, determine if and how those obstacles can be overcome. Synergy Synergy can be internally or externally focused as well. The new program may be a catalyst for other changes within your organization, or it could be a catalyst for changes in the community, bringing a number of agencies together to do something that hasn't been done before.
Again, talking to lots of different folks is the key. If the creation of this program will make the whole bigger than the current sum of parts, then that will be a big plus in determining its feasibility. Wrapping It All Up The benefits from this questioning come from the actual answers you receive, as well as the simple process of asking and talking to people.
First, you will gain invaluable information, from perspectives that might never have occurred to you. It is exhilarating to have all this advice, from experts in so many fields, free for the asking. Equally as important, though, is that you will be out in the community, making the project known, gaining support.
Follow up these visits with a personal note of thanks for their time, and promise to keep them posted on your progress.
Then keep your word and do keep them informed. Just because a project is needed doesn't make it practical. They describe the practical side of your plan. Chances are you know many of the answers to these questions and won't need a great deal of outside input.
However, if you are in doubt, don't guess - ask. The more accurate your information, the more accurate your eventual cost projections will be. The following seven functions are the basis of any NonProfit program, regardless of the type of program. The first 2 items, Product and Operations, will define the program and lay the groundwork for all the other functions. For the purpose of this example, lets use the following program:. The Creation of a Counseling Program.
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