Rica E.

Mullet August 15, 2019

BSBA 3A

Feasibility Study vs Business Plan – What’s the Difference

1. 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.

On the other hand, a business plan is developed only after it has been established that a business
opportunity exist and the venture is about to commence. This simply means that a business plan is
prepared after a feasibility study has been conducted.

2. A feasibility report is filled with calculations, analysis and estimated projections of a business
opportunity. While a business plan is made up of mostly tactics and strategies to be implemented in
other to start and grow the business.

3. A feasibility study is all about business idea viability while a business plan deals with business
growth plan and sustainability.

4. A feasibility study report reveals the profit potential of a business idea or opportunity to the
entrepreneur, while a business plan helps the entrepreneur raise the needed startup capital from
investors.

Defining Both Terms

A feasibility study is done before starting a business, when you have the idea for the
business but you want to make sure it's feasible, or advisable. Put another way, is it worth your time,
effort and money to create this business? Several different professionals may contribute to the
study, such as an accountant, entrepreneurs who have opened successful businesses, and Realtors
who advise on the worth of the location and pricing, comparing similar businesses in the area.

A business plan details how the business will operate. It assumes your feasibility study has been
completed and it was determined the idea is viable. Now you're going to spell out your financial and
other objectives, the methods you plan to use to achieve them, and your proposed organizational
structure.

Consider the Similarities

Comparing the similarities between feasibility study and business plan is important because
both are used in different ways to help you create a profitable business. Similarities between the
two documents include:

Timing: Both are initially done before the business opens, and can be conducted again later to
determine the next steps on future ideas.

Input: Both include input from several individuals or departments that have different skills.
Format: Both include other documents that are pulled together in order to compose the report.

Components: Some of the issues analyzed are similar, including examining the target market, market
conditions and financial costs.

Usage: Both help the organization's management make decisions, and can also be shown to
potential investors.

Understand the Differences

It's equally important to understand the difference between feasibility study and business
plan. They are not the same, and one cannot substitute for the other. Differences include:

Purpose: A Feasibility study determines whether to go ahead with the business or with another
idea, whereas business plans are designed after the decision to go ahead has already been made.

Methodology: Essentially, feasibility studies are research projects, whereas business plans are
projections for the future.

Risks: Feasibility studies determine the risks associated with the idea, whereas business plans
explain how management will deal with the risks so that it will make a profit.

Cost: Feasibility studies can require hiring outside professionals with expertise who will conduct
thorough studies, whereas business plans are written by employees of the business, as part of their
jobs.