FEASIBILITY STUDY

Fea.si.ble
: capable of being used or dealt with
successfully.
: possible to do

Synonyms: Achievable, possible, viable, workable

 A feasibility study is made to determine whether or not a project is
likely to succeed, or will be economically viable.
No one constructs a house without making a plan or design and
an estimate of the cost of materials and labor. Most companies hire
experts to conduct a feasibility study before launching big-scale
projects.
Several components comprise a feasibility study:
1. The plan
2. The cost
3. Source of funding
4. The manpower/personnel requirements
5. The market
6. Profitability
The plan
The project, including the rationale, has to be described in detail. A
sketch should accompany the description if necessary. This section should
answer the question: 1) What? 2) Why? 3) How? It should also include a time
frame – the approximate time needed to complete the project.
The plan could be putting up a printing press. What equipment/facilities
are needed? An offset machine, a letter press, a camera, a computer, a
dark room, a stripping room, etc. Why is there a need for a printing press?
This is justification of the project. If the proponent is a school official, he can
cite the need for a school press to take care of the printing of books the
school organ, the yearbook, receipts, enrollment forms, etc. How is the
printing press to be set up. The proponent can submit preliminary inquiries
needed as well as the space for the printing press.
The cost
The estimated cost of the equipment and facilities entails a
canvassing of the market. What models are available and where? Are
they second hand or brand new?

Source of funding
If there is provision in the school or company budget, the approval
of project is 50 per cent sure.
If there is no allocation for the project, or if the allocation is not
sufficient, is there a possibility of getting loans from banks? How mush is
the interest? Would the income from the project be able to pay
amortization on the loans when they are due?
Still another source is fund drives, usually resorted to by church and
charitable organizations.
Manpower or personnel
• How many persons are needed for the project?
• What are their job titles and job description?
• What salary is recommended for each?
• If the job is highly technical, has the proponent scouted around fro
such technical people?
• If no technical people are available, is there a possibility of training
them here or abroad?
• A time table for the recruitment of personnel is advisable and
helpful.
The market
To whom will the commercial venture cater? Will there be enough
clients or customers? This component of the feasibility study should be
supported by a survey. The viability of the project rests primarily on the
stability of the market.

Profitability
The acceptability of the project will depend whether or not it is
profitable to be undertaken. Economic profitability will call for a certain
amount of return (10 to 20%) on investment.
If the project is not a commercial venture, there is a need to discuss
how the project will benefit a community or a specific group of
people.
 Example of a Feasibility Study
A detailed feasibility study of a group of UST Engineering students is reproduce in
outline form below.

A FEASIBILITY STUDY ON THE COMMERCIAL OPERTION OF GUARDIAN

ANGEL CHILD CARE AND DEVELOPMENT CENTER
I. INTRODUCTION
II. MARKETING STUDY
A. The service
1. Service description
2. Uses of the service
B. The market
1. Market description
2.Competition and status of
competition.
3.Possible market
4.Market demand
C. Demand analysis
D. Supply analysis
E. Market projection
F. Target market
G. Marketing strategies
III. TECHNICAL STUDY
A. Technical description of the
project
B. Process description
C. Business size
D. Business location
E. Business size
F. Logistics requirements
G. Provisions for expansion
IV. FINANCIAL STUDY
A. Total project cost
1. Fixed capital investment
2. Pre-operating expenses
3.Working capital
B. Financing scheme
C. Financial analysis
D. Financial analysis
1. Viability analysis
2. Ratio analysis
3. Break-even analysis
E. Management study
1.Organixational Chart
2. Personnel requirements
3. Employment benefits
4. Recruitment policies
5. Manpower development
program
V. SOCIO-ECONOMIC STUDY
A. Project vis-à-vis state of the
economy
B. Social benefits
C. Economic benefits
VI. CONCLUSION