A feasibility report is basically an analysis of a specific idea, and it is used to make informed decisions instead of just jumping in. It examines how effective a specific plan or project will be, but its main characteristic is in its ability to analyze how efficient the idea will be as well. It does this by taking a close look into a number of different aspects needed for a successful execution of the idea. Some of the most common factors include things like: capital, resources, time, legalities, technology and economics.
When an entrepreneur has a general business idea, he/she may have a number of different plans in mind to go forward with it. Also, when a company is faced with a specific dilemma, a brainstorming session may generate a variety of proposed solutions to the problem. It is always good to have a number of options, however, it may be hard to come to a conclusion for which idea or plan is the best? Well, that’s when a feasibility report comes in.
A feasibility report will allow you or your company leaders to understand a specific idea’s viability. Feasibility reports help you make informed decisions on choosing which specific plans to go forward with. It will also give you an idea of how the idea or project will play out before ever taking the first steps.
Sometimes, a business plan and a feasibility report can sound like the same thing. Both are examinations of a specific idea that not only properly lay out a plan so that the idea has a good chance of success, but both also look at the obstacles that will probably lie ahead of the plan’s execution. In fact, government or financial institutions might even require you to include a feasibility report in your business plan.
A bank or investment firm may require entrepreneurs to include a feasibility report in your business plan for a number of reasons. Not only will it provide those who may be considering giving start-up loans to the entrepreneur’s proposed business plan investment but, it also gives financial institutions more confidence when they see the inspiring entrepreneur has carefully considered the possible obstacles of a business idea. They want you to not only look into market potentialities, but the technical and financial implications of the opportunity as well.