OFFICIAL PRELIM MODULE

MEDINA FOUNDATION COLLEGE OF SAPANG DALAGA, INC.

Former: Medina Foundation College
Purok Jasmine, Poblacion, 7212 Sapang Dalaga, Misamis Occidental
Tel No.: (065)908-2380 / Email Address: [email protected]

Business Administration Department

COURSE CODE: BUS AD 8 FEASIBILITY STUDY
1ST Semester of A.Y. 2022-2023
Name: _________________________________ Course and Year: ________________________

INTRODUCTION

Business Enterprises are operated for profit. Hence, entrepreneurs should plan out their projects in order to
attain this objective. However, due to failure to observe the basic safeguards, a number of enterprises actually plunge
into difficulties, thus negating the attainment of the profit objective. Business difficulty means the failure of an enterprise
to attain normal and profitable operations within a reasonable period.

What is a Feasibility Study?

A feasibility study, as the name suggests, is designed to reveal whether a project/plan is feasible. It is an
assessment of the practicality of a proposed project/plan.

INTENDED LEARNING OUTCOMES

After reading and studying this module, you will be able to:
 Define Feasibility Study
 Analyze the steps in a feasibility study
 Differentiate the feasibility study to business plan
 Understand the benefits of feasibility study
 Identify the parties requiring project studies
 Appreciate the parts of a feasibility study

DISCUSSION

The Project Feasibility Study is an evaluation method used to evaluate a potential business project with multiple alternatives or
multiple possibilities. The project feasibility study is one of the best instruments to meet the challenges of constant change. Any
Proposed Business will be evaluated from the point of view of its optimality, practicality, potential, and growth from presentation of
data to negotiation with the financing sources, where the project undergoes further evaluation. The project will be evaluated in six
(6) aspects of Marketing, Technical, Financial, Socio-Economic, Management Organization and Sustainability. In the end, it is
possible to recommend any revisions, changes, or come up with non-feasibility. Even it is true that several business-undertakings in
the past have become successful without conducting a feasibility study and there is still failure to some carefully studied business
projects, these cannot be used as basis for generalizing that the project feasibility study is useless. The project feasibility study
does not claim to be an antidote to failure. But its primary purpose is to enhance the probability of success of a specific business-
undertaking. It is a result of the belief that a carefully planned activity has better chances to succeed than any activity without
planning.
All Proposed Business Projects are intended to be screened out for a “Go” or “No-Go” decision. If it is concluded that it is
too risky to be feasible, the proposed business project eventually gains demerit. Revisions and reevaluations will be undergone by
the students’ defense team; however, they can enhance the business feasibility to a more realistic implementation. The Proposed
Business Project will be defended in a Panel Oral Defense; it will be reappraised on its worthiness in terms of the data presented by
the students’ defense team in the actual Feasibility Defense. In this point the proponent/s of the proposed business and the
feasibility project panel evaluators will be checking, verifying, confirming and finding out the reliability of the proposal and so as any
variances between the latest project’s data and the data standards provided by the project feasibility study group.
This Module aims to provide students with a simple guide in conducting a Business Project Feasibility Study.
The Project Feasibility Study is a thorough, in-detailed and systematic analysis of all factors that will affect the possibility
of success for the proposed business venture. The data, facts, and other findings presented in the study will be the basis
for deciding whether the business project is to be pursued, abandoned, or revised. The Project Feasibility Study is a
synthesis of studies in the Aspects of Marketing, Technical, Financial, Socio-Economic, Management Organization and
Sustainability of the proposal.

A feasibility study is part of the initial design stage of any project/plan. It is conducted in order to objectively
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BSBA Instructor
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uncover the strengths and weaknesses of a proposed project or an existing business. It can help to identify and assess
the opportunities and threats present in the natural environment, the resources required for the project, and the
prospects for success. It is conducted in order to find answers to the following questions:
1. Does the company possess the required resources and technology?
2. Will the company receive a sufficiently high return on its investment?

STEPS IN A FEASIBILITY STUDY

CONDUCTING A FEASIBILITY STUDY INVOLVES THE FOLLOWING STEPS:
1. Conduct preliminary analyses.
2. Prepare a projected income statement. What are the possible revenues that the project can generate?
3. Conduct a market survey. Does the project create a good or service that is in demand in the market? What price
are consumers willing to pay for the good or service?
4. Plan the organizational structure of the new project. What are the staffing requirements? How many workers are
needed? What other resources are needed?
5. Prepare an opening day balance of projected expenses and revenue
6. Review and analyze the points of vulnerability that are internal to the project and that can be controlled or
eliminated.
7. Decide whether to go on with the plan/project.

DIFFERENCE BETWEEN FEASIBILITY STUDY AND BUSINESS PLAN

A feasibility study is not the same thing as a business plan. The feasibility study would be completed prior to
the business plan. The feasibility study helps determine whether an idea or business is a viable option. The business
plan is developed after the business opportunity is created. StrategicBusinessTeam.com explained, “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. A feasibility study is filled with calculations, analysis and estimated projections while a business plan is made
up of mostly tactics and strategies to be implemented in other to grow the business.”

IMPORTANCE OF FEASIBILITY STUDY

The importance of a feasibility study is based on organizational desire to “get it right” before committing
resources, time, or budget. A feasibility study might uncover new ideas that could completely change a project’s scope.
It’s best to make these determinations in advance, rather than to jump in and to learn that the project won’t work.
Conducting a feasibility study is always beneficial to the project as it gives you and other stakeholders a clear picture of
the proposed project.

Below are some key benefits of conducting a feasibility study:

1. Improves project teams’ focus

2. Identifies new opportunities
3. Provides valuable information for a “go/no-go” decision
4. Narrows the business alternatives
5. Identifies a valid reason to undertake the project
6. Enhances the success rate by evaluating multiple parameters
7. Aids decision-making on the project
8. Identifies reasons not to proceed

Apart from the approaches to feasibility study listed above, some projects also require other constraints to be analyzed -
1. Internal Project Constraints: Technical, Technology, Budget, Resource, etc.
2. Internal Corporate Constraints: Financial, Marketing, Export, etc.
3. External Constraints: Logistics, Environment, Laws, and Regulations, etc.

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WHO CONDUCTS THE FEASIBILITY STUDY?
A company’s management or directors may conduct a feasibility study, or they may delegate this whole process to
senior managers if they don’t have the in-depth knowledge or the time to complete the study themselves. Management
may lack the expertise necessary to do the study well, and if this is the case an outside consultant or other professionals
can be hired to take control of the feasibility study.
If an outside consultant is brought in, he/she needs to have the following characteristics:

 Must be experienced in conducting feasibility studies.

 Must have experience in the type of study being undertaken or in that industry.
 Must act independently so that a fair and correct opinion is arrived at on which decisions will be based.

FEASIBILITY FOR YOUR BUSINESS IDEAS

Often you will find that you come across this great new business idea. You start talking about it to your friends
and family and listen to their feedback. You ask your existing customers, as well as potential new customers, if they
would like to use the product or service and they have indicated positively. You therefore give your approval and set
about looking at production and marketing. Before you sign on the dotted line, make sure you carry out a feasibility
study.
The feasibility study is simply research. Research will give you the preliminary information you need regarding
your idea and it’s potential. The study could mean the difference between success and failure. People have business
ideas all the time. Some work and some will not work. Some have grown to be multimillion-dollar operations, while others
have failed miserably.

FAILURE BECAUSE OF NO FEASIBILITY

One of the main reasons for failure is where the entrepreneur (who has come up with the idea) has taken the
idea to production and marketing without researching the feasibility of his/her concept. The fact is, simply because you
love the idea - this won't guarantee that it is going to be a roaring success.
A smart businessperson will know the importance of doing the initial research before investing time and money.
A smart entrepreneur will not move ahead and develop a full-scale business, based on an idea that has not been fully
investigated.
This whole process of gathering information is a feasibility study. It can be simple or complex, it can involve
formal help such as a professional or consultant, or the person with the idea can do it himself/herself.

What the Feasibility Study Addresses

Regardless of the format you finally decide on, the feasibility study should address the following:

1. The product or service:

It needs to describe fully what the product or service is, and how and where it will be manufactured or produced.
It needs to address who will produce it and how it is going to be marketed and finally delivered to the end
customers. If it is unique in any way, this has to be detailed. The fact that the product or service has advantages
over other similar existing products or services needs to be spelt out.

2. The market:
The study will identify who the target market user is. It needs to expand on the market, including its demographic
and whether the market is strong. Is the market growing? What challenges will face anyone going into the
market? How will one reach that market? What are the costs involved and what is the potential?

3. The business owners:

Who will be running the business? Who will be on the management team? What are their strengths and their
skills? Do they have the necessary experience and track record to make this work? Will you bring in a consultant
or do it yourself, with the help of your professional advisers?

4. Competition:
Who is the direct competition? Who will be the indirect competition? How does your product compare to the
competitors? Do you have a unique selling point? Can competitors copy what you do or what you have? What

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will be the reaction when they find you are entering the market with a new product?

5. Costs:
Detail fully the costs that will be required to get the idea on to the marketplace. What will be the start-up costs of
your business? What will it cost to run it? Where will the money come from and what will the cost be for that
money?

PARTS OF A FEASIBILITY STUDY

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BSBA Instructor
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A good project study should cover the various phases of the operations of a project: organization and
management, marketing, technical, taxation and financing.

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BSBA Instructor
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TASK #1

Directions: You are required to join in a group of 7 members. If you don’t want to join in a group, you can work alone or
solo. Make it sure that you choose properly because they will be your permanent groupmates at the whole duration of
this semester. Once you already have a group, follow this format (in a yellow paper or bond paper).
BUS AD 8 Feasibility Study

Leader: _____________________________________
Assistant Leader: _____________________________
MEMBERS:
1. __________________________________________
2. __________________________________________
3. __________________________________________
4. __________________________________________
5. __________________________________________

TASK #2

You and your group are required to make a FEASIBILITY STUDY OF A FOOD CART BUSINESS for the whole
duration of this semester. It will be made possible if you and your group will cooperate to each other. Don’t be afraid nor
be stressed because your instructor will guide all the way on how to make it.

TASK #3

Directions: Using brainstorming, decide three (3) food products and three (3) beverage products your group wants to sell
in a food cart. It will be needed in making your feasibility study. Remember that the products must be unique yet possibly
salable toward your customers. To answer, follow the format below.
Food Product Name: Short Description of the Product:
1.
2.
3.

Beverage Product Name: Short Description of the Product:

1.
2.
3.

TASK #4

Directions: Your instructor will provide a feasibility study template soft copy. You’re going to make the first part of your
feasibility study (technical study). In making it, you must encode all the outputs needed (MS Word). To help you
understand the template, your instructor will conduct an online tutorial class in the official fb group. For the schedule, it
will be announced in the official fb group.

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BSBA Instructor
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Resources and Additional Resources

 Feasibility Study: An assessment of the practicality of a proposed project/plan by CFI retrieved from
https://corporatefinanceinstitute.com/resources/knowledge/other/feasibility-study/
 DIFFERENCE BETWEEN FEASIBILITY STUDY AND BUSINESS PLAN by Dr. Diane Hamilton retrieved from
https://drdianehamilton.com/difference-between-feasibility-study-and-business-plan/
 Feasibility Study And Its Importance in Project Management by Simplilearn retrieved from
https://www.simplilearn.com/feasibility-studyarticle#:~:text=As%20the%20name%20implies%2C%20a%20feasibility
%20analysis%20is,some%20cases%2%20a%20project%20may%20not%20be%20doable.
 Preparing Project Feasibility Studies for Philippine Business Enterprise by Vicente T. Paterno.
 https://www.startrungrow.com/information/business/1,2316,1,who-conducts-feasibility.htm
CONTACT DETAILS:
Instructor: Mr. Jude A. Andres
Facebook Account: Jude Serdna
YouTube Channel Account: S and J Trends

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