Business Feasibility Study - Definition and Benefits

Business Feasibility Study - Definition and Benefits
Business Feasibility Study - Definition, Benefits, Aspects, Materials, Stages, Examples: An activity that studies in depth about an activity or business to be carried out, to determine whether a business is feasible or not. The main purpose of this business feasibility study is of course that will standing can go as expected either in the short or long term.

business feasibility study
Understanding Business Feasibility Study
Understanding Business Feasibility Study according to Kasmir and Jakfar (2003) is an activity that studies deeply about an activity or business to be carried out, to determine whether a business is feasible or not.
the main objective of this business feasibility study is that of course the one that will stand up can run according to expectations both in the short and long term and to measure how big the business potential is in both supportive and unsupportive situations.
Understanding Project feasibility study is a temporary activity that takes place in a limited period of time with the allocation of certain resources and is intended to carry out tasks whose objectives are clearly outlined.
For example: building factories, making new products or participating in trade shows.

Project profile features:
Having a specific goal, final product, or final work
Costs, work schedules, resources, and required quality criteria have been determined
Activities are temporary, in the sense that their age is limited by the completion of tasks. The starting and ending points of activities are clearly defined.
Activities are not routine, not repetitive. The type and intensity of activities change only as long as the project is in progress.
Differences between business feasibility studies and project feasibility studies:
A business feasibility study is a study of a business plan that not only analyzes whether a business is feasible or not feasible to be built, but also when it is routinely operationalized in order to achieve maximum profits for an undetermined time.
For example: launching a new product.
While the project feasibility study is a study of the feasibility of a project being built for a certain period of time.
Factors that make this business feasibility study experience errors include: data and information obtained is incomplete, inaccurate, wrong calculation, wrong job implementation, environmental conditions or intentional elements by the manufacturer.

Some preparations before carrying out a business feasibility study:
Data and information collection
Data processing
Data analysis
Decision making
Benefits of a business feasibility study:
Before investing in companies that will run investors will study the business feasibility report that has been made, because investors have a direct interest in the benefits to be obtained and capital guarantees to be invested.

Before giving credit, the bank needs to review the business feasibility study and consider the bonafideity and availability of collateral owned.

Company Management
As a company management leader also requires a business feasibility study to find out the funds needed, how much is allocated from their own capital, funding plans from investors and creditors.

Government and Society
Companies that will stand must pay attention to policies set by the government so that they can be prioritized to be assisted by the government.

For Economic Development Goals
The business feasibility study needs to be analyzed the benefits that will be obtained and the costs incurred by the project to the national economy, because as far as possible the project is made for the achievement of national goals.

Stages and Examples of Business Feasibility Studies
In conducting a business feasibility study there are several stages of study that should be undertaken, the following are several stages:

Idea Discovery
In order to generate project ideas that can produce salable products for sale and profitability, it requires well-organized research and adequate support of resources. If more than one project idea is chosen, paying attention to:
project ideas in accordance with his conscience
decision makers are able to involve themselves in things that are technical
confidence in the project's ability to generate profits.
For example, some project ideas that qualify after being selected are ideas about the wedding dress rental business, motorcycle rental, computer rental.

Research Stage
After the project idea has been selected, a more in-depth study with the scientific method is carried out:
collecting data
processing data
analyze and interpret the results of data processing
deduce the results
make a result report
For example: based on the example above 3 types of project ideas have been determined. Furthermore, the three project ideas are examined through their aspects broadly enough and deeply to get input to evaluate these ideas.

Evaluation Stage
i.e. comparing things with one or more standards or criteria that are quantitative or qualitative. things that are compared in a business evaluation are all the costs that will be incurred by the business proposal and the benefits or benefits that are expected to be obtained.

There are 3 types of evaluations:
evaluating the project business to be established
evaluating the project to be built
evaluating businesses that are already routinely operational
After evaluating the three project ideas above, for example, only two project ideas were deemed feasible, namely motorcycle rental and computer rental.
In a business evaluation that will be compared are all costs that will be incurred by the business proposal as well as the benefits or benefits that will be expected to be obtained.