The Feasibility Study and You: A Dynamic Duo

You have a great new business idea. You've asked your friends
and family for feedback and they gave you thumbs up approval.
You've asked your existing customers if they'd have use for
such a product or service and they've indicated they would.
Lastly, you've done some soul searching and you know you're
truly interested in this concept and have the commitment to
stick with it over the long haul.

So far so good. Now it's time to do a feasibility study.

I can hear the resistance already.

"A feasibility study, you say? Isn't it something that CEO's
of Fortune 500 companies fiddle with? What does it mean to the
owner of a small or home business like me?"

Consider: A feasibility study is research that gives you
preliminary information regarding your business idea's
potential to succeed in the marketplace.

It can mean the difference between success and failure. There
are plenty of business ideas. Some of them will work. Some will
not. We know that every year, scores of new businesses flounder
and fail, despite the owner's hard work and enthusiasm. Sadly
to say, one major reason for failure is the entrepreneur's
willingness to commit to a favored idea without researching the
feasibility of the concept. The demons battled here are
internal ones: Loving an idea doesn't mean it's going to be a
success.

Smart entrepreneurs know the importance of doing initial
research before investing time and money in starting a new
business, or in developing a full-scale business plan.

This gathering of information is the feasibility study. It can
be a complex, formal document used for attracting investors, or
a simple page of notes to oneself. Regardless of which format
you need, the feasibility study should address the following
categories in detail:

a. The Product or Service
Describe the product or service. What is it? How and where will
it be manufactured or produced? By whom? How will it be
delivered to customers? In what way is it unique?

b. The Owners and Management
Who are the members of your management team? What are their
strengths in this particular venture? How will those strengths
benefit the business concept? What necessary skills and
strengths are missing from your present team? How will you
compensate for those skills? Will you hire? Contract out? Take
training courses? Other?

c. The Market
Who is your market? What is the demographic? Is the market
strong? Is it growing? What challenges are facing the market?
How will you reach the market? What are the costs involved in
reaching this market?

d. The Competition
Who is the direct competition? Who is the indirect competition?
How does your product compare to theirs? What is your unique
selling point? Can your competitors readily duplicate your
product or service? How are they likely to react when you
enter the market?

(Note: Direct competition refers to companies providing the
same or similar service. If you are offering yoga classes, for
example, your direct competition will be other individuals or
businesses that are offering similar classes within your
geographic area. Indirect competition refers to other ways in
which your potential customers can obtain a similar product or
service. Yoga books and videotapes, yoga
television shows, etc., as well as businesses offering classes
such as Reiki, Shiatsu, Pilates, etc., are your indirect
competitors.)

e. Budget
What will it cost you to start your business? What will it
cost to run it? Where will the money come from?

Satisfied with the results of the study? Excellent. Now take
that enthusiasm and commitment and set about creating your
brand new business! You and your feasibility study are a
dynamic duo!