Prepare technological feasibility report of a chosen product/service

Introduction

A feasibility study is an analysis of how successfully a project can be completed, accounting for
factors that affect it such as economic, technological, legal and scheduling factors. Project
managers use feasibility studies to determine potential positive and negative outcomes of a
project before investing a considerable amount of time and money into it.

BREAKING DOWN 'Feasibility Study'

For example, a small school looking to expand its campus might perform a feasibility study to
determine if it should follow through, taking into account material and labor costs, how
disruptive the project would be to the students, the public opinion of the expansion, and laws
that might have an effect on the expansion.

A feasibility study tests the viability of an idea, a project or even a new business. The goal of a
feasibility study is to place emphasis on potential problems that could occur if a project is
pursued and determine if, after all significant factors are considered, the project should be
pursued. Feasibility studies also allow a business to address where and how it will operate,
potential obstacles, competition and the funding needed to get the business up and running.

Importance

Feasibility studies allow companies to determine and organize all of the necessary details to
make a business work. A feasibility study helps identify logistical problems, and nearly all
business-related problems, along with the solutions to alleviate them. Feasibility studies can
also lead to the development of marketing strategies that convince investors or a bank that
investing in the business is a wise choice.

Components of a Feasibility Study

There are several components of a feasibility study:

Description – a layout of the business, the products and/or services to be offered and how they
will be delivered

Market feasibility – describes the industry, the current and future market potential,
competition, sales estimations and prospective buyers.

Technical feasibility – lays out details on how a good or service will be delivered, which includes
transportation, business location, technology needed, materials and labor.

Financial feasibility – a projection of the amount of funding or startup capital needed, what
sources of capital can and will be used, and what kind of return can be expected on the
investment.

Organizational feasibility – a definition of the corporate and legal structure of the business; this
may include information about the founders, their professional background and the skills they
possess necessary to get the company off the ground and keep it operational.

The Technical Feasibility Study Must Support Your Financial Information

Do not make the mistake of trying to entice investors with your staggering growth projections
and potential returns on their investment that only includes income (revenue) to the business.
With any increase in revenue, there is always an increase in expenses. Expenses for technical
requirements (i.e., materials and labor) should be noted in the technical feasibility study.

You should also not strictly rely on feasibility study conclusions to impress an investor.

An experienced investor or lending institution will read your entire report and come to their
conclusions. Therefore, it is critical that the technical and financial data in your study reconcile.
If other parts of your feasibility study show growth, you will also have to project labor and other
costs and the technical ability to support that growth.

The technical component serves as the written explanation of financial data because if offers
you a place to include detailed information about why an expense has been projected high or
low, or why it is even necessary. It demonstrates to potential investors and lenders (and in
some cases, potential clients) that you have thought about the long-term needs your business
will have as it grows.
Preparing an Outline for Writing Your Technical Feasibility study

The order that you present technical information is not as important as making sure you have
all the components to show how you can run your business.

You do not have to include specific financial information in the technical portion of your
feasibility study, but all information in this component must support you financial data
represented elsewhere. Basic things that most businesses need to include in their technical
feasibility study include:

 Materials
 Labor
 Transportation or Shipping
 Physical Location
 Technology

Calculating Material Requirements

In this section, you list the materials you need to produce a product or service, and where you
will get those materials. Include information such as if volume discounts will be available as
your business grows, or if you ever plan to manufacture your parts at some point in time.

Things to include in your list of materials:

 Parts needed to produce a product,

 Supplies (glue, nails, etc.), and
 Other materials that are involved in producing or manufacturing your product.

You do not need to include actual financial data in this portion of the study but financial data
supporting your narrative assessment should be included in a separate spreadsheet as an
attachment

Calculating labor requirements

You cannot run a business, offer services, or manufacturer Products for free. Even if you start
your business with you as your only employee, at some point, if you plan to grow you will need
to add to your labor pool.
 In most cases, labor will be one of your biggest small business expenses. In this section, you will
list the number and types of employees needed to run your business now, and that may be
employed in the future as your business grows.

You can break labor into categories if necessary:

 Senior Level Management

 Office and Clerical Support
 Production or Distribution
 Professional Staff (i.e., lawyers, accountants, engineers, marketing)
 Fulfillment (i.e., mail room, shipping department)

If you plan to outsource (hire another company to do a job for you) order fulfillment ,
fundraising, or other aspects of your company’s business be sure to list what functions will be
outsourced and to where.

Transportation and Shipping Requirements

If you need to ship items from one place to another, how will you transport these items? Small
items can be shipped via local carriers, DHL, USPS, but heavy or bulk items may need to be
transported via a freight or trucking company.

If you are shipping perishable items, you will need special overnight handling. You may also
need special permits to ship certain items, and nonprofits organizations should consider
applying for discounted postal rates. These are all things that affect the technical, or “how” of
moving your goods from one place to another.

If you offer services, how will trainers, educators, consultants, sales personnel get to customers
and clients?

If you offer a product that is governed by state or federal law (such as medications or
prescription medical supplies), do you need a licensed distributor or pharmacy to ship on your
behalf?

In the Transportation Feasibility component, list things that will affect how you get your goods
or services to other businesses or individuals, including:

 The methods of transportation and shipping services that will be needed to get your
product or services to a customer;
 Special handling or other unique arrangements required to transport your product;
 Any special permits that will be required, including postal rate discounts; and
  Cars (company- or privately-owned) and other vehicles needed to conduct your
business.

Physical Location of Your Business

Where you run your business will have an effect on your success. If you are starting out in a
home based office, project whether or not, and when, you might need any of the following:

 A “Brick and Mortar” Office ( Office spaces outside your home)

 Warehouse Facilities
 Your Own Factory
 Your Own Trucking Facility
 Any other purchased or rented facilities needed to conduct your business.

In the Physical Location Feasibility component, you should also discuss the pros and cons of
where these facilities will be located. Should they be in one central location, or across state
lines? Do you need to have special parking considerations for customers or trucks? Do you need
to be near other facilities such as an airport, commerce center, or shopping mall?

Technology Requirements to Run Your Business

Every business needs at least some kind of technology to operate. The Technology component
includes discussions about and a list of the following:

 Telephone Answering Systems

 Computer Hardware and Software
 Inventory Management
 Cash Registers, Credit Card Collection, Check Processing
 Special Devices to Accommodate the Disabled
 Teleconferencing Facilities and Equipment
 Cell Phones, PDA’s, or Other Devices Needed to Conduct Business
 Alarm or Camera Systems
 Manufacturing Equipment

Summary of the Technical Feasibility Study

The order in which you present your technical requirements is not as important as making sure
that you include all the technical requirements of your business from production to customer
receipt.

This information will help investors know more about the operations of your business. Having a
great idea for a product or business is not enough; you have to show how you can make money
from the idea. The technical feasibility study addresses the physical and logistical mechanics of
it, and how, you will be able to get something into the product and back out the door to
customers.

Conclusion

Hence we have made technological feasibility report of a chosen product/service