A technical feasibility study is a form of assessment often carried out by companies before beginning a new project, or by entrepreneurs before starting a new business. The aim of a technical feasibility study is to determine the potential outcomes of a project so that positives can be weighed against negatives before time and money are invested. This type of study looks at the ‘how’ of the project and evaluates all aspects of getting it from the idea stage to reality.
There are many different types of feasibility study that can be used to assess new business ideas. To learn more about business success, visit the Ahmed Dahab SlideShare page. Some of the components of a feasibility study are outlined in the embedded infographic.
Technical feasibility studies can be fantastic tools for both long-term planning and troubleshooting, as well as generating an overview of what a project will look like and deliver once it is completed.
Defining Technical Feasibility Studies
As mentioned above, technical feasibility studies look at the ‘how’ of getting any new project or business off the ground. Therefore, these types of studies analyse factors that may affect the efficient running of the project, including economic, scheduling, legal and technological factors.
Technical feasibility studies also look at the costs involved in setting up the project, such as human resources, physical resources, location, transportation, storage, technology, and all the other aspects that need to come together to actualise the original idea.
Once completed, this analysis can serve as a flowchart to help organise the smooth running of the project and document how the services and products being provided evolve as they move through the business to reach the point of market.
Summary and Outline
The summary of the study should appear at the beginning, providing an overview of the information gathered and the conclusions drawn. This may then be re-written once the study has been completed, to account for any points missed in the initial summarising.
The first draft can act as a guideline for writing the rest of the study, providing a list of topics to cover and highlighting those that are most important. If it is decided to write the executive summary at the end rather than the beginning of the project, then a rough outline that ensures all components are in place is a good starting point.
Some advice on writing an effective executive summary can be seen in the embedded short video.
Two of the largest costs and most important parts of starting a new business or project are the materials and labour required to get the product or service to market.
A technical feasibility study accurately calculates the cost of materials, including any areas where the cost of materials may change in the future as the business grows, such as if there are plans to manufacture certain items in-house or if volume discounts will become available. All materials should be covered, including items such as glue or nails.
Labour costs can be divided into categories and projected into the future as the business grows. Even a small business that starts life with a single employee will be looking towards a future where there are more staff. These might include senior management, supervisors, administration assistants, accountants, engineers, marketers, lawyers, back office personnel, a sales team and more.
If any aspects of the business will be outsourced, either now or in the future, plans for this should be detailed in the labour section. Other costs to consider include transport, distribution and technology. The PDF attachment explains how to calculate labour costs.