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Business Plans: How to Develop a Feasibility Plan

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  • 0:03 What Is a Feasibility Plan?
  • 0:39 Market Research
  • 1:30 Competitive Analysis
  • 2:09 Organizational Competence
  • 2:46 Financial Analysis
  • 3:36 Lesson Summary
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Lesson Transcript
Instructor: Sean Kennedy

Sean has 8 years experience as a supervisor and has an MBA with a concentration in marketing.

Developing a feasibility plan is essential for a new business. In this lesson, we will discuss the purpose of market research, competitive analysis, organizational competence, and financial analysis.

What is a Feasibility Plan?

Melissa is an entrepreneur and has a great idea for a business. The product she is introducing will save all information from a phone to another small device. Although this sounds like a great business, she must first develop a feasibility plan. A feasibility plan determines the issues related to a business and helps decide if the business has the possibility of succeeding.

Feasibility research is essential because you want to make sure your business can be successful before putting time and money into something that is not even possible. A feasibility plan's main purpose is to determine if the company will be at least able to meet the operating expenses.

Market Research

The first thing Melissa is going to want to do to determine how successful her new business can be is to do market research. Market research is the gathering of important data to determine if the customer's needs and preferences will be met. Melissa should research if people want to purchase a device to save their information on their phone and if she will be able to create the number of products needed for a sustainable business. She will also want to look into the amount of money it will cost to make the product and how much she will be able to sell it for.

Every entrepreneur must do extensive market research to make sure their business idea will be successful. You will also want to research the target market for the product. A target market is the demographic of consumers that will purchase a product, which can be separated by age, sex, or income among other categories. An entrepreneur must also take into consideration if there is an actual demand for the business venture they want to start.

Competitive Analysis

Melissa must look to determine what other businesses will be competing with her business. She may be competing with some large cell phone carriers because they allow customers to save information, so it will be essential for her to perform competitive analysis. Competitive analysis analyzes competitors and determines their strengths and weaknesses. This process is essential because it helps a business determine if they will be able to stay competitive.

It is important as an entrepreneur to analyze who your competitors are and if you can differentiate yourself from those businesses by developing features or benefits that will set you apart from the competition. You want to stand out and want consumers to remember your business compared to your competition.

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