Feasibility Study Examples Top 3 Business Examples

Feasibility Study Examples

With the help of the feasibility study, one can cover different necessary elements required for gathering all the data to make an informed decision. It is also important for taking the approval of stakeholders as the stakeholders, with the help of the Feasibility study, can analyze the different aspects of the project. Let us discuss some examples of the feasibility study.

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Top 3 Examples of Feasibility Study

Example #1 – Expansion of Hospital

If the hospital wants to expand its area of a building, then it may conduct the feasibility study, which will help it in determining whether a hospital should go ahead with the project of expansion or not.

There are various areas which should be taken into account, like in the present case. Following are the different factors that the feasibility study will include:

The cost of laborThe Cost Of LaborCost of labor is the remuneration paid in the form of wages and salaries to the employees. The allowances are sub-divided broadly into two categories- direct labor involved in the manufacturing process and indirect labor pertaining to all other processes.read more and material that will be incurred for the expansion.What will be the change in the revenue to the hospital if the expansion is done?How disruptive it will be for the staff of the hospital and its patients.What is the public opinion with respect to the new extension, i.e., whether the local community is in favor of such a project or they are against it?What is the response of the various stakeholders of the hospital as the stakeholders play an important role in any organization as they are the people who have a major interest in a project or business? Different stakeholders in the case of the hospital include staff, patients, visitors in the hospital, management, and local community, etc.

One should evaluate all the project’s pros and cons while conducting the study and then allot the weigh to them with respect to each other. All the responses should be gathered properly and analyzed on different parameters as applicable. Based on that, it will be determined that the hospital should go ahead with the project expansion or not.

Example #2 – Starting a New Family Restaurant

Conducting a feasibility study before opening the restaurant will help the owner in saving time and money as, with the help of a study, he can make an informed decision regarding the chance of success of the venture.

In the present case following are the different factors that the feasibility study will include:

Obtain Market Statistics: Feasibility study should include studying the demographic characteristics like age and income to know the size of the potential market. In the case of the family restaurant, one should know the number of families residing in the area as singles or students will not count for the potential share.Potential Locations: The location for the family restaurant should be the area having high-traffic. Parking and other factors should also be considered to make sure that the place is easily accessible to customers. Also, there should be a proper tradeoff between location and leaseLeaseLeasing is an arrangement in which the asset’s right is transferred to another person without transferring the ownership. In simple terms, it means giving the asset on hire or rent. The person who gives the asset is “Lessor,” the person who takes the asset on rent is “Lessee.”read more cost.Competition: At the time of the Feasibility study, one should gather information about the total number of nearby restaurants and the style of those restaurants. The area should not already be saturated with a similar concept as planned. Thus one should properly analyze the strengths and weaknesses of all major competitors.Industry Analysis: For studying the feasibility, one should join hospitality organizations and attend their meetings to know more about the health and growth of the industry.Current Economic Environment: Decide whether as per the current economic environment launching a new restaurant is advisable or not. Whether any restaurants were closed in the past few years or not and their reasons thereof.Cost Structure: One should break down the cost of each item on the menu and determine the major suppliers in the future and prices offered by them. Also, there should be a proper cost projection of the food cost projections.In the feasibility study, one should evaluate management capability, i.e., whether an entrepreneur has the required skill and experience to make a venture successful. He should also have the capability to manage the staff and to understand properly about kitchen operation.

These are some of the important parameters that one should evaluate to conduct a feasibility study on starting a new family restaurant. Apart from these, other factors like laws and regulations, logistics, and other factors as applicable should also be considered before making the decisions.

Example #3 – Expansion of School

If the school wants to expand its area of campus, it may conduct the feasibility study, which will help it in determining whether the hospital should go ahead with the expansion or not.

The cost of labor and material will be incurred for the expansion.What will be the change in the revenue of the school if the expansion is done, i.e., what will be the increase in the student’s number if the school is expanded? Whether it will be able to generate more revenue than the cost incurredCost IncurredIncurred Cost refers to an expense that a Company needs to pay in exchange for the usage of a service, product, or asset. This might include direct, indirect, production, operating, & distribution charges incurred for business operations. read more.How disruptive it will be for the staff of the school and students.What is the public opinion with respect to the new extension, i.e., whether the local community is in favour of such a project or they are against it?What is the response of the various stakeholders of the school? Different stakeholders in the case of the school include students, teachers, parents of students, management, and the local community, etc.What are the laws which might get affected by the expansion, and whether the school will be able to meet those law requirements?

All the parameters should be evaluated along with their pros and cons, and decisions should be taken based on that for the expansion.

Conclusion

With the help of the feasibility study, one will know all the details of the projects and can, after that, organize them properly. The feasibility study conducted helps the parties involved in identifying various problems associated with the project like the logistic problem, labor supply, etc., which will be useful in getting the solutions for the problem. It at the same time also helps in developing the different strategies for the business like financial strategies, marketing strategies, etc. Thus it helps the organization in making an informed decision.