The purpose of a feasibility study is to analyse the viability of an idea. It uses a structured approach for the analysis. The primary activity in a feasibility study is to investigate a concept or idea to determine if a company should implement the idea or proposed business activity. A study is conducted on an operational, technical and economic basis.
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Things you need
- Background about your company
- Client testimonial
The proposal should include a cover letter thanking the intended reader for the opportunity to propose the study. It should also briefly describe the background that led to the request for proposal. For example: "We understand that XYZ company has to comply with new Environmental Protection Agency mandates and that there are three options available. You have requested that we perform a feasibility study to determine which option is the best to follow."
Describe the objectives of the study. For example, an objective could include "Decide if proceeding with one of three alternatives is economically and operationally viable."
Describe how data will be captured to help analyse feasibility. Identify personnel and industry experts who will be surveyed and interviewed. Refer to the types of third-party data that will be obtained.
Outline cost information that will be obtained, such as capital expenditures and variable cost. Include project-related costs such as a project manager. Also identify fix costs, such as equipment rental.
Outline in the proposal how you will perform a cost benefit analysis. Describe the data such as estimated costs and revenue that will be used. Indicate how you will calculate the break even points for alternatives being considered. Outline what you will consider to calculate the benefits such as savings in labour costs.
Describe what will and will not be included in the feasibility study. For example, "This study will be limited to United States operations only."
State the fees that will be required to conduct the study, when payments will be due and how long it will take for the study to be completed.
Provide space for the client to sign and approve the study.
Include supporting information, such as background on your company, profiles of who from your company will be assigned to the study and testimonials from your past customers.
Tips and warnings
- Make sure you demonstrate an understanding of the prospect's business.
- Make sure you have not underestimated the number of hours it takes to complete the study.
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