Feasibility Report is study to determine the techno – commercial viability of an investment or business strategy, realisation of an idea into commercials. Conducting a feasibility report is one of the key activities within the project initiation phase. It aims to analyse and justify the project in terms of technical feasibility, business viability and cost-effectiveness. Basically a Feasibility Report is to evaluate the project’s potential for commercial success. The study serves as a way to prove the project’s reasonability and justify the need for investment.
Technical feasibility involves the evaluation of the project with respect to technical part of the project viz; technology, constructability, source of raw material, availability of talent, regulatory norms, local statutory norms etc. Whereas commercial feasibility is the assessment typically involves the evaluation of investment, financial cost, operating cost, market size, taxations, product potential, ROI, break even analysis, profit analysis & other commercial aspect of the project.
Once the study is done, a Feasibility Report is evolved to summarize the activity and conclude if the particular project is realistic and achievable. This report gives a brief description of the project and some background information. It’s formal written document to signify whether the investors can proceed or not. This helps investor & organizations to determine the viability of investment associated with a project before financial resources are allocated.
Typical work incorporated under Feasibility Report is as below :
- Purpose of the Project Feasibility report
- Finalisation of Project Brief
- Collection of background information
- Define the evaluation criteria
- Evaluation & analysis of various technology
- Define the list of assumption & key notifications
- Estimate of various commercial aspects
- Propose the outcome
- Brainstorming Session