What is a feasibility study? Definition and examples:
A feasibility study, also known as feasibility analysis is an evaluation and analysis of a project or a system that somebody has proposed. The study tries to decide whether the project is technically and financially possible, i.e., is it technically or financially practical? Financially feasible, in this context, means whether the project is possible within the estimated cost.
A feasibility study also determines whether a project makes good business sense as in - Will it be profitable?
Put simply; the study is an analysis of how easily or successfully we could complete something. It also tries to determine how profitable or unprofitable it might be.
When large sums of money are at stake, most of the companies and organizations carry out feasibility studies.
Feasibility Study vs Business Plan:
A Feasibility study is similar to a business plan, but the meaning is not the same. When somebody has an initial business idea, the company carries out a feasibility study. The study aims to flush out the possibilities in that business idea. On the other hand, the business plan describes the plan, the strategies, and financial projections (forecasts). A feasibility analysis tells you whether your business will work while a business plan tells you how it will work.