Having a study on the feasibility of Business ideas is a very important module that needs to fully grasp before one seeks for funding either in form of loans or through equity and also in attracting investors to one’s business.
It has been discovered that most startups packed off usually within the first year of starting and the main cause is a result of a lack of feasibility of Business ideas.
One of the pertinent questions you need to ask yourself before starting any business venture is, how feasible will/is the business be? Actually, about 50% of applications received by investors are deemed not feasible. This article is aimed at providing you with tips on how to validate your business ideas and ascertain if it’s feasible or not.
While considering how to make your business or idea feasible, and attract funding from individuals, banks, investors, friends, and family, we will discuss this in 5 sub-topics, which are as follows
- Firstly we would talk about your Products
- Then we would delve into the industry your product is serving
- We would also talk about your target audience and early adopters
- then we would carry out a feasibility study of the businesses
Firstly, you have to note that, there are no bad business ideas usually, but what exists majorly are bad strategies, timing, and location of execution of that business.
Whatever your idea is, the question you must ask is this;
What is my product? – Feasibility of Business Ideas
This encompasses providing answers to some selected questions, like What am I selling exactly? What value am I providing? What do I expect my (future/current) customers to pay for?
This is for both product-based businesses and service-based businesses.
So, what is the difference between a product-based company and a service-based company?
“Product-based companies are the ones that produce high-end products in order to satisfy their customers’ requirements. The important aspect of these companies is to produce top-quality products. These companies constantly improve the products with new features and upgrades using different and new technologies that are at their disposal.”
“Service-Based Companies: Service-based companies are the ones that do not have a particular product but their primary business is to provide services. The important aspect of this type of company is the client. They do not prepare anything specific before the problem arises at the client’s end. Their sole aim is to ensure that the service provided to the client is of the best quality.”
As an entertainment entrepreneur that runs a karaoke company, what that means is that products are sold and services are rendered to customers. A business can be both product-based and service based.
Whatever your idea is, you must clearly define what products you have and the services you provide. If you can explain what products/services you render in layman’s terms, then you need to check again if you really are in business.
What industry is your idea in? – Feasibility of Business Ideas
Is it fashion? FMCG? Media? Medicine? Tech? Edutech? Agriculture? Education?
How large is that industry in the global market? In your state and your city?
For instance, the karaoke industry worldwide is worth anywhere from $20 billion.
These numbers will help you make the right decisions at all times.
How large is the audience for your proposed idea/business?
What demography will you be selling to?
All of these must be clear to you before you start your business, and if you’ve started and they are not clearly stated yet, its never too late
The penultimate point – the feasibility study
A lot of times, we entrepreneurs get quite emotional about our ideas and businesses once they find their way into our minds and it’s usually difficult to turn us from the direction we choose, however, you must never make any business decision without conducting proper research.
So, figure out the specific feasibility studies attached to your business/idea or industry, run it, or pay qualified personnel to run it. only make your decision after.
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Final point/question – Feasibility of Business Ideas
- what do you want to do differently?
- What are you doing differently?
- Why should I patronize you and not your competitor?
- What makes you special?
- Do you have numbers to support your claims?
All the above must be duly answered, and you will have a good idea if the business will last or not.
FAQ on Feasibility study?
What Are the Steps in a Feasibility Study?
A feasibility study starts with a preliminary analysis. Stakeholders are interviewed, market research is conducted, and a business plan is prepared. All of this information is analyzed to make an initial “go” or “no-go” decision.
If it’s a go, the real study can begin. This includes listing the technological considerations, studying the marketplace, describing the marketing strategy, and outlining the necessary human capital, project schedule, and financing requirements.
Who Conducts a Feasibility Study?
A feasibility study may be conducted by a team of the organization’s senior managers. If they lack the expertise or time to do the work internally it may be outsourced to a consultant.