Feasibility Study for Small Business: The First Step towards Success
A feasibility study way before laying down the foundation of a business, especially a small one, is a must. This is because a small business owner can not afford to make mistakes. A small folly can cost him a fortune, setting the business in doldrums even before it sets off.
To begin with, think what you want to gain from the business. If you intend to manufacture products of a particular category, you may wish to market it efficiently, so that the business generates profits. To market the products well, you need to position them in the right market. Remember just talking to a few people in the industry would not be enough. You may have to talk to thousands of people and obtain expert advice on whether your business plans will work.
After studying, the market you will have to set prices for your different product categories carefully. You can not price your products more than what the buying power of the public in the particular area that you have targeted. So, fix a price that the masses will be willing to pay. All these details must be a part of your feasibility report. Let us find out what a feasibility study is and how to go about it.
What is a Feasibility Study?
Feasibility study explains to the research that determines the competitiveness of one's business plan. It is market report reporting various details on the preferences of the consumers, consumer habits and their purchasing power, and the competition that the new business is likely to face in the targeted area.
Make a feasibility report:
You can hire the services of a consultant who can make a feasibility report for you. These companies use various methods like – Internet, surveys, industrial seminars and conference, and much literature is available on the subject to create the perfect feasibility report for you. If the industry you intend to get into is well defined such as toy manufacturing, you can use ready reports processed by the national professional organization. If not, you may also seek professional services of the consultants who can give you relevant advice on necessary business tactics after studying the market trends.
Importance of Feasibility Study:
It determines the potential of the market where a product is set to sell. A feasibility study gives a business planner insight into whether the product is required in the market, and if yes, then will the consumers afford to buy it at the price determined. This survey can prove significantly important in formulating pricing strategies for a company's products or services, which is a determinant of a business' success.