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A feasibility inspection evaluates the viability, value, and desirability of a project. Should and can the project that you are planning be carried out. Are there enough funds? Is there enough manpower? Answer these questions and many more with a digital checklist in order to make sure the project you are embarking on is worth your while.
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A feasibility inspection, which may sometimes also be called a feasibility analysis or feasibility report, evaluates whether a project plan is viable or not. It strategically assesses the practicality and likelihood of success so that you can decide if you want to continue with the project or maybe change some variables. The findings of the inspection are recorded in a feasibility report.
A feasibility report records the findings of a feasibility inspection and answers the following two questions:
A feasibility inspection must be conducted after pitching a project but before actually starting any work. The inspection is essentially considered a part of the project planning process. Feasibility studies are often performed together with a project risk assessment or a Strengths and Weaknesses, Opportunities and Threats (SWOT) analysis.
A feasibility inspection is necessary for confirming market opportunities before you spend time, money, and effort on a project. It can also be used to choose between two business alternatives. This makes the feasibility report a useful decision-making tool as it provides you with relevant information such as the pros and cons of a proposed project.
A feasibility inspection might not be necessary if you have already determined that a project is viable or if you have done a similar project in the past. If your competitors are succeeding with a similar project, you might also want to skip the feasibility study. It will also not be necessary if the project is small and will have an insignificant long-term impact on your business.
1. The differences between a project report and a feasibility report
2. The four types of feasibility reports
3. The central elements of a feasibility inspection checklist
4. How a digital checklist can support you in conducting a feasibility study
A project report records various aspects of a project for future reference and provides information about the scope, time, and budget of the project. It also includes the company background, project description, the process, marketing plan, operating costs, and capture structure. The feasibility report supports a detailed project report.
A feasibility inspection, however, is different from a project pitch. In a pitch, you are evaluating whether a certain idea is good for your company or whether it is in line with your company’s overall strategic plan. The feasibility study is done when you have already decided that the project is a good idea in theory and fits with the company’s vision. The feasibility study is then a way to confirm that your team has access to the necessary tools and resources for the project.
A project charter is also not a feasibility study, since it is more informal. It is a document that you employ when pitching a project to stakeholders. It contains the project scope and objectives that the project sponsor or the executives in your company will review before approving the project for a feasibility inspection. A feasibility study must be done only after the approval of the project charter.
A more formal version of the project charter, the business case, meanwhile, is made when pitching a bigger, more complex project with a significant impact on the organization. It is longer than the project charter and also includes information about the financial aspect of a project which concerns the senior stakeholders.
Once the stakeholders approve the business case, you can proceed to perform the feasibility study to make sure the project is doable. If the feasibility report shows that you don’t have the tools and resources for the project, you can request the executive stakeholders to provide them for you.
A feasibility inspection is also not a business plan. A business plan is a formal document that outlines your business goals. It is typically written when you are starting a business or your company is going through a significant change. It is a document that guides you in making business decisions such as formulating your short-term plans.
In implementing your business plan, you will need to invest in various projects. This is where you will need to conduct a feasibility inspection. This is to evaluate whether a certain project is practical and aligned with your business plan.
A feasibility inspection has four key elements. They are also referred to as the different types of feasibility inspection. However, most feasibility studies include all of the following:
A technical feasibility study evaluates whether the planned project is technically possible and verifies that there will be no barriers to the performance of the project. This type of feasibility study determines if you have access to the equipment needed for the project and also assesses your team’s technical knowledge relevant to the project objectives. For example, if the objective of the project is to produce 100,000 products a month, but your team is only able to produce 50,000, the project is not technically feasible.
As the name suggests, financial feasibility evaluates the financial viability of the project. A cost-benefit analysis is performed during a financial feasibility inspection. This study also estimates the possible return on investment (ROI) and financial risks. The objective of a financial feasibility inspection is to find out the financial benefits the project will produce.
How will the project’s output perform in the market? This is the question that the market feasibility study aims to answer. The study will involve a market competition breakdown, market analysis, and sales projections.
You need to determine whether or not your team has the capacity to complete the project. That is why you need an operational feasibility study. The study outlines the organizational structure, staffing requirements, and all legal requirements. The objective of this study will be to find out whether you have the skills and resources to complete the project.
Most feasibility studies are structured similarly and serve as an assessment of the practicality of a proposed business idea. Creating a clear feasibility study helps project stakeholders during the decision-making process and should clearly outline the propositions.
A feasibility study generally contains the following elements:
With Lumiform’s digital audit app you can easily perform a variety of inspections on the go from your smartphone or tablet - online or offline. Create checklists for your Feasibility Inspection Report to easily collect data and figure out if your project is ready to launch.
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