There are various confusions, thoughts, dilemmas when it comes to the feasibility of an innovation. If you are not aware of feasibility, here is the answer: “Feasibility means something which one can possibly do”. One observes feasibility issues whenever he/she presents its business plan a presentation in front of investors.
In some cases, investors make a statement like “Your business plan is not feasible, otherwise others would have implemented it”. These sentences extremely destroy the motivation of people involved in such business ideas. The real question lies, whether those investors are correct about it or not. So, let us look more closely at the concept of feasibility.
Importance of Feasibility Study
There are references proving that feasibility study is important. Let us understand each importance briefly.
1. Exploring Reality
The feasibility study helps you to direct the project/business idea towards the reality which you are currently imagining. In this, you have to find answers to many questions in starting stage. Answers to these questions make you focus on further specific questions which finally take you to an ultimate answer whether you can implement it or not.
Examples of Questions are ‘Whether people will like your product?’, ‘Will people accept improvement or changes in product or methods?’, ‘Whether the business can create profits?’, ‘Whether competition has created entry barriers?’, etc.
For this, one must identify the benefits, uniqueness, possibilities, problem-solving nature, etc. of their business ideas so as to tackle these questions.
2. Possibilities of Alternate Ways
The feasibility study helps you to find alternative ways of developing your business idea. These alternatives could reduce your time, efforts, expanses, etc. Hence, this could increase your work efficiency, profitability, scalability, etc.
Also, this study allows you to explore opportunities that you haven’t even thought of at the initial stage. Further, this will prevent you to waste your efforts and start everything again.
3. Knowledge of Financial Risks
The feasibility study helps you to determine how much you are putting your money at risk. After converting your idea into business, it involves finding answers to various other questions. These are ‘Whether you are able to maintain cash flow or not?’, ‘How much repeating expenses are there in the project?’, ‘How long you can afford the expanses?’, ‘What more equipment, tools, accessories you will require for developing or manufacturing?’
4. Understanding Possibility of Business Operation
The feasibility study helps you to find whether you can operate your business or not. This involves finding answers to questions like ‘Is there any possibility to find an area for manufacturing the product?’, ‘Are there possible transportation facilities like road connectivity, transportation vehicles?’, ‘Is it possible to find people who can run and maintain the equipment?’, ‘Is it possible to make timely repairs if equipment malfunctions to avoid hampers in production?’, etc.
Types of Feasibility
Types of Feasibility can be easily remembered from the word TELOS. It is a short form for Technical, Economic, Legal, Operating, and Scheduling Feasibility. This is classified according to the University of Toronto.
In Technical Feasibility, you need to deter the possibility to create a process that takes expected input and gives expected output. This will depend on the expertise of team members who have taken responsibility for all technical activities.
Further, Technical Feasibility will help you to determine current resources available and resources which you will require. Accordingly, you have to reduce this gap.
Technical Feasibility is also related to production methods. With the same amount of resources, if you improve the production methods, then you could pass technical feasibility without introducing new resources. Otherwise, with poor production methods, even sufficient resources cannot validate technical feasibility.
Determining the Requirements of the Project is also a part of Technical Feasibility. It involves finding components and machinery for the project, external capitals like rooms, amount of labor with a specific skill set for each of them, etc.
Legal Feasibility is checked to make sure that the project which is taken, fulfills the requirements of the law at the domestic and international levels. Some team members need to study carefully and consistently the laws applicable to the project to avoid any violations.
You have to perform three tasks for successful verification of legal feasibility i.e.
- Legal Framework Analysis Applicable on Project.
- Evaluating legal readiness of obtaining authority.
- In-depth Legal Analysis of the Main Project Issues.
One also needs to take care of certain factors while dealing with Legal Feasibility. These are -:
- Project Financial Aspects.
- Commercial Viability.
- Project Bankability.
- Land and Existing Asset Usage.
- Alternate Ownership Claims on Land.
- Other User Rights.
- Issues Concerning Employment.
- Tax and Accounting Issues.
Operational Feasibility deals with various factors like ‘How Customers feel about newly implemented process?’, ‘Whether the process within an organization can or will work?’, Tasks of Stakeholders, Manager, and End-Users, ‘How to Evaluate Management, Team and Individual Resistance and handle them?’, ‘How the work environment will be affected and changed if possible?’, ‘How to explain the implementation once you overcome resistance?’.
Schedule Feasibility helps you to understand whether the project can be completed within a proper time frame or not. This study is done to avoid the project running out of deadline after its completion. The time frame can be decided by the company, clients, and customers. If the deadline is not carried out properly, the company may lose clients and employees may lose the company.
Further, this Feasibility also helps to determine the speed of the development process. If it is slow, you can accordingly increase the number of members in the team. But, if you are not able to afford new employees then you can train your current employees in a better manner to increase their speed and performance.
Examples of Projects which are Feasible or Not Feasible
Here we consider some examples of innovative projects to understand whether they are feasible or not. Then, we will discuss why each project is feasible or not feasible one by one -:
- Self-Driving Car with Top Speeds up to 300 KMPH (Kilo Meter Per Hour).
- A PC Game (Like Grand Theft Auto) whose location is set in a particular location in India.
- A Necklace with Spy Camera
Examples of Projects which are Not Feasible
1. Self-Driving Car with Top Speed up to 300 KMPH – The first reason for the project not being feasible is technological constraints. Google’s Self-driving car i.e. Waymo has its top speed near 56 KMPH. Further, they have several disadvantages. These are possible removal of jobs for drivers, very high price, worse accidents due to non-predictive nature of traffic, difficulty to decide who is guilty of the accident, possibility of vehicle hacking which can create security issues, weather problems, disturbing the driving experience of people, not able to adapt changes in route or diversion, illegal use by terrorists, etc. As a result, this project faces Technical and Legal Feasibility Issues.
2. A Hyperloop – According to Eureka, Hyperloop’s feasibility is hampered by Economic and Legal Feasibility. Economic Feasibility is hampered in the sense that routes are required to place a Hyperloop which cannot be expected in the UK or Europe. Also, government regulations could create blocks that will make this project hard.
Examples of Projects which are Feasible
1. A PC Game (Like Grand Theft Auto) whose location is set in a particular location in India – This project is feasible because of its already existing competition i.e. from GTA 1 to GTA 5. This proves that the game is technically feasible. Further, it is a digital product that can be uploaded on various game storage websites and making it available to download, therefore it is economically feasible. The project also supports operational feasibility in terms of fixing bugs and releasing title updates and patches regularly which keeps the game away from errors and crashes. Further, the project supports Schedule feasibility because existing games have been released in a timely manner and maintained the interest of gamers to download and play them. The project is also legally feasible by representing age restriction and mentioning that it is for people above 18 years of age.
2. A Necklace with Spy Camera – It is again technically feasible due to the availability of resources for making it like a necklace, mini camera sensor supporting WiFi, some shouldering tools, server access, etc. It is economically feasible because one can purchase it. Though it is expensive one can purchase it.
Feasibility is a relative term. This means for a project, will not be feasible in the current time but can become feasible in the future. For example, smartphones, which seems not feasible in the 1990s. Because we used to rely on landlines and button phones, so we could not imagine that this phone in the future will have the ability to provide internet surfing, television-like services, school books, ticket booking services, etc. But things happened in the 2010s!!!