What is the basic difference between feasibility study and business plan

Simply because of the sheer numbers in big cities you can make a lot more mistakes in your business than you can with a small town. For example, let's suppose you have a passion for oriental rugs. You are a legitimate expert on these rugs and want to open a shop to sell them. In a large city there may be enough customers in your selling area to make the store profitable.

What is the basic difference between feasibility study and business plan

Gumpert How to Really Create a Successful Business Plan Feasibility studies and business plans are identified in Chapter 4 as key steps to starting a cooperative. This section explains two vital issues: What is a Feasibility Study?

A feasibility study is designed to provide an overview of the primary issues related to a business idea. In other words, a feasibility study determines whether the business idea makes sense.

A thorough feasibility analysis provides a lot of information necessary for the business plan. This information provides the basis for the market section of the business plan. Because putting together a business plan is a significant investment of time and money, you want to make sure that there are no major roadblocks facing your business idea before you make that investment.

Identifying such roadblocks is the purpose of a feasibility study. A feasibility study looks at three major areas: For example, a feasibility study should not do in-depth long-term financial projections, but it should do a basic break-even analysis to see how much revenue would be necessary to meet your operating expenses.

The purpose of the business plan is to minimize the risk associated with a new business and maximize the chances of success through research and maximize the chances fo success through research and planning.

If the feasibility study indicates that your business idea is sound, the next step is a business plan. The business plan continues the analysis at a deeper and more complex level, building on the foundation created by the feasibility study. For example, the financial section of the plan would include pro forma estimated financial statements and years of financial projections.

A business plan gives you an opportunity to find any weaknesses and reveal any hidden problems ahead of time. It serves two purposes: The really important thing about this process is that it forces you to think. A business plan is sometimes described as a document of your thought processes as you analyze your competition, the market, your operating expenses, management and staffing needs, manufacturing process, etc.

It forces you to clarify your goals and objectives.

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The plan must be realistic and based on valid assumptions. After all, if you are closely involved in organizing this business, you probably have some emotional investment in it. It is easy for people in this position to overlook or minimize potential problems or hazards. Remember that planning, no matter how good it is, will never make a bad business idea feasible.

Each section below discusses the key questions which must be addressed in the plan. Market analysis begins by asking: What, precisely is the market?

what is the basic difference between feasibility study and business plan

The more specific you can be, the better. Is the market growing, shrinking, or staying the same? Is it worth your while? Osgood Basics of Successful Business Planning The purpose of market analysis is to thoroughly acquaint yourself with all aspects of your market so that you can formulate a plan to capture a share of it.

Market Analysis Research The key questions that should be answered in the Market Analysis section of the feasibility study are presented below.

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In nearly all cases, research is required in order to obtain enough information to answer the questions.

If these questions cannot be answered adequately, the project is not feasible.A feasibility study, or business opportunity analysis, is a planning tool similar to a business plan. The feasibility study is done to flesh out the possibilities in .

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what is the basic difference between feasibility study and business plan

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University of Wisconsin Center for Cooperatives - Chapter 5