Business Plan Vs. Feasibility Study
If you're considering starting a business, you'll need both a feasibility study and a business plan. Both documents should be written after conducting thorough research and critical thinking, and conveyed in formats that others can understand. That way, you can show both to people whose opinions you value as well as to those you hope will invest in your idea. Before you begin, it's important to define and distinguish between a feasibility study and a business plan.
Defining Both Terms
A feasibility study is done before starting a business, when you have the idea for the business but you want to make sure it's feasible, or advisable. Put another way, is it worth your time, effort and money to create this business? Several different professionals may contribute to the study, such as an accountant, entrepreneurs who have opened successful businesses, and Realtors who advise on the worth of the location and pricing, comparing similar businesses in the area.
More For You
How to write a business plan for starting a medical spa practice, what are the key elements of a business plan, what are the components of a global business plan, how to write a business plan for a food truck business, what is a dehydrated business plan.
A business plan details how the business will operate. It assumes your feasibility study has been completed and it was determined the idea is viable. Now you're going to spell out your financial and other objectives, the methods you plan to use to achieve them, and your proposed organizational structure.
Advertisement
Article continues below this ad
Consider the Similarities
Comparing the similarities between feasibility study and business plan is important because both are used in different ways to help you create a profitable business. Similarities between the two documents include:
Understand the Differences
It's equally important to understand the difference between feasibility study and business plan. They are not the same, and one cannot substitute for the other. Differences include:
- Methodology
Conducting a Feasibility Study
If you're doing the feasibility study yourself, conduct a complete competitive analysis considering the following:
- Product demand:
- Market conditions:
- Probability of Success
Writing a Business Plan
Writing a business plan may seem daunting, but if you take it step-by-step, it will come to fruition. The Small Business Administration advises that business plans should include the following:
- Executive Summary
- Company description
- Market analysis
- Organization or management:
- Service or product line
- Marketing and sales
- Funding request
- Financial projections
- MBN: Market Business News: What is a Feasibility Study? Definition and Examples
- Cleverism: How to Conduct a Feasibility Study the Right Way
- Entrepreneur: 7 Steps to a Perfectly Written Business Plan
- SBA: Write Your Business Plan
Barbara Bean-Mellinger is an award-winning writer in the Washington, DC area. She writes nationally for newspapers, magazines and websites on topics including careers, education, women, marketing, advertising and more. She holds a Bachelor of Science from the University of Pittsburgh.