Module 1

Introduction to Feasibility Study and Preparation of an Introduction

This module will help students learn the nature and purposes, and benefits of
feasibility studies and distinguish between a feasibility study and a business plan.
Furthermore, this will help them know how to start with a feasibility study, search, and
generate business ideas for a feasibility study. Additionally, this will serve as a tool in
learning how to prepare an introduction of a feasibility study such as the background of
the study, objectives of the study, significance of the study, scope, and limitations, and
definition of terms.

Objectives:
The students shall be able to:
1. Discuss the nature and purpose of feasibility study
2. Generate and refine ideas with free of gender-biases and transform into a
business potential;
3. Explain the process of conducting a feasibility study;
4. Present two business opportunities in a title hearing;
5. Formulate research problem and objectives which observe gender fair language;
6. Determine the beneficiaries of a feasibility study;
7. Identify and formulate the scope and limitations of a study;
8. Identify the terms to be defined in the study and know how to define the
terms conceptually and operationally; and
9. Identify the research methodology applicable for the a particularly feasibility study

 The Nature and Purpose of Feasibility Study

A. Nature of Feasibility Study

Business Feasibility Study is a process for identifying problems and

opportunities, determining, objectives, describing situations, defining successful
outcomes and assessing the range of costs and benefits associated with several
alternatives for solving a problem.

The Business Feasibility Study is used to support the decision making process
based on a cost benefit analysis of the actual business project viability.

The Feasibility study is conducted during the deliberation phase of the business
development cycle prior to commencement of a formal Business Plan.

The project feasibility study is a thorough and systematic analysis of all factors
that affect the possibility of success of proposed undertaking. This data, facts and
other findings presented in the study then become the basis for deciding whether
the project is to be pursued, abandoned, or revised.

The project feasibility study is really a synthesis of separate studies usually

dealing with the market technical, financial, socio-economic, and management
aspects of the project.
 Literally, a feasibility study is a fact-finding stage on whether some ideas will
work or not, if there exists a sizeable market for the proposed product/service, and
what will be the investment requirement and where to get the funding form. It also
finds out whether the necessary technical know-how to convert the idea into a
tangible product may be available, the likely damage caused by the
business/product to the environment, if the cost to restore the environment
damage is within acceptable limits and so on.

A feasibility study looks at the viability of an idea with an emphasis on

identifying potential problems and attempts to answer one main question: Will the
idea work and should you proceed with it? “Feasibility studies can be used in many
ways but primarily focus on proposed business ventures. Any person who would
like to open a business should contact a feasibility study to determine the viability
of his business idea before proceeding with the development of a business.” It will
help you through the process and help you get
the most out of your ideas. It is a one -step business idea assessment and
business development process.

A feasibility study is usually conducted after procedures have discussed a series

of business ideas or scenarios. The feasibility study helps to “frame” and “fresh out”
specific business scenarios so they can be studied in depth. During this process the
number of business alternatives under consideration is usually quickly reduced.
During the feasibility process you may investigate a variety of ways of organizing the
business and positioning your product in the marketplace. It is like an exploratory
journey and you may take several paths before you reach your destination. Just
because the initial analysis is negative does not mean that the proposal does not
have a merit. Sometimes limitations or flaws in the proposal can be corrected.
Feasibility study in overall view is an assessment of the practicality of proposed
project.

A well-designed feasibility study should provide a historical background of the

business or project, a description of the product/service, accounting statements,
details of the operations and management, marketing research and policies,
financial data, legal requirements and tax obligations.

Generally, feasibility studies precede technical developments and project

implementations. It evaluates the project’s potential for success; therefore,
perceived objectivity is an important factor in the credibility of the study for
potential investors and lending institution like banks. It must therefore be
conducted to provide information upon which decisions can be based. It’s
important to look critically at your business idea when determining if it’s worth
investing your time and money.

A feasibility study then covers a particular aspect of a business that can help to
reveal if your idea has a good chance of success. In other words, a feasibility study
determines whether the business idea make sense.

A feasibility study is a process for making sound decisions and setting direction.
It is also a process which:
1. Is driven by research and analysis.
2. Usually involves some form of consultation with stakeholders, community, users,
 etc.
3. Uncertainty.
4. Very often involves basic modelling and testing of alternative concepts and
approaches.

B. Purpose and Importance of Feasibility Study

The primary purpose of a feasibility study is to seek answer whether to go or not
go with the business venture. It provides very useful information in the form of
verifiable data. Feasibility study could offer recommendations and suggestions to any
person who wants to engage in business.

The role which the project feasibility studies play in the development of nations
can not be over emphasized. With percussion on the social economic, cultural and
business sectors of society, a project feasibility study is an essential medium of
progress both as a means to initiate profitable projects for sectoral enhancement
and expansion and to evaluate actual project results.

As a consequence, feasibility studies pervade the entire life of projects, from

the time the latter are conceived by a proponent as an idea to the time they are
actually implemented and accomplished.

The following benefits show how important a feasibility study is:

1. The feasibility report will look at how a certain proposal can work on a long-
term basis or endure financial risks that may come.
2. It is also helpful in recognizing potential cash flow.
3. It helps planners focus on the project and narrow down the possibilities.
4. Can provide reasons not to pursue the said project or proposal.
5. When it comes to operational aspects, the analysis determines whether the
plan has the necessary resources for it to be practicable.
6. One can have knowledge on the trends because a feasibility study looks at the
present-day market and studies the anticipated growth of your target business
sector.
7. It will help you to see if the idea is realistic and profitable.
8. Additionally, by doing a feasibility study you are taking the idea and moving it
to the next level.
9. It looks at just how viable an idea is.
10. It helps identify potential problems and helps you answer the question:
a. Will this work?
b. Should I go ahead with it?
c. Does it make sense form an economic and operational standpoint?
11. Feasibility studies form part of our market research.
12. It will provide an insight into the structure and nature of markets and measure
aspects such as market size, growth in the market, market sectors, market
shares, current supplier and their activities, barriers to entry, market gaps,
satisfaction with current
suppliers, likelihood of switching suppliers, opportunities and threats
trends in the market and other aspects.
13. If the results of the feasibility study show the new project is economically
viable the next step is to develop a business plan.

 FEASIBILITY STUDY vs BUSINESS PLAN

 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 an
initial business idea. The business plan the fully describes the business and its
financial projections. (Evangeline Marzec, studio).

Here are some of those differences between feasibility study and business plan:
1. Feasibility studies answer the question, “Will this work?” A business plan
answers the question, “How will this work?”
2. Feasibility studies are for the entrepreneur’s benefit, to determine whether it’s
worth proceeding with the business. Business plan are targeted at investors,
lenders and future executives to explain how the business work.
3. Feasibility studies focus on the size of the potential market, availability and
prices of suppliers and distributors, and the abilities of the entrepreneur.
Business plans also include operations plans, marketing strategies, location,
management team and
in-depth financial projections.
4. Feasibility studies usually compare several possible scenarios for how a
business might work. Business plans describe a specific business, but include
different sections depending on which parts of the business are interesting to
the audience.
5. A business will probably fail if it’s feasibility study is done poorly the first time.
Business plan, however, will go through many iterations and are designed to
evolve to describe an ongoing business.

 Methods for generating business ideas:

1. Unanticipated means – you find business ideas without serious effort. Included
in this means are the following:
a. The person’s work;
b. The person’s hobbies;
c. The person’s acquaintances; and
d. A chance event encountered by the person

2. Deliberate search – this type of idea generation includes:

a. Using search questions – examples of search questions are:
- How can this product be made differently?
- What will motivate the consumers to buy my product instead of the
competitor’s product?
b. Idea prompting - encounters with someone else’s idea, or a customer
request, or some event may provide hints or cues leading to business ideas.

Search for business ideas:

1. Search in google : DTI-TPG Go Lokal Program - MSME Market Access Platform
2.Click: Start and Grow Your Business
3. Click: Business Ideas

 How to Get Started

Doing a feasible study is really difficult especially for beginners like business
students. Getting started is a decision that requires an in depth analysis. Choosing a
topic is much more difficult especially if you don’t know how to start. A lot of things
come to your mind like how can you do it? And what are the things to do? Although the
specific question you will have to address will vary depending upon the nature of your
project or idea, there are some basic steps that apply to all feasibility studies.

Here are some tips which could be beneficial for beginners:

1. Conduct a preliminary analysis
In order to know if you need to do a feasibility study, you need to do a pre-
feasibility study. This will help researchers to determine if you need to proceed
with a full-blown investigation.

2. Consider your options

Completing a thorough feasibility study is a time consuming and sometime
expensive process. Thus, you want to try to save your time and money for
investigating only the most promising of ideas.

3. Begin to assess the demand for your idea

Before you decide to invest the time and money into a complete feasibility
study, you need to realistically assess whether or not there is a need or demand for
your idea. If there is, then you can proceed to study the idea more in-depth. If not,
then you can move on to your next idea.

4. Assess the competition

You need to get an idea of how much competition you’ll be up against. Perhaps
you’ve determined that there is in fact a demand for your idea or services. For
example, even if your town has an active farmers’ market, if there are ten other
vendors who are selling their homemade jams, jellies, and spreads, you’re going to
have to think about whether or not you’ll be able to compete or offer consumers a
different, more appealing product.

5. Begin to assess the challenges

You should consider whether or not there will be any insurmountable obstacles
before you move on to the active stages of feasibility study. For example, if you have
a pet that comes into your home at any time of the day, you cannot manufacture
food for sale in your home. You will thus need to prepare your jam in a separate
structure. If there’s no way you’ll be able to meet this requirement come up with the
necessary funds, or tackle the associated remodeling, then it’s probably best to put
this idea on the back burner for now.

6. Decide if you should hire an expert consultant/adviser

It could be helpful to hire a consultant/adviser to manage and conduct your
feasibility study if your initial investigation suggests that it look like you have an idea
that may be successful. Thoroughly research your need for expert’s consultations,
and learn what their fees will be. You will either need to make sure to budget
enough to cover these costs, or if the cost is too high even at this stage, you may not
want or be able to continue with the study. Whether you do it yourself or hire
someone to do it, always know that it is very important and a necessary ingredient
for any successful idea, concept or venture to thrive.
7. Self time-table
Performing a feasibility study can be a demanding process, and can easily take
up a lot of time. If your initial analysis has indicated that you’re sitting on a good
idea and that you need to complete a more detailed study, you’ll want to make sure
that you can get the job done in the right and timely manner.
 Time table for completing the feasibility study

A timetable of projected activities to be undertaken b the researcher in every stage f

research writing is also important. Target deadlines set for the completion of various
areas of feasibility research study provide necessary reminders for the researcher and
motivate him/her to finish the feasibility study research within the given time frame.

Preparing the Introduction

The introduction part of the feasibility study should outline the importance and
advantages of the study. Explain your project fully in this section. Outline briefly how
the project will be rolled out, how you plan to benefit from the project and the
processes that will be involved. The main purpose of the introduction is to provide
the necessary background or context for the study. The introduction typically begins
with a general statement of the description of the study, with a focus on a specific
problem, to be followed by the rational or justification for the proposed study.

 Background of the Study

The section includes the setting of the description of the project study. The
presentation and discussion should be directed into what the study is all about. It can
include studies and literature which can strengthen the reason for conducting the
feasibility study. The flow of discussion should naturally lead to the presentation of
the project description, which will briefly express the need to undertake the
feasibility study.

A short description of the project, information about the firm’s goals and
objectives, nature of the business, its size and location, plans and programs that will
be implemented ad the significance of the project.

Some feasibility reports may require some background discussion in order to

make the rest of the report meaningful to the readers. This portion describes your
proposed plan in sufficient detail stating if it worked elsewhere and how it was
implemented. You need to discuss the problem, need, or opportunity that has
brought about this report.

 Objectives of the Study/Statement of the Problem

The objectives states what the researcher intends to achieve or accomplish in the
feasibility study. These objectives can be categorized as general objectives and specific
objectives. The general objective is the main purpose or goal of the feasibility study.
The specific objectives are short-term and mostly narrow in nature. They are
formulated to achieve the general objective of the feasibility study. Specifically, the
specific objectives might be financial, marketing, operational or production,
management or organizational goals. All these objectives have the sole purpose to
achieve the overall goal or general objective of determining the viability of a certain
project or business.
The specific and general objectives of the study should be focused on the
various aspects of a project. The objectives of the feasibility study should give
emphasis on determining the extent to which the project meets the firm’s goals and
objective efficiently and effectively.
 Your goals and objectives should be tied to your mission and vision or value
of statement. Ensure goals andare goals or targets of a feasibility study that can be
described in monetary terms This will provide you with a plan to follow and the ability
to recognize the point where you achieve success. It is not necessary to set goals for
every facet of your business venture, but it is important to focus on key elements
important to your project. You should write small introduction describing the project
and client’s instruction. Objectives of the study should describe the intent and who
commissioned the study and for what purpose. You should also write about the
information source.

Financial objectives are goals or targets of a feasibility study that can be

described in monetary terms. This means that financial objectives affect the financial
income, assets, liabilities, equity and cash flow of the feasibility study. In other
words, the goals have a direct or indirect effect on the financial statements including
income statement, balance sheet and cash flow statement of the feasibility study.

Marketing objectives are goals or targets set by a project to promote its

products or services to certain customers or stakeholders in a given period of time. In
other words, marketing objective provides the promotional or advertisement
strategy to attain the project or feasibility study objectives.

Technical objective refers to goals or targets to execution or implementation of

the main purpose of the feasibility study. It refers to targets on the daily execution of
the project or feasibility study. In addition, it focuses on the producing goods or services
in a specific project.

Organizational and managerial objectives provide targets about the mission and
vision of the feasibility study. These objectives provide the direction of the project and
therefore they are critical for the success of the project. Furthermore, these objectives
state the form of business, organizational structure and management of human
resources during the execution of the feasibility study.

Socio-Economic objectives include the contribution of the proposed project to

the community and the local economy.

 Scope and Limitation

This section provides the coverage and the boundaries of the feasibility study.
It refers to the parameters and the areas the feasibility study will explore and
investigate. This includes the location to conduct the investigation and the time
framework to complete the feasibility study. Moreover, the scope and limitation
provides the type of information to be included in the study. At the same time, the
limitations might include
In brief and concise form, the scope of the investigation defines where
and when the study will be conducted and who will be the subject of the study.
The scope sets the limitations and establishes the boundaries of the study.

 Significance of the Study

The significance of the study provides the benefits of the study to different
parties and stakeholders. In other words, the significance provides an explanation on
how the study will be advantageous to various beneficiaries especially the society. The
following issues are important in writing the significance of the study.
1. The significance of the study provides the contribution of the problem or broad
problem in education and knowledge in general.
2. The significance of the study will illuminate the contribution to the current
literature.

 Definition of Terms
For better understanding of the feasibility study, the conceptual and
operational terminologies used should be clearly defined according to how these
terms are used in the project study. These are terms found in the title of the study
and in the statement of the problem.
Conceptual definition means that the terms are defined according to a
literature from books or journals. While operational definition means the terms
are defined according how they are used in the feasibility study.

 Research Methodology

It is a critical part of the project study as it determines how the researcher will obtain
information or data needed to for investigation. This methodical issue will raise and answer
the project feasibility proposal under the analysis of the market, technical, management, and
financial aspects of feasibility study.
Another components of methodology is the tools and techniques to be used in
gathering information that will be adopted in order to make market technical and financial
projections. It also includes the tools for quantitative and qualitative data analysis.

The methodology provides the specific procedures or techniques applied to collect and
analyze the data of the study. This methodology permits the reader to critically analyze the
authenticity of the research results or findings. To authenticate the research results
involves determining the validity and reliability of the survey or questionnaire, methods of
collecting data and the analysis and interpretation of the study.

This section provides sources of data used in the study. This includes the use of primary
and secondary data. The methodology includes the research design, sampling procedures,
and treatment of data.

Research Design
Descriptive

Research Locale

This portion of the chapter on writing the Feasibility contains a description of the place
were the respondents are to be obtained. Research locale is part of your study where you
state the place where you will conduct your research. As a term implies to a specific area
and/or subject that is being studied in a research/feasibility study. This locale can be
supplemented by a google map.

Planning your feasibility study is the most important part of the whole research
process. You need to carefully devise a number of questions and aims that you re attempting
to seek. The research locale is vital in this process because you need to make decision on
what specific subject or area you are researching and what location you are going to be
conducted it in.
 The world locale simply means a place or area; you see the word when you are talking
about events or actions connected to the place. So a research locale is simply the place
where the research takes place. (Amanda Wells, 2014). This portion of this chapter contains
a description of the place where the respondents are to be contained.

Respondents

Samples and Sampling Techniques

For a study produce a valid reliable result, sufficient representatives of samples,
and appropriate sampling techniques should be adopted. Sampling is the process
of getting a representative part of the population being studied. A representative
of the sample is determined in a manner that the characteristics, properties and
variations are reflected.
Bradfield et al (1980) define “sampling” as the process of measuring a small
portion of something followed by a general statement about the whole thing. A
Sample is any
sub-aggregated drawn from the population (Fergusuon, 1976). Ary et al, defines
sampling as a process involving the taking part of the population. It is pointed out
that the good sampling is a effective mean in reducing the number of person
contacted to get a relatively accurate picture of the sample population’s attitude and
opinion (Orth, 1976)

A population refers to a group t which an investigator would like the result to

be generalized. Hence, it is larger group about which a generalization is made
(Gay, 1976). It also refers to “all members of any well-defined class of people,
events or objects” (Kerlingen, 1973).

A sample is a small group taken from a larger population composed of

members being studied. A good sample size should be adequate in size to be
reliable. If all members of the population have an equal chance of being selected,
then the sample is a representative of the population.

Slovin (1960) presents a formula to determine the size of a sample as follows:

Where: n = sample size

N = Population size
E = Desired margin of error

Example:
There are basically two types of sampling naming:

A. Probability sampling

A probability sampling is a type of sampling where-In the selection of samples is

done with the members of the population having equal chance to be selected as a
part of the representative sample. It is further classified into the following groups:

 Simple random sampling

In this type of sampling, every member of the population has an equal chance
of being chosen to be included in the sample. T is the simplest probability sampling
which is usually done by using lottery or raffle method in a box and draw them to
get the representatives samples of the population. This method is easily done by
listing all the names of the members of the population from the first to the last
member. Write their individual members in a small pieces of paper, the place these
in the box and draw them after shaking the box very well until the total sample is
withdrawn.

 Stratified random sampling

It is the selection of samples from the different classes or strata of the

population involved in the research. Each class is treated as a different
population. A simple random sampling is then used in each class with
proportionate and equal percentage of representation from each stratum.

An example is when a study is conducted with high school teachers as

respondents.
The different classes that can be made are based in the group they belong
whether private or public, the sex and the year level they are teaching. If the
sample to betaken through random sampling is 10% and there are 1000
teachers from public high schools, the sample size of public school school
teachers is 100(10% of 1000). If there are 2000 teachers from private schools,
the 10% of 2000 which is 200, is the size of the sample form private schools.
Also, if there are 1300 female and there are 700 male teachers in the sex
stratum, sample size is taken at 10% for each class. Therefore, 10% of 1300
which is 130, are samples that are female and 10% of 700 which is 70 as
samples that are male, and so on

 Systematic sampling

This technique of sampling involves the selection of the desired number size in
a list by arranging them systematically or logically in either alphabetical
arrangement or any acceptable organization. If for example the population size is
1000 and 20% of this is the sample size, the total sample size is 200. If we want to
select this 200 using systematic sampling technique, we must list down the member
of the population in a systematically or logically arranged manner. If 100% is
divided by 20% the answer is 5. So the sample size is taken in a way that the first 5
in the list of the 20 is taken. Then the next five after the next 20 and so on until the
desired sample size, which is 200, is taken .
 Cluster sampling

This sampling technique involves the selection of the samples in a group and is
usually applied in a geographical basis in a heterogenous population. An example of
this is selecting a representatives sample size of teachers from different regions
/cities in Metro Manila in which are involved in a study.

B. Non-Probability Sampling

This type of sampling wherein no system of selection is employed and the smaples
may not be a proportion of the population and may depend upon the situation.
Samples are taken out of judgement and are not derived through procedure taht will
guarantee equal chances of representations, hence, this is also called non-random
sampling. It is further classified into the following types:

 Purposive sampling

This is otherwise called deliberate sampling. In this design, the respondents are
selected based on the judgement of who best qualify the objectives of the study. For
example, a researcher is interested in finding out the student’s perception of the
performance of the school officials in a college/university. Instead of conducting a
random sampling, the researcher can just involve purposely the student leaders as
respondents.

 Quota sampling

This method involves the taking of the desired number of respondents with the
required characteristics proportionate to the population under study. An example is
when a researcher would like to document the experience of male and female
teachers involved in the study.

 Convenience or Accidental sampling

This sampling technique involves the conduct of a study wherein respondents

are selected based on the convenience of the researcher. If an investigator would
conduct a study among some Metro-Manila residents to find out the pros and cons
on the implementation of the anti-drug campaign by the government, he/she may
use interviews to gather data. He/she can just stay in one place and ask anyone
whom he meets on the issue. This conduct of research uses convenience sampling.

Research Instrument

Instrumentation is the process of constructing research instrument that could be

used appropriately in gathering data on the study. Te questionnaire, interview
and observation are the most commonly used tools in gathering data.
C. The questionnaire

The questionnaire is a set orderly arranged questions carefully prepared to

answer the specific problems of the study. In doing feasibility study, the
questionnaire must answer all information needed by the researcher. Webster
Dictionary defines the word “questionnaire” as a list of questionnaire to be
answered by a group of people especially designed to get facts or information. It is a
list of written questions related to a particular topic, provided with space for
respondents to fill-up (Good, 2005).

Type of questions

There are two (2) types of questions that could be used in the preparation of a
questionnaire, namely:

1. Open-ended question

The question are listed in a way that it allows the respondents to freely express
himself on the subject or issue. It does not enumerate alternative responses.

Example:
How are you affected by the change of your school

leadership? What do you suggest on how to improve the

quality of our product?

2. Close-ended question

This is otherwise called the fixed alternative question which provide a list of choices
among enumerated alternatives. Hence, the subject responses are limited to a
specific alternatives.

Example:
How are you affected by the change of your school leadership? (please check)

A little
Very much
Extremely
Not at all

What do you suggest on how to improve the quality of our product?(Please check)

Make variety of flavors

Have more designs
Different size
Improve the packaging
 Preparation of the Questionnaire

Feasibility topic will be very useful in the preparation of the questionnaire. Once
a topic for study has been decided and approved by the appropriate body, the
formulation of specific questions follows. Try to examine the questionnaire used in
some feasibility studies similar to your approved topic. They can serve as a guide in
the formulation of your question in the questionnaire. You may also talk to people
who are knowledgeable in the construction of a questionnaire.

Draft your questions and after its completion finalize and submit the
questionnaire for comments and suggestions for improvement to your adviser or to
anyone who is knowledgeable on the preparation of a questionnaire for editing.

Find time to rewrite the questionnaire, taking into consideration the

corrections and suggestions.

Test for reliability, effectiveness and validity of your questionnaire through dry-
run ad taking into consideration the clarity of the items, vagueness of statements,
time element in answering the questions, convenience in tabulating the answer,
difficulties and other related problems

A dry-run is done to a group composed of at least twenty (20) member, of the

same characteristics as the respondents of your study. If for example your
respondents are school teachers of the district of Muntinlupa, your questionnaire
can be administered for dry-run to some 20-30 teachers of the District of Muntinlupa

The tabulation of the results of dry-run should be done to find out as to

whether the answer being tabulated provide significant solutions to the specific
questions of the study.

This may also provide an idea of how to improve the questionnaire to make the
tabulation of result easy and enable the researcher to tabulate the responses
satisfactory.

References
Calayag, E.H. & Valenzuela, E.E. (2019). Feasibility Study Guidelines for Undergraduate
Courses. Great Books Trading.
Flores, M. F. (2016). Methods in Business Research Education. Unlimited Books Library
Services & Publishing Inc.
Masanja, N.W. (2020). A Practical Guide in Writing a Feasibility
Study.https://www.researchgate.net/publication/341134813