E-file your Income Tax Returns for FREE

E-file your Income Tax Returns for FREE

Feasibility Study

Reviewed by Sweta | Updated on Sep 30, 2020



A feasibility study refers to an assessment of the viability of a project. A study is undertaken on all the factors relevant to the project, such as legal, technical, economic, and operational aspects. Many project managers undertake a feasibility study to determine the advantages and disadvantages of carrying out a project. A feasibility study happens at the planning stage before investing time, money, and other resources into the project.

Understanding Feasibility Study

A feasibility study helps a company’s management evaluate the risks and returns associated with a project. The study provides with insights about the practical viability of a project. It helps in asking the right questions about manpower, tools, capital, and the technology required for a project. It also helps in calculating the rate of returns on investment in the project.

The purpose of a feasibility study is: 1. To make a note of all aspects of the project and resources required. 2. To identify the bottlenecks in the execution of the project. 3. To ascertain the practical feasibility of the project after an assessment of all the factors involved in the project.

An organisation looking to expand makes plans for various projects. It is important to undertake a feasibility study before venturing into a project. A feasibility study also helps in knowing the potential market for a product. Pursuant to a feasibility study, an organisation can organise the necessary resources, funds, and set a deadline.

The components of a feasibility study are: 1. A summary describing the outline of the project. 2. Marketplace information about the product or service and market strategies. 3. Resource planning, including tools, technology, manpower, money, and others. 4. Project scheduling describing the details of the timelines and completion dates. 5. Details of the project financing. 6. Recommendations after assessment of various factors involved in the project.


A feasibility study helps businesses to launch a new range of products or to penetrate rural markets. A company should also plan marketing strategies in addition to the feasibility study. The marketing strategies help in making financial forecasts and raising funds from investors for your business plans. A company should also have a contingency plan in place to provide for unforeseen events, which may delay or cause losses to the business.

Related Terms

Recent Terms