Basic Guide

to
a Feasibility Study
 Feasibility Study Format
Cover Page
Title page
Approval Sheet
Acknowledgement
Executive Summary
Table of Contents
List of tables
List of Figures
Chapter
 Chapters
1. Marketing Aspect
2. Technical Aspect
3. Organization & Management Aspect
4. Financial Aspect
5. Socio-Economic Aspect
 Marketing Aspect
This chapter will involve the study of the present and
future demand and supply for the product,
competition, selling prices and marketing plan for the
product.
 Marketing Aspect
What is the product?
How does it compare in quality and price with its competitors?
Where will be the business be located?
What geographical areas will be covered by the project?
Within the market area, to whom will the business sell its products?
Is it possible to estimate how much of the product is currently being sold?
What share or percent of this market can be captured by the business? Is there a
needed for a competing product such as that proposed by your team?
What are the related data for demand and market analysis? What are the sources
of your data?
What is the selling price of the product?
How much of the product will be sold?
What promotional measures will be used to sell the product?
What marketing strategy is needed to ensure that sales forecasts are achieved?
How much do you need to promote and distribute your product?
What are your sales volume projections over a period of 5 years?
 Marketing Aspect
(Format)

Product/Service Description
Target Market
Demand and Supply Analysis
Competitor Analysis
Pricing Structure
Projected Sales
Marketing Program/Startegies
Marketing/Selling Expenses
 Technical Aspect
The technical feasibility of the project consists of the:
(a) selection of the process, capacity and design, supplies,
location, layout, structures specifications and the raw
materials and its sources;
(b) determining the quantity and quality of the products to be
produced, labor needed, both skilled and unskilled, utilities
required, waste disposal method, and transportation
necessary;
(c) provides estimates of the total project cost and enumerating
the major items of the capital cost,
(d) detailed estimated production and overhead costs that will
go into operating the proposed project,
(e) consider any major technological development in the
industry which may affect the commercial or technical
soundness of the project.

 Technical Aspect
This chapter will answer the related guide questions on
the production process, plant capacity, plant location
and layout, structural specifications and other
operating requirements.
 Technical Aspect
What is the production process?
What buildings and machinery (fixed assets) are needed and what will be their
cost?
What is the useful life of the building and machinery?
How will maintenance be done and are spare parts available locally?
When and where can the machinery (assets) be obtained?
How much capacity will be used? What are the plans for using spare capacity?
When and how will the machinery be paid for?
Where will the factory be located and how will the factory be arranged?
How much raw materials are required?
How much will the raw materials cost?
What are the sources of raw materials? Are they available throughout the year?
How many direct and indirect labor are needed and what skills should they have?
What will be the cost of labor?
Are workers available throughout the year? If not, what effect will this have on
production?
How will the workers be motivated?
What factory overhead expenses are involved?
What is the production cost per unit?
 Technical Aspect
(Format)
Technical Requirement
Government Requirements (Permits)
Production/Operations Process
Production Schedule
Labor Requirement
Machinery/Equipment Requirement
Raw Materials Requirement
Plant/Factory Location
Plant Layout
Waste Disposal System
Quality Control System
Production Cost
 Organization &
Management Aspects
The objectives of this part of the study is to determine
the appropriate business organization, the people
who will be involved both before and during the
operating periods of the enterprise, and the functions.
 Organization &
Management Aspects
Described in this study are the following:
(a)Basic considerations in forming the organization,
(b)the type or form of business organization and
organizational structure within the enterprise,
(c) organizational chart,
(d)officers and key personnel and
(e) project schedule (Gantt Chart of Activities)
 Organization &
Management Aspects
How will the business be organized?
How will the business be managed and operated?
What is the business experience and qualifications
of the entrepreneur/Officers/Personnel?
What pre-operating expenses will be incurred?
What fixed assets will be required for the office?
What administrative cost will be incurred?
What pre-operating activities must be undertaken
before the business can operate? A Gant Chart
would be helpful in the presentation of the data.
 Organization &
Management Aspects
Legal Form of Business
Organizational Structure
Qualifications of Officers
Office Equipment
Gantt Chart of Activities
 Financial Aspects
This will include the determination of the financing
requirements, financing leverage as well as the
possible sources of financing.

In addition, the projected financial statements is to be

presented and thoroughly discussed to include the
presentation of the expected financial position,
profitability, cash needs and cash sources based on
the results of the study of the marketing, technical and
financing requirements.
 Financial Aspects
What are the basic financial assumptions? What is the total
capital investment requirement to include initial fixed investment
costs, pre-operating expenditures, minimum net working capital
requirement?
Is a loan needed? What are the terms and conditions of the
loan? What security (collateral) can be given to the bank? What
is the loan repayment schedule?
What will be the equity contribution of the entrepreneur(s)? And
how much?
What does the Statement of Financial Position indicate?
What does the Profit and Loss Statement indicate?
What does the Cash Flow Statement indicate?
What does the Changes in Equity indicate?
What indicators will be used in the financial analysis criteria?
What is the break- even point (BEP)? What do the related
financial ratios indicate? The analysis should make use of the
commercial profitability criteria.
 Financial Aspects
(Format)
Total Project Cost
Sources of Financing
Financial Assumptions
Projected Financial Statements
Financial Analysis
Schedules
 Socio-Economic Aspect
The study will cover the benefits to be obtained from
an undertaking in terms of its contribution to the
community, to other business firms and to the national
economy as a whole. The social benefits that may be
derived from a project could be in the nature of
employment generation, increased taxes paid to the
government, increased peso inflow into the local
community, etc.
 Socio-Economic Aspect
What are the related social benefits that the project can
provide? How many will be directly employed by the
project? How much additional purchasing power will be
generated from the project by the community?

Will project contribute to additional downstream

businesses which will rise from the project? What is the
projects contribution to the protection of the
environment?

How much will accrue to the government in terms of

income taxes, taxes, fees and licenses? How much will
the project contribute to the social fund (SSS, PhilHealth,
Pag-ibig) for the future need of the employees?
 Socio-Economic Aspect
(Format)
Customer
Community
Employment
Environment
Government
 References
Cabrera, Elenita M. (2014). Management Consultancy. Manila:
Conanan Bookstore.

Cooper, Donald R. and Schindler, Pamela S. (2011). Business Research

Methods. 11th edition. McGrawHill Philippines.

Development Academy of the Philippines. How To Develop Project

Feasibility Studies. 2012 reprint. Manila: Sinag-tala Publishers, Inc.

Ditablan, Eustaquio. Feasibilty Study Handbook. 2012 reprint. Manila:

National Bookstore.

School of Business and Management Education, Holy Cross of Davao

College. Feasibility Study Format