You are up with a promising business idea and quite excited to turn that idea into a million-dollar business. But wait before you leap and evaluate the feasibility of your business idea before everything else. As per a report, startups actually need 2-3 times more time than the time estimated by the founders and this underestimation pressurizes them to scale up their companies pre-maturely.
According to a study, founders tend to overestimate the potential of their idea before testing the commercial need of the product by 255% due to which 50% of the startups fail in the first 4 years.
An integrated Feasibility study is a systematic process of evaluating the viability of a business idea by considering several factors relevant to the sustenance and growth of the business in the long term. It helps to access the pros and cons of a business idea and saves time and resources from going down the drain.
It could happen that you have done the thorough market research of your product/ service and found it to be commercially viable, but after launching your product/service you face technical problems like scarcity of raw material, presence of less skillful people in nearby locations to do the required job.
This situation could put you in a tight spot and can cost you your business. An integrated feasibility study determines the feasibility of the following factors: economic, market, technical, legal, and operational. As a founder, you need to analyze each feasibility factor in detail. You may also stumble upon another relevant business idea if your current idea does not seem to work.
Besides, giving a clear picture of the business idea, the feasibility study acts as a road map for the startup to conduct its activities in a strategic manner. Here are some key benefits of an integrated feasibility study:
Identify valid reasons to pursue a business idea: You analyze the strengths and weaknesses of your business idea through a feasibility study and have a realistic view of the success or failure of it. You know how your product and service will impact the lives of your targeted customers.
Mike McGee, Co-founder of Web Design School The Starter League believes that the best business ideas are those that offer a solution to an existing problem. The idea of Uber struck Travis Kalanick and Garrett Camp when they were unable to hire a cab on a winter night in San Francisco.
Prevents the wastage of time and valuable resources: Launching a startup needs an inordinate amount of time, resources, and money. Testing the viability of a business idea at the very beginning prevents the wastage of all of the three and saves you from disappointment in the future.
Creation of resource and acquisition plan: The study will help you to chart out the resources required (human, capital, intangible assets, patents, and licenses) for the functioning of the startup and the ways to acquire them at an optimum cost. This further lets you pre-decide your funding requirements and the sources to approach for getting it.
Explores the value proposition of your product/ service: It is vital to know how your product/service would add value to the lives of your customers. A feasibility study gives both quantitative and qualitative analysis on the uniqueness of a product/service. It helps you to design your marketing strategies to convince the customers and to tailor-make it as per the evolving needs of the market.
Aids you to create an MVP: The extensive analysis of all the factors of a feasibility study provides all relevant information to create a complete prototype, describing all the product/service specifications, uses, and benefits. An MVP allows you to validate the idea of the product you plan to launch and gives you a chance to gather sample market review about the product.
Helps to create an efficient business plan: Once you have all the calculations, estimated projections and evaluations for the economic viability and sustainability of your business idea, it is easier for you to create the strategies, action plan, and control policies for the implementation of your business idea.
Attracts the attention of the investors: To make investors invest in your business, you need to convince them about the potential of your business idea. A feasibility study will explain the viability of your business idea from various prospects and helps the investors evaluate the growth and profitability of your business in the coming years.
Your business idea may seem truly remarkable and groundbreaking to you, but an integrated feasibility study will work as an evidential proof to justify its uniqueness and commercial viability.