What is a Feasibility Study

A feasibility study as an analytical tool used during the project planning process, shows how a business would operate under an explicitly stated set of assumptions. 

These assumptions include the technology used (the facilities, types of equipment, manufacturing process, etc.) and the financial aspects of the project (capital needs, volume, cost of goods, wages etc.). 

The feasibility study represents the first time in a project development process that the pieces are put together to see if they perform together to create a feasible concept, both technically and economically .

The feasibility study also shows the sensitivity of the business to changes in these basic assumptions.

 Feasibility studies contain standard technical and financial components, presented in more detail in a later section of this report, but the exact appearance of each study varies. This variation depends on the industry studied, the critical factors for that project, the methods chosen to conduct the feasibility study, and the budget of the study. 

Emphasis can be placed on various sections of an individual feasibility study depending on the needs and requirements of the group for whom the study was prepared. Since most studies have multiple potential uses, it is critical to design the study so that the material provided will serve the needs of all these.

The feasibility study provides an evaluation of the potential for success for a project. The perceived objectivity of the evaluation is an important factor in the credibility placed on the study by potential investors and financiers. Also, the creation of the study requires a strong grounding in both the financial and technical aspects of the project. For these and other reasons, persons from outside of the membership group or consultants conduct most feasibility studies.

Feasibility studies for a cooperatives are similar to that for any other type of business, with one important exception: member-users are concerned with having the cooperative be successful because that will help make their personal businesses more successful. Hence, feasibility studies must address the impacts of the project on members as well as the cooperative