What Is a Product Feasibility Report?

A product feasibility study is a market research approach that tries to give predictive analytics to guide future marketing, sales, and product development processes. This sort of market research frequently seeks information on product placement, identifying the target market, marketing and advertising, competition, and price tactics. Depending on your company’s demands and specifications, the Feasibility Study Report may additionally cover a number of secondary purposes. This significantly helps project management to avoid the chances of lapses and ensures that factors going into the production of the goods are feasible. For additional reference, a product feasibility report sample is available for your use.

Benefits of Conducting a Product Feasibility Study

As part of your project management, you will need to conduct a study prior to the full integration of its production within your business. Not only would you not want the product to fail in a certain market but you also would not want your company to lose a large amount of money and not earn anything in return. To distinguish and be able to spot the product feasibility report benefits, you will need to write the study first. This curated list will show you the advantages that you will obtain from dedicating the time and effort to writing out a product-centered feasibility study.

Benefits Evaluation: Although you can start and finish a project, this does not imply you should do it without any assistance from any form of document. A lucrative project may deplete your resources in other areas or limit your capacity to pursue another project with a higher return on investment. Project feasibility studies indicate the risk or reward benefit, opportunity costs, and total return. A feasibility study is usually advantageous to a project since it provides a clearer image of the planned project. For example, one of the primary advantages of doing a feasibility study is that it improves project team concentration.Ability to Perfectly Time Production: A job that is possible to complete in the spring may generate tremendous stress for your company if attempted in the winter. According to the Corporate Finance Institute, or CFI, this all depends on your manpower, manufacturing capacity, supply chain, Cash Flow, and financing alternatives. Whether a feasibility study does not account for the time of year the project will take place, re-evaluate the research to see if the expected outcomes will alter based on when you start the project. It is important to know if a product is feasible and marketable for one particular season otherwise it may end up being a deficit for your company.Cash Flow Projection: A cash flow prediction helps a business owner to anticipate a cash shortage and make the required modifications to keep the firm functioning smoothly. You may need to postpone a project until you have enough funds on hand to support the endeavor. You may have excellent sales in January, but if you give creditors 90-day terms, you won’t be able to spend the money from those sales until April. Include cash flow factors in every feasibility study to guarantee that you can appropriately fund a project that appears to be a go.Supply Chain Management: A seemingly simple endeavor may place undue strain on one or more parts of your company, inflicting more harm than benefit to your whole business. For example, while releasing a new product may appear profitable on paper, it may need extensive marketing strategy and execution. If your marketing team is already overburdened, you will have to transfer their attention away from more profitable endeavors or tolerate a less-than-optimal effort on your new launch. Producing and selling a product or service can put a strain on your manufacturing, billing, sales, warehousing, and shipping departments.Analysis of Labor: A good feasibility study considers the quality of your workforce rather than the quantity. For example, an Internet company’s graphic artists may have plenty of time to assist the company in launching a print magazine. Still, these artists may not be trained to create a publication grid, understand print typography, or know how to create magazine sections such as departments, columns, and feature wells. A sales staff that depends on high-volume making phone calls and a sales-oriented technique may not be equipped to market a new service that needs consultative selling. It goes without saying that considering the Workforce involved in the production process also plays a huge role.

Other Types of Feasibility Studies

When it comes to researching the feasibility of a certain issue, a product feasibility study is not the only topic. Projects are also possible to be focused on for these types of investigations. Feasibility Analysis is an analytical program in which the project manager determines the project success ratio. Through feasibility analysis, the project manager can assess if the project will be valuable to us or not and how long it will take to finish. A feasibility study enables the project manager to identify all of the project’s good and negative aspects.

Technical Feasibility Study: The technical feasibility of the project considers the engineering feasibility. Civil, structural, and other relevant elements are given as key engineering components necessary for project design. The expected technologies’ technical capacity, as well as the project staff’s competencies, are considered. By doing so productivity gain (or loss) and other ramifications are recognized owing to the variations in fuel supply, location, terrain, infrastructural support, and other challenges.Managerial Feasibility Study: Certain critical components, such as employee participation, demonstrated management availability and capacity, and commitment, determine managerial feasibility. This feasibility addresses the project’s administrative and organizational structure, ensuring that the proponent’s structure described in the submission is viable for the type of operation done.Economic Feasibility Study: Economic feasibility refers to the project’s ability to provide economic advantages. A benefit-cost analysis is needed. Furthermore, the breakeven analysis may be used to assess a project’s economic viability. To offer a uniform foundation for evaluation, the tangible and intangible features of a project must be transformed into economic terms. Even if the idea is not for profit, economic feasibility is crucial.Financial Feasibility: Economic feasibility must be distinguished from financial feasibility. The financial feasibility considers the project management’s capacity to raise the necessary finances to carry out the planned Project. On many occasions, project proponents investigate additional investors and alternative sources of funding for their initiatives. The viability, origins, soundness, and uses of these project funding may be a hurdle in such cases. Other variables of financial feasibility, such as creditworthiness, loan availability, equity, and loan timeline, should be considered if applicable. The financial feasibility analysis also considers the consequences of inland property purchases, leases, and other estates.Environmental Feasibility Study: The environmental factor is critical in determining whether a new project will succeed or fail. This should be considered at the very early phases of the project. All environmental problems highlighted or projected should be addressed in environmental feasibility so that appropriate steps may be made to solve relevant environmental issues. This section should also cover the project’s capacity to obtain the necessary permissions, licenses, and approvals on schedule and at a fair cost.

How to Write a Product Feasibility Report

One of the most critical tasks in launching a business is to undertake a feasibility study. This research will assist you in determining whether your company concept is viable and has the potential to succeed. When performing a feasibility study, several elements must be examined, including the marketability of your product or service, the competition, your company’s financial health, and others. The results of your project feasibility study are gathered in a product feasibility report format in which the product feasibility report contents are enumerated and further given elaboration below.

1. State the Executive Summary

The Executive Summary should not deviate from the information that comes after it. It’s a recap, not a forum for fresh ideas. Determine the requirement or condition and demonstrate to the target audience that it needs attention. Once in place, it is vital to provide a solution and show its value. Make a clear and solid recommendation. Justify your position. Make a list of the main reasons why your product is potentially ready for manufacturing.

2. Define the Product

Not all readers of your report would be aware of what particular product you are discussing within the Report. You may have introduced the product within your executive summary but that may not be enough to talk more about the product. Let your readers know why this particular product is to be sold and discuss its observed necessity with factual information and research as opposed to personal comments that the board or higher-ups may not consider as substantial reasoning.

3. Marketability

If there is a demand for the goods, they will sell. Before there is a product, there must be a necessity for it: it must be marketable. That is the first stage in developing an intelligent product. Moving forward without regard for the end user places you back in the domain of art, which is not where you belong. In an essential section of your report, you must be able to identify whether or not the product itself is viable in the industry you are placed in. If your clothing company is planning to sell coats and jackets, plan it before the start of winter.

4. Marketing Strategy

A Marketing Strategy is a company’s overall strategic plan for reaching out to prospective customers and converting them into clients of their products or services. A marketing strategy incorporates the organization’s value proposition, key brand messages, information on target customer demographics, and other extreme characteristics. For this section, you will need to think of the way you will be advertising and delivering to the audience the usability of your product. Whether it is a new type of kitchen sponge or a bathroom cleanser, plot some ideas of how you will go about the promotion.

5. Workforce Consideration

The length it takes to manufacture and reach a complete state of your product will take a while, depending on the parts, assembly process, or overall procedure towards it. Locally-sourced and handstitched designer bags will take a significant amount of time as it will solely depend on the hands working on its manufacturing in contrast to mass-produced products like high fashion companies which could produce more items in a shorter amount of time. You will need to consider the people, machinery, and other factors involved in the production of the product.

6. Financial Projections

A financial prediction predicts future income and costs. Internal or historical data, as well as a prediction of external market circumstances, will be used in the projection. The prediction is crucial to both the business owner and possible investors since it predicts whether or not the company will develop and become profitable. This is saved for the last step because you will need to account for all the other sections in whether or not the worth of their inclusion is viable to sustain the development of the Product.

FAQs

What are the steps in a feasibility study?

A preliminary analysis is the first step in doing a feasibility assessment. Interviews with stakeholders are performed, market research is undertaken, and a business strategy is created. All of this data is examined in order to make an initial approved or not approved judgment. If everything seems good, the actual research can begin. This contains a list of technological concerns, a market analysis, a description of the marketing strategy, and an outline of the required human resources, Project Timeline, and funding. This process would eventually lead to the product feasibility report analysis which is an important aspect of assessing whether the product is viable to earn a steady income for the company.

Why are new product feasibility studies important?

Organizations must determine who will buy the thing with new product failure rates. As a result, corporations perform a new product feasibility study to demonstrate demand for the new product and give data-driven suggestions for the next steps in the market entry process. Companies frequently set aside funds in their Budgets for new product development research in order to ensure the best potential return on investment. Another critical component is having a third-party market research firm undertake the new product feasibility assessment. This lowers bias in study design, data analysis, and recommendation creation.

What kind of data does a product feasibility study gather?

A new product feasibility study gathers data from both primary and secondary sources. Primary research is created specifically for the subject at hand. It gathers fresh data and information in order to achieve the study’s aims and objectives. This sort of study is unique and involves many moving pieces. Secondary research is the knowledge that already exists, as opposed to new material obtained through primary research. This research is frequently utilized in larger research efforts. The advantages of performing secondary research include the abundance of secondary data available; you only need to focus your search.

The product feasibility report and service will be most noticeable after new products are studied and their viability to last long out on the market. And whether or not you should push through with its production will be identified in the product feasibility report. Wanting to save your company from unnecessary expenses is normal and being wary of where your investment will go will help to keep your business from not pouring all your employees’ and fellow higher-ups efforts into a fruitless product. So what are you waiting for? Delve into the process and write one now!