Feasibility Studies: Measure Viability Before You Invest.
If you are considering manufacturing and launching a new product or products, it makes sense to conduct an in-depth feasibility study to get a true picture of the pros, cons and potential risks before you make a big investment. Feasibility studies objectively measure important factors to understand whether your ideas and concepts are viable; they help you answer the simple question, “Should I do it?” Missouri Enterprise’s Project Managers have the experience, resources and expertise you need to conduct a thorough feasibility study before you decide to manufacture a new product and take it to market.
5 Primary Components of a Feasibility Study.
1. Technical Analysis. A technical analysis takes an expert approach to determine any facility modifications, production capabilities and other needs necessary for a manufacturer to begin or significantly increase production of a given product or products. Analysis includes determining additional capital equipment needs and an assessment of available technologies, the suitability of commercially available equipment, management and operational requirements, labor and resource needs, expected capacities, material sourcing, and the costs associated with these factors.
2. Economic Analysis. It’s critical to ascertain the potential financial impact and ramifications of launching a new product or dramatically increasing production of an existing product. Costs to consider may include material sourcing, training or certifications required (such as ISO-9001), environmental impact and permitting, production and labor costs, shipping and logistics requirements, accurate cost-of-goods sold projections and other factors critical to realizing a positive return on your investment.
3. Market Analysis. Before you launch a new product, you need to examine the markets where products like yours might be sold so you understand what it will take to compete in those markets. A detailed market analysis will also guide your Marketing Plan development. Key components of a market analysis include:
- Competitor Analysis.
- Leading brands.
- Marketing strategies.
- Target Market Size and Trends.
- Pricing and Product Positioning.
- Shipping and Logistics.
- Other Factors.
- Competitor Analysis.
4. Organizational / Management Analysis. Examine and assess the organizational and management structure of the organization, determine the availability of additional human resources necessary to operate the business successfully, financial requirements related to the growth of the organizational structure, key performance indicators (KPIs) and risks.
5. Financial Analysis. Study and project first year operational costs and revenues to determine the viability of the venture including capital requirements, labor costs, material costs, cash flow statements and more. This analysis becomes a key part of your Business Plan.