Validate the best projects with a feasibility study

By Jennifer Montérémal & Coralie Petit

Published: November 12, 2024

Why rush headlong into your project when you can carry out a feasibility study?

A feasibility study is an invaluable tool for checking upstream whether your project is feasible and profitable, and therefore worth undertaking.

However, many project managers are still put off by the apparent complexity of a feasibility study. Apparently, yes, because in reality, method and rigor are all that's needed to carry out the exercise without too much difficulty.

So, how do you carry out a project study easily? This article takes you step-by-step through the 6 stages.

But first, a quick reminder of the definition and objectives of a feasibility study.

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What is a project feasibility study?

Definition of a feasibility study

A feasibility study is defined as a process designed to check whether or not a project is feasible, by analyzing various factors:

Economic and financial factors. Examine in advance the resources that will be deployed and the possible gains: this is how you determine whether the project will be profitable or not. As you can see, it's essential to examine this component!
Technological factors. What technology is already present in the organization? Will it be necessary to adapt it or acquire a new one?
Operational and organizational factors. What operational resources are available to you? Do you have all the necessary skills in-house, or will you need to recruit? Are general organization and processes appropriate?
Legal factors. Check whether you have to comply with any specific regulations, such as those on data protection.
Commercial factors. Identify market opportunities, future developments, potential customers and targets, etc. This is not unlike market research.

In the context of project management, all these points to be analyzed must be set against the need to meet deadlines and, of course, the quality of expected deliverables.

Finally, the feasibility study also includes elements relating to the project's objectives, as well as its development over time: it thus becomes a solid tool on which to base subsequent stages, such as planning.

When should a feasibility study be carried out?

If a feasibility study is intended to check whether a project is feasible or not, it should be carried out during the pre-project phase.

So, before embarking on a project, study the factors we've outlined above, otherwise you risk embarking on a project doomed to failure.

The 7 objectives of a feasibility study

Whatever the nature of your project (business start-up, launching a new product on the market, construction or architectural project, etc.), the objectives of a feasibility study are manifold:

determine the conditions and efforts required to ensure the project's success;
anticipate the risks and constraints to which the project will be subject;
identify the resources to be mobilized;
calculate the budget required and the ROI to be generated, in order to assess profitability;
study the various possible scenarios and select the best one;
provide the various stakeholders and teams with visibility on the conditions and stages of implementation;
ensure that the project ultimately meets its objectives.

In short, this study provides a detailed analysis of a project's technical and organizational feasibility, and above all its financial viability.

Indeed, if you realize at this stage that the project is not profitable, redefine its objectives and scope... or even postpone or abandon it.

Feasibility study: example table

The feasibility study generally involves the construction of a project file. But depending on the nature of the project, certain components can be included in a feasibility study table, outlining the various scenarios envisaged.

Here's an example of a feasibility study for an electric toothbrush project:

How do you carry out a feasibility study?

In principle, a feasibility study is carried out in several stages, enabling us to analyze the project as a whole, taking into account the following aspects:

SWOT analysis: strengths, weaknesses, opportunities and threats,
assessment of the market and its environment
definition of objectives,
identification of all positive and negative project scenarios (success and failure factors).

We'll come back to this in more detail right here. 👇

What are the 6 stages of a feasibility study?

Step 1: Identify precise objectives

A feasibility study will only be effective if the purpose of the project and the concrete benefits it will generate for the company are perfectly defined.

In this way, you'll be able to identify the means to be deployed to achieve your goal.

💡 For a more precise definition of your project's scope, consider the SMART method! Thanks to this method, you can rest assured that your objectives are solid, relevant and clear, because:

Specific,
Measurable,
Acceptable,
Realistic,
Temporally defined.

Step 2: Study the project environment

The success of a project depends on more than just internal factors (your resources, for example).

You'll also have to deal with external influences, both positive and negative. These may include

new market opportunities,
regulatory constraints,
technological innovations,
changing consumer habits, etc.

💡 We recommend using a PESTEL analysis. By examining the context:

Political,
economic,
Social,
Technological,
Ecological
and Legislative,

you get an overview of the environmental framework in which your project will evolve, so you can anticipate risks and seize opportunities.

Step 3: Determine needs and budget

What will it take to achieve your project objectives?

To find out, list all your needs:

material requirements:
- computer equipment,
- machines,
- tools, etc,
technical requirements:
- technical specifications,
- innovations, etc,
human resources:
- skills,
- training,
- subcontracting, etc,
production resources:
- raw materials,
- stock, etc,
marketing and communication needs:
- marketing campaigns,
- communication campaigns, etc.

Once all these elements have been listed, it's time to evaluate the associated costs. This will give you a budget estimate for your project.

Step 4: Calculate project ROI

What's the point of embarking on a project if it doesn't generate enough profit, or even worse, if you're working at a loss?

Therefore, the feasibility study involves calculating the ROI (return on investment).

Thanks to budget estimates and the identification of future business opportunities, you'll know..:

whether the project will benefit you,
and if so, how long it will take.

💡 Depending on the nature of the project, we advise you to proceed in two stages.

Make an initial estimate, in broad terms: this will ensure that you have the means to launch your project as you envisage it, before spending too much time on the feasibility study.
Next, calculate the ROI for each scenario. We'll come to this point now.

Step 5: Create several scenarios

Experts recommend that you create several scenarios to achieve your objectives. For example

an optimistic scenario,
a pessimistic scenario,
a neutral scenario.

⚠ ️ Each of these must be profitable, even the pessimistic scenario!

These different plans must be as detailed as possible, including all the elements likely to guide your decision-making:

financial tables to assess ROI,
project completion times,
the various stages involved,
resources to be deployed,
communication and marketing strategies, etc.

💡 The construction of the various scenarios can be based on a SWOT matrix (Strengths, Weaknesses, Opportunities and Threats). This is used to assess :

your project's strengths,
weaknesses,
opportunities,
and risks to consider.

🛠 As a manager, you can use project management software such as monday.com to get an overview of your work, list your project needs, build your scenarios and make the right decisions. With such a tool, you :

create and customize dashboards to sketch out your future projects (and check if they're viable),
obtain important information and a global overview of your work, thanks to clear , functional templates already set up,
determine the ROI you can derive from each scenario.

Step 6: Choose the ideal scenario and move on to the next steps

Once the feasibility study has been completed, it's time to choose the ideal scenario, taking into account all the elements analyzed and the advantages and disadvantages of each.

In this way, you'll be well prepared to move on to the next stage, i.e. the realization of the project itself.

☝️ What should I do with the scenarios I didn't choose? Well, simply put them aside. They can be used again for other projects, or for the current project if it needs to be readjusted along the way.