What Should Your Feasibility Study Include
The feasibility study is very aptly named because it really is meant to be a thorough investigation, or
study, that will help your organization to determine whether your business concept is feasible. The
feasibility should carry out the necessary research about the following:
1. Who is your customer (demographics etc.), what are you offering them exactly, and why do you
think they’d buy it?
2. Is the product a good fit for your organization’s mission, capacity, resources and strengths?
3. The proposed market. Research the market; size, how will you find them, characteristics, trends,
niche you will fill, and geographic considerations. This research should tell you that with the
right product, there are enough customers in your selling area to sustain your operations.
4. Your competition. Investigate who are they? What are they offering? What are the gaps in their
service and delivery? And what is so unique about you that customers will choose your product
over your competition?
5. What your operations will look like? Will you add staff? Will you need a facility? Materials? Etc.
Consider the impact that your mission delivery will have on your operations e.g. if you are
employing a population with barriers to employment, what is their capacity to deliver the
product and how will that affect your operations? When you look at industry standards for wage
costs, assume there will be variation for your organization. Use research with existing groups
doing similar work to inform you about adjustments/considerations you will need to make.
6. Scenario analysis: are you considering several alternative approaches to implementing your
business idea? Your feasibility study can help you choose the most promising scenario.
7. Revenue Generation: How will you let your market know you are there (sales and marketing)?
What human and material resources are required? This is critical; plan well.
8. Financials: You will need to plan financials for both start up and operations. Use the information
you have collected in your research on the market and competition to tell you what are realistic
and achievable revenues. Use the information you have collected about things like operations
and marketing to inform you about your potential expenses. Don’t guess.
9. When you have completed your research, make a determination about the feasibility of your
business idea. Based on what you have learned, should you move forward to the next step of
writing your business plan?
What Should Your Business Plan Include?
A business plan is used to map out the critical issues in starting and growing a business. The process of
creating a business plan is useful in developing a business model and allocating resources, basically a
plan of how will money be earned and spent over time. It is also useful for investors or partners to help
them understand the business concept. While a great business plan does not necessarily guarantee
business success, it does help all stakeholders better understand the feasibility and risks of the plan. It
should be a living document that continues to evolve with the business.
Business plan formats can vary depending on the business model and organization complexity.
Download the Planning Chapter of the Social Enterprise Guide for some tips on the social purpose
business plan.
Using the information you derived from your Feasibility Study, consider covering the following topics in
your business plan:
Pre-Business Plan
Your feasibility study should have told you that your business idea is a fit with your organization: The
best practice is to develop a business that fits with your organization’s:
a. Mission
b. Values, strengths
c. Resources
d. And culture. Be prepared to make a culture shift as this is inevitable.
Business Plan
1. Overview of the business idea (high level)
a. What is your product or service?
b. Who will be your customers?
c. What are the mission and objectives and how do they complement those of the parent
non-profit?
d. Does your target community support your plan? How will you involve your target
community in the planning and/or operations of the business, if at all?
2. Relationship to the parent organization
a. How will the parent organization support the business?
b. How will the business support the parent organization?
c. What will be the legal structure (program within the parent organization, for-profit
subsidiary, etc.)?
d. What will be the governance structure? Will the existing board oversee the enterprise,
or will it have its own board?
3. Market Opportunity (this is a very critical section)
a. External and industry context of the business: what challenges and opportunities have
led this industry to where it is today? Where is it going? Are there any relevant
regulations, new competitors, etc that may change this industry in the near future?
b. Industry and market overview: everything you learned in your feasibility that will sell
your stakeholders on the demand for your product/service
c. Customer: who is your customer? Why will they want to purchase your
product/service, and how much will they be willing to pay for it?
d. Competition: outline who are they and why you know you can compete. Try to learn
from their successes and failures.
4. The business Model
a. Tell us more about your product
b. What makes what you’re doing a social enterprise? What is the enhanced social and/or
environmental value that your business is creating?
c. Why would customers choose you over a competitor? Be careful not to depend on the
“social” aspects to make your product/service desirable – customers care much more
about quality, customer service and value added.
d. Pricing: what are you charging and why? What are your customers charging? Avoid a
low-price strategy- it tends to signal to your customers that your product/service is of
poor quality.
e. Revenue Model: how will you make money? What capital is in place to get you
launched, and support you as you grow?
f. Set targets for your financial and social goals that will provide evidence that you are
successful in doing what you set out to do.
5. Operations
a. How will you produce your product and move it to the market?
b. Staffing: how many staff will you need, and what skills will they need? How will you train
them if necessary? If you are employing a target community who have barriers to
employment, be sure to get advice from other social enterprises on special
considerations such as maximum hours employees are able to work, the amount of
supervision needed, etc.
c. Marketing plan: how will advertise your product/service to your target market? Beware
of a mass-market approach- new entrants are generally more successful in marketing to
a tightly defined target market than to “everyone”.
d. Implementation timeline: how much time do you need to give yourselves to achieve
each phase of development?
e. What resources do you have in place to do what you are proposing to do? e.g. initial
start-up capital and funding for infrastructure and operating.
6. Management/Governance
a. Who will manage the enterprise? Do they have the right skill set?
b. What type of board governance will be most helpful?
c. How will you deal with conflict, disagreement, and competition for resources, among
and between the enterprise and the parent organization?
7. Social and/or environmental outcomes
a. What social and/or environmental outcomes do you want your enterprise to achieve?
b. How will you measure these outcomes?
c. What effect will these additional objectives have on how you operate your business?
d. Consider using the Demonstrating Value Program to help guide this process.
8. Financials
a. Use the information you have gathered to develop projected (also called pro-forma)
financial statements for at least three years. It is usually important to create monthly
projections for the first year, as growth and change happen quickly during start-up.
b. Include: income statement, balance sheet, and cash flow statements.
c. Where will your capital come from to support your launch and growth? Be sure to
understand the needs and objectives of your potential investors.
A couple of other notes:
1. If the readers are left asking lots of questions, you still have work to do to complete the plan.
2. Choose consultants well. Good consultants work collaboratively with organizations and it is good
practice to be very involved in the business plan development process. Look for guides on hiring
a consultant.
Online Resources:
You will find that The Canadian Social Enterprise Guide is a great resource for you in carrying out your
planning. There are also a number of tools available on line for social enterprises. One that I/we like is
offered by Seedco.
The Social Enterprise Guide
Seedco
Demonstrating Value
http://www.enterprisingnonprofits.ca/projects/the_guide
http://www.seedco.org/publications/
http://www.demonstratingvalue.org/