{"id":10194,"date":"2022-12-08T18:05:50","date_gmt":"2022-12-08T12:35:50","guid":{"rendered":"https:\/\/razorpay.com\/blog\/?p=10194"},"modified":"2023-05-30T17:38:28","modified_gmt":"2023-05-30T12:08:28","slug":"feasibility-study","status":"publish","type":"post","link":"https:\/\/razorpay.com\/blog\/business-banking\/feasibility-study\/","title":{"rendered":"Feasibility Study for Businesses"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">The year is 1996, and world-famous American fast food joint McDonald\u2019s wants to open a restaurant in India.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">But how would the management of McDonald\u2019s know for sure that the formula that worked in America will work in India?\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">They did a <\/span><b>feasibility study<\/b><span style=\"font-weight: 400;\"> to find out.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">A feasibility study analyzes the variables surrounding a business and the best way to manipulate these variables to ensure guaranteed success.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Read on to understand what a feasibility study is and whether your business needs one!\u00a0<\/span><\/p>\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_80 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-69dba503b147a\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-69dba503b147a\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/razorpay.com\/blog\/business-banking\/feasibility-study\/#What_is_a_Feasibility_Study\" >What is a Feasibility Study?\u00a0<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/razorpay.com\/blog\/business-banking\/feasibility-study\/#How_a_Feasibility_Study_Works\" >How a Feasibility Study Works<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/razorpay.com\/blog\/business-banking\/feasibility-study\/#Financial_Feasibility_Study\" >Financial Feasibility Study<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/razorpay.com\/blog\/business-banking\/feasibility-study\/#Technical_Feasibility_Study\" >Technical Feasibility Study\u00a0<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/razorpay.com\/blog\/business-banking\/feasibility-study\/#Economic_and_Social_Feasibility_Study\" >Economic and Social Feasibility Study\u00a0<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/razorpay.com\/blog\/business-banking\/feasibility-study\/#Who_Needs_a_Feasibility_Study\" >Who Needs a Feasibility Study?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/razorpay.com\/blog\/business-banking\/feasibility-study\/#FAQs\" >FAQs<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/razorpay.com\/blog\/business-banking\/feasibility-study\/#Do_business_founders_need_an_expert_to_conduct_a_feasibility_study\" >Do business founders need an expert to conduct a feasibility study?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/razorpay.com\/blog\/business-banking\/feasibility-study\/#Is_it_important_to_conduct_a_feasibility_study\" >Is it important to conduct a feasibility study?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/razorpay.com\/blog\/business-banking\/feasibility-study\/#How_does_a_feasibility_study_work\" >How does a feasibility study work?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/razorpay.com\/blog\/business-banking\/feasibility-study\/#Who_needs_to_conduct_a_feasibility_study\" >Who needs to conduct a feasibility study?<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h2><span class=\"ez-toc-section\" id=\"What_is_a_Feasibility_Study\"><\/span><b>What is a Feasibility Study?\u00a0<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">A feasibility study is when the management of a business does extensive research into whether a project will succeed, keeping in mind the different variables that affect the project.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">This \u201cproject\u201d could be anything \u2013 actually starting the business, expanding the business, or launching new products.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">There are many variables that need to be considered: technical considerations, legal support, income, costs, sources of revenue, and more.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">For a start-up founder or a small business owner, a feasibility study is an important way to assure both the founding team and investors that the business will do well in the market.\u00a0<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"How_a_Feasibility_Study_Works\"><\/span><b>How a Feasibility Study Works<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">How does a feasibility study work? To understand the different dimensions of feasibility, let\u2019s use an example.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Maya wants to open a gaming arcade in the society she lives in. She loves playing games and dreams of an arcade where people can play both virtual and real games.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Before she invests money in her business idea, she decides to do some research into the feasibility of her idea.\u00a0<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"Financial_Feasibility_Study\"><\/span><b>Financial Feasibility Study<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">First, Maya will look at <\/span><b>financial feasibility<\/b><span style=\"font-weight: 400;\">. This is pretty straightforward &#8211; she has to be able to fund her business. She will need money to lease a commercial space, to buy computers, desks, internet, and the various furniture she needs for her arcade.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">If she cannot fund her business with her own money, she will need to be able to source investment from outside sources.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">These sources include business loans from banks, investments from individual investors, or government financing schemes.\u00a0<\/span><\/p>\n<p><b>Read more: <\/b><a href=\"https:\/\/razorpay.com\/learn\/business-banking\/small-business-loan\/\"><b>Small Business Loans<\/b><\/a><\/p>\n<p><span style=\"font-weight: 400;\">Financial feasibility is the first and most important aspect that a founder needs to consider. Without money, the business cannot even begin!<\/span><\/p>\n<p><span style=\"font-weight: 400;\">For example, when Razorpay was looking into expanding operations into Southeast Asia, bring new products like Magic Checkout, and scale up RazorpayX, it raised money from investors in a Series-F funding.\u00a0<\/span><\/p>\n<p><b>Read more: <\/b><a href=\"https:\/\/razorpay.com\/blog\/razorpay-secures-375-million-in-series-f-funding\/\"><b>Announcing Razorpay\u2019s $375 Million Series-F Funding, Valuation Increases to $7.5 Billion<\/b><\/a><\/p>\n<h2><span class=\"ez-toc-section\" id=\"Technical_Feasibility_Study\"><\/span><b>Technical Feasibility Study\u00a0<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Next, she looks at <\/span><b>technical feasibility. <\/b><span style=\"font-weight: 400;\">Technical feasibility means looking into whether current technology will support your business or not.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">If Maya wants her business to succeed, she will need access to gaming computers, fast internet, and downloadable gaming software. Since her idea also includes real-life games like cards or Monopoly, she will need access to board games, cards, and other analog games.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">If Maya lives in a country where internet speeds are not fast enough for smooth gameplay, her business might not succeed.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">\u201cTechnology\u201d doesn\u2019t always have to be computers and software! Any infrastructure that the business needs to thrive is called technology.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">For example, Amazon, in its early days, was a bookshop! Jeff Bezos sold books online from his garage, which would not have been possible without the infrastructural support of the American postal service and other courier companies. These logistics companies provided Amazon with the technological support it needed to succeed.\u00a0<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"Economic_and_Social_Feasibility_Study\"><\/span><b>Economic and Social Feasibility Study\u00a0<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Lastly, she will look at<\/span><b> economic and social feasibility<\/b><span style=\"font-weight: 400;\">. Even if Maya is able to source financing and has all the technology to support her, her business will not succeed if society does not support her.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">If the government of her country banned commercial video game playing, her business would be illegal! Maya (and all founders!) need to take a careful look into the law that governs the society that the business will operate.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">If Maya lives in a place mostly populated by older people, her video game segment might not do well because of a lack of demand. An important aspect of economic feasibility is ensuring that there is enough demand for the idea.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">A good example of the importance of Economic and Social Feasibility is how McDonald\u2019s <a href=\"https:\/\/www.npr.org\/sections\/thesalt\/2012\/09\/04\/160543754\/mcdonalds-goes-vegetarian-in-india\" rel=\"nofollow noopener\" target=\"_blank\">dealt<\/a> with their expansion into India.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">They did away with their trademark beef Big Mac, and introduced the Chicken Maharaja Mac, since beef and pork are not popular<\/span><\/p>\n<p><span style=\"font-weight: 400;\">In the case of big, expensive business plans, it is best to consult with an expert, since there might be nuances that a layman might not know or understand. If the business idea is a small one, founders can conduct a feasibility study on their own with some research.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">meats consumed in Indian society. They also introduced, for the first time, a vegetarian menu, since a sizeable portion of the population are vegetarians.\u00a0<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"Who_Needs_a_Feasibility_Study\"><\/span><b>Who Needs a Feasibility Study?<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">If you have an idea, like Maya, that you want to make into a full-fledged business, you should conduct a feasibility study. Investing money into a business that is not feasible in even <\/span><i><span style=\"font-weight: 400;\">one <\/span><\/i><span style=\"font-weight: 400;\">of the above-mentioned dimensions would be a drastic and very costly mistake!\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">If you already own a business and are looking into expanding or introducing new products or services, a feasibility study would help you determine whether your expansion would be successful.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">If you own a business or are looking to start one, you\u2019ll need a robust bank! Check out RazorpayX.<\/span><\/p>\n<div style=\"text-align: center;\"><a style=\"border-radius: 3px; background: #528FF0; padding: 15px; font-weight: 600; cursor: pointer; text-decoration: none; color: white;\" href=\"https:\/\/razorpay.com\/x\/\" target=\"_blank\" rel=\"noopener\" data-schema-attribute=\"\">Check out RazorpayX!<\/a><\/div>\n<p>&nbsp;<\/p>\n<h2><span class=\"ez-toc-section\" id=\"FAQs\"><\/span>FAQs<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<div id=\"rank-math-rich-snippet-wrapper\"><div id=\"rank-math-faq\" class=\"rank-math-block\">\n<div class=\"rank-math-list \">\n<div id=\"faq-1\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question \"><span class=\"ez-toc-section\" id=\"Do_business_founders_need_an_expert_to_conduct_a_feasibility_study\"><\/span>Do business founders need an expert to conduct a feasibility study?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<div class=\"rank-math-answer \">\n\n<p>In the case of big, expensive business plans, it is best to consult with an expert, since there might be nuances that a layman might not know or understand. If the business idea is a small one, founders can conduct a feasibility study on their own with some research. <\/p>\n\n<\/div>\n<\/div>\n<div id=\"faq-2\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question \"><span class=\"ez-toc-section\" id=\"Is_it_important_to_conduct_a_feasibility_study\"><\/span>Is it important to conduct a feasibility study?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<div class=\"rank-math-answer \">\n\n<p>It is incredibly important to conduct a feasibility study to reduce the risk of failure as much as possible. Simply investing in a business idea without properly researching and analyzing its feasibility almost guarantees failure. <\/p>\n\n<\/div>\n<\/div>\n<div id=\"faq-3\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question \"><span class=\"ez-toc-section\" id=\"How_does_a_feasibility_study_work\"><\/span>How does a feasibility study work?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<div class=\"rank-math-answer \">\n\n<p>There are three main dimensions to a feasibility study: financial feasibility, technical feasibility, and economic and social feasibility. A feasibility study looks into whether all these dimensions support the business idea.<\/p>\n\n<\/div>\n<\/div>\n<div id=\"faq-4\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question \"><span class=\"ez-toc-section\" id=\"Who_needs_to_conduct_a_feasibility_study\"><\/span>Who needs to conduct a feasibility study?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<div class=\"rank-math-answer \">\n\n<p>Anybody who wants to start a business, or a business owner with an existing business who wants to expand, or introduce new products or services. <\/p>\n\n<\/div>\n<\/div>\n<\/div>\n<\/div><\/div>\n","protected":false},"excerpt":{"rendered":"<p>The year is 1996, and world-famous American fast food joint McDonald\u2019s wants to open a restaurant in India.\u00a0 But how would the management of McDonald\u2019s know for sure that the formula that worked in America will work in India?\u00a0 They did a feasibility study to find out.\u00a0 A feasibility study analyzes the variables surrounding a<\/p>\n","protected":false},"author":106,"featured_media":10196,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"footnotes":""},"categories":[27],"tags":[],"class_list":{"0":"post-10194","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business-banking"},"_links":{"self":[{"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/posts\/10194","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/users\/106"}],"replies":[{"embeddable":true,"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/comments?post=10194"}],"version-history":[{"count":0,"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/posts\/10194\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/media\/10196"}],"wp:attachment":[{"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/media?parent=10194"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/categories?post=10194"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/tags?post=10194"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}