Tools and Checklists
How to conduct a feasibility study
Your feasibility study should cover technical viability, market viability and commercial viability. It should also include an overall assessment of risks and your strategies to minimise those risks.
You may need to seek professional assistance as you prepare your feasibility study but it will be worth it so that you can make an informed decision on whether or not to proceed with your business idea.
The following table will guide you through the various elements you need to consider in your feasibility study.
What to investigate
Details to include in your study
Purchase of an existing business:
Fact Sheet - Start a business checklist
Choosing the right site
When choosing an appropriate location for your business, consider the following questions before making your decision.
- Are you clear about your requirements, e.g. size, street frontage, services?
- Do you want to lease or buy?
- Have you found out about the advantages and disadvantages of the site by talking to previous tenants or owners?
- Is the site suitably zoned?
- Have you looked at the site in terms of the sales potential of the area, economic and demographic factors, and competition?
- Is the site suitably located in relation to your target market?
- How visible and accessible is your location to both foot and vehicle traffic and car parking facilities?
- How many people and vehicles pass your planned location each day and how important is each to your business?
- If location on a particular side of the street is important, is the site you’re looking at on the best side?
- Does the site project the right image about your business?
- Is the availability of nearby public transport important for access to your business?
- Will the cost of shipping goods to and from the site be a major issue?
- Do neighbouring businesses complement yours and do they appear to be doing well?
- Are there any vacant premises nearby? Why? How long has this been the case?
- How have similar businesses fared in this location?
- Are there any major changes contemplated in the area?
- Are there any restrictions on signage in the area?
- Can you afford the premises? Have you looked at alternatives?
- If the site is for lease, are the terms on offer suitable?
- Have you identified and costed all outgoings for which you will be responsible?
- Do you know what amount of security deposit or bank guarantee is required?
- Have you determined what insurances you are obliged to have in place?
- Are you aware of any indemnities you must give to the landlord?
- Do you know what will happen if you breach the terms of the lease?
- If you are a company, do you understand fully what providing directors’ guarantees means?
- Do the premises offer scope for expansion?
- Will zoning restrictions conflict with your future needs?
Checklist - Is your home suitable?
Once you’ve established that you have suitable space and facilities in your home, you’ll need to make sure that your business meets council requirements and that its operation won’t disturb neighbours.
Consider the following questions and think about the actions you may need to take to address the issues that arise.
- Is the location of your home easy for a new client to find?
- Is the nature of your business permitted in my council zone?
- Do you need any council permits to carry out alterations or additions to your home?
- Do you need signage outside your home?
- Is it possible to set aside a workspace of adequate size in your home, specifically for your business?
- Is the area you’ve chosen removed from family activities?
- Do you have adequate storage space?
- Do you need office equipment such as computer, photocopier and facsimile machine?
- Does your business have a requirement for natural light, extra lighting or additional power?
- Is there an appropriate reception area for clients?
- Is a separate line for business telephone, fax or computer modem required? Would a mobile telephone service be a viable option?
- Is there adequate parking space for suppliers, clients and staff?
- Does provision have to be made for a large letterbox for business mail?
- Is there a separate entrance for clients?
- Do you require office furniture (new or second-hand) such as desk, chair and filing cabinets?
- Will you be able to keep your home tidy during business hours?
- Will the ‘business’ aspect of your home appear professional to clients?
Checklist: Evaluating the purchase of a business
It may be tempting to act quickly so that you don’t miss out on what you think is a good opportunity.
It’s worth taking the time and putting in the effort to ensure you make the right decision.
Seek the advice of professional advisers who will help you as you evaluate the following aspects of the business under consideration: