Discover What a Feasibility Report Is (Including a Template)

By Indeed Editorial Team

Published May 29, 2022

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

Companies typically use a range of methods to overcome difficulties, so it's crucial for them to select the best approach. A feasibility report can help you examine possible solutions to pick the most appropriate one. Learning what this report is and how to write one can help make your projects more efficient and successful. In this article, we define a feasibility report, explain its importance and its key components, discuss how to write one, and provide a template you can use to write your own.

What is a feasibility report?

A feasibility report is a document that assesses the viability of a group of potential project pathways or solutions. The individual who writes this report assesses the applicability of several ideas and then recommends the best one. They then deliver their results and offer their proposal to their project managers.

What is the importance of a feasibility report?

This report's objective is to ascertain the viability of several solutions or project routes and to pick the best one. It does so by dissecting several approaches to a problem or project and explaining the viability of each strategy. Readers may then decide whether to follow the report's advice for the optimal method based on the report's assessment. This in-depth examination of alternative techniques may assist businesses in making the best possible judgments about projects and their potential inherent difficulties.

Related: How to Write a Business Report in 4 Actionable Steps

Sections to include in a feasibility report

These reports vary in appearance from company to company, and the organization may provide particular instructions on how to write one. The majority of feasibility assessments contain the following sections:

Executive summary

The executive summary is one of the initial components of a feasibility study. An executive summary presents the report's main themes and provides an overview of the study. It's important for your executive summary to be short while still being clear and succinct. Consider including the following aspects in your executive summary:

  • Brief description of what's in your report, including the problem you're solving or the project you're working on currently

  • Notes on the main ideas from your research or important information from your report

  • Concise explanation of how the project or problem relates to the overall mission of the company

The objective of creating your executive summary is to make it succinct and clear, as the report may go into more depth. Although the executive summary is one of the initial sections of the report, many authors choose to write it after the report is complete to make it simpler to decide what material to include.

Introduction

The introduction is another critical component of a feasibility study. After the executive summary, write an introduction describing the nature of the problem or project and the recommended solutions. Just like the executive summary, the introduction may be generic and concise, as you may go into further detail later in the report.

Background and context

A feasibility study can also include context and background information. This section is critical to help readers comprehend critical contextual information. For instance, if you're debating various approaches to a project, you may explain the project's history and objectives in your background and context section. If you're comparing alternative solutions to a problem, you may describe how the issue originated and how it impacts the business. This helps your readers grasp the viability of various methods.

Related: The Ultimate Guide to Business Reports (With an Example)

Evaluation criteria

Additionally, you may add a report section explaining your rating criteria. This part explains to your readers how you assessed the viability of various alternatives and arrived at your recommendation. Your evaluation criteria may include the following:

  • Financial costs: Companies typically consider the financial impact of a project before taking action, so financial costs are beneficial criteria in your feasibility study.

  • Tax impacts: You can evaluate different approaches based on how they affect the company's taxes as another criterion.

  • Public perception: Certain projects or problems may impact the company's public perception, so you can evaluate how different approaches may influence the company's public perception in your feasibility study.

  • Environmental effects: If the company values environmentally friendly choices, you can consider including the environmental effects of an approach in your report.

  • Resources needed: You may need certain resources for different potential approaches, so you may consider including necessary resources as a criterion.

Evaluation of solutions

The solutions evaluation is a critical component of this report. This section fulfills the objective of a feasibility study, which is to assess the viability of proposed solutions and project pathways. The assessment section is where you compare alternative problem-solving methods using the established evaluation criteria. The assessment process helps highlight the best course of action.

Conclusion

You can summarize your report and reiterate your main points in a conclusion section. This section can be brief and include a quick description of the pros and cons of each of the approaches discussed. The purpose of this section is to remind your readers of how you evaluated each approach before you make your final recommendation.

Final recommendation

The last section of a feasibility study contains your direct recommendation for the best path forward. In this section, you can briefly explain whether the solution is feasible and why you believe it's the right choice. The key to writing the final recommendation section is to directly state your recommendation and your reasoning for it.

How to create a feasibility study

A feasibility study involves obtaining and evaluating a variety of data sources for a thorough understanding of the project's scope. You can conduct a feasibility study by performing the following steps:

1. Create a preliminary analysis of the project

Before embarking on a new initiative, it's critical to define the project's parameters. The feasibility study reveals the project's benefits and drawbacks, allowing you to develop strategies for overcoming challenges. This stage enables you to assess the viability of the project in terms of future market growth, competition, and sales estimates.

Related: What Is Corporate Development? (Types and Strategies)

2. Outline the company's financial position

This section addresses and outlines the anticipated revenue, operating expenses, and investment required to initiate or finish the project. Additionally, you may identify the resources necessary to attract investors, such as a strategy for approaching banks, investors, or venture capitalists. Include the return on investment for the project to estimate the financial expenses and the potential for profit.

3. Research the market

Determine current market circumstances, including competitor information and strategy. Collect data to assess if the product or service has a market and develop methods for accessing that market. Consider issuing surveys or organizing focus groups to attain a more complete understanding of your clients and their desires.

4. Create the structure of the project

Attempt to identify resources that are immediately accessible and may be necessary in the future by defining project-specific human resource requirements and clarifying technology needs. Provide an estimated timetable for the project. Also, consider creating an organizational chart to help explain to stakeholders and managers how the project is being implemented and progressing.

5. Assess the results

Analyze your outcomes to verify that you've met the project's goals and supplied sufficient data to make informed conclusions regarding the project's viability. Verify your data, notes, and plans. Confirm that you've considered all possible scenarios and determine if any additions are necessary before concluding. You can then factor all the components to help ensure that the project meets expectations and successfully concludes.

Feasibility study template

Here is a template you can use to guide you in writing your feasibility study:

[Title of feasibility study]

Executive Summary

[This section includes a brief description of the contents of your report, including the problem you're solving or the project you're working on currently.]

Introduction

[This section is an introduction to the problem or project and the proposed approaches.]

Background and Context

[This section includes important contextual information.]

Evaluation Criteria

[This section describes your criteria for evaluating approaches.]

[Criterion]

[Criterion]

[Criterion]

Evaluation of Solutions

[This section is where you compare the different approaches based on your evaluation criteria.]

[Potential solution] [Feasibility based on criterion][Feasibility based on criterion][Feasibility based on criterion]

[Potential solution] [Feasibility based on criterion][Feasibility based on criterion][Feasibility based on criterion]

[Potential solution] [Feasibility based on criterion][Feasibility based on criterion][Feasibility based on criterion]

Conclusion

[This section is where you summarize your report and reiterate your main points.]

Final Recommendation

[This section contains your direct recommendation for the best path forward.]

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