Creating a Project Feasibility Study

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Creating a project feasibility study in the correct manner can make a difference in the conclusion of your project. This is done by identifying all of the possible target audiences and their preferences for your particular deliverable. Other factors that must be clarified include the right price, level of quality, and color the target audience will prefer in your type of product.

The project feasibility study is a project management tool that will help discover just what markets in the world have the need for your deliverable. Not only does the target audience have to be correctly identified, but also a secondary audience, and if possible, a third. This allows for an organization to get input to just what they are looking for in the type of product you are producing. This input makes it significantly easier to provide a product that is desirable by more people. This increases the possible revenue stream from this business venture.

In the project feasibility study, you can also explore the desired level of quality your product is expected to have. The reason for this is so the minimal level can be obtained without affecting the desirability of your product by the target audience. This does not mean it is ok to create an inferior product on purpose, but rather place the level of quality in the product that is necessary for the use of the item. A good example of this is a nail. If you are selling a nail that is supposed to be 1 inch long, the specifications can be from 7/8” to 1 1/8”. It is possible to make every nail 1” long, but then the profits of your business venture will diminish because of all the rejected material.

Creating a project feasibility study in the right manner will give you the information that is necessary for your business venture to succeed. It is the interpretation of the data that is collocated which is vital to the success of your project. This allows for you to provide the deliverable at the right price, so your organization can make a level of profit that is desirable.

Conducting a Feasibility Study

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Conducting a feasibility study in the new global market place requires more planning and resources than what most organizations are used to. Expanding the market area for your products to be sold is never an easy task to accomplish. This is why most organizations turn to a project management template as the tool of choice to assist them in including all of the requirements to help make this task a successful one.

The documentation of the feasibility study is the foundation on which the specifications and features of a deliverable are tested in the market place, to see just how much it is desired by those looking to spend their money on such an item. The demographics of the target audience have to be analyzed, along with their desire to purchase your product. Most of all, the target audience has to be able to afford your product. Having just a desirable product is not enough. People or corporations must be willing to make the purchase or the deliverable will not be considered a success.

The making of the feasibility study can be easily accomplished with the use of a feasibility template. This will help any project manager plan out just who might be interested in acquiring your product. It will also help you to identify your secondary target audience. This template has a path in it that will show you how to look at the widest possible audience for your product, and help you get their input into its design, affordability, looks, and desirability. All of these characteristics of your deliverable have to be known before a final decision is made on whether your organization should proceed with the project or not.

The desire to create a new revenue stream with your deliverable is the reason a full and thorough feasibility study should be conducted on each product. Not only can it help your organization in making the required adjustments to your deliverable that will make it more attractive, it will also make it easier to sell.

The report filed from a feasibility study is the deciding factor in whether or not your company should proceed with a business venture. The more complete it is going to be, the fewer questions and risks associated with this business venture will exist.

Financial Planning with Project Management Tools

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Creating a Financial Plan with Project Management Tools

Within this article, we will help you as a Project Manager to budget for project expenditure by describing:

How to create a Project Financial Plan with Project Management Tools

Early in the Project Planning phase, you will need to define the overall budget for the project implementation. However setting a budget isn’t an easy task. In fact, many experienced Project Managers would say that its more of an Art rather than a Science! As challenging as it is, there are 4 steps you can take to create an accurate and realistic budget, by documenting a project “Financial Plan”:

Step 1: List the Financial Expenses

The first step taken when defining a Financial Plan and setting a project budget, is to identify all of the types of expenses that are likely to be incurred throughout the Project Lifecycle.

Typically, most projects spend the majority of their budget on purchasing, leasing, renting or contracting the resources to the project (e.g. labor, equipment and materials). However other types of expenses incurred may include those related to the:

  • Procurement of resources from suppliers
  • Establishment of a Project Office
  • Administration of the project

Step 2: Quantify the Financial Expenses

Once you have identified a detailed list of expenses to be incurred throughout the project, the next step is to forecast the unit cost of each expense type listed. The unit cost is simply the cost of a single unit of a particular expense item. For instance, the unit cost for:

  • labor may be calculated as the cost per hour supplied
  • equipment may be calculated as the rental cost per day
  • materials may be calculated as the purchase cost per quantity

After listing the unit costs, you should calculate the total amount of each expense item needed to undertake the project using these project management tools. For instance:

  • Identify the number of roles required
  • Quantify the items of equipment needed
  • Determine the amount of materials required
  • Quantify the procurement items to be sourced from suppliers
  • Calculate the administration costs the project

Step 3: Construct an Expense Schedule

You have now collated all the information needed to build a detailed expense schedule. This schedule enables the Project Manager to calculate the total cost of undertaking the project on a daily, weekly or monthly basis.

To create an Expense Schedule, build a table which lists all of the expense types down the left hand side of page, and all of the weeks in the year across the page. Then identify for each week and for each expense type, the amount of financial expenditure to budget. Once complete, you can sum up all of the expenses for any particular week to gain a weekly budget for the entire project.

Of course you may wish to calculate a daily, monthly or yearly view, based on your particular project need. Also don’t forget to list any assumptions made during the creation of this Financial Plan. For example, it may be assumed that:

  • “The project delivery dates will not change during this project.”
  • “The unit costs forecast are accurate to within 5%.”
  • “The funds listed by this plan will be available as required.”

And finally, list any constraints identified during this financial planning process. For example:

  • “Limited information was available when identifying costs”
  • “A market shortage has resulted in a high labor costs”

Step 4: Define the Financial Process

Now that you have created a detailed Expense Schedule, you need to define the process for monitoring and controlling expenses (i.e. costs) throughout the Project Lifecycle. Define the Cost Management Process for your project by documenting the:

  • Purpose of the process
  • Steps involved in undertaking the process
  • Roles and responsibilities involved in undertaking the process
  • Templates used to support the process

There you have it! By completing the 4 steps listed above, you will be able to create a comprehensive Financial Plan for your project and ensure that you consistently produce project deliverables within budget. To complete a project inside budge, implement project management tools.