Planning for Success- The Role of Feasibility Studies and Business Plans in Effective Business Management

Planning for Success- The Role of Feasibility Studies and Business Plans in Effective Business Management

Failure to Plan Is a Plan to Fail

Planning is among the most important things in a business because it facilitates the acquisition of the resources needed for the business and setting the goals and objectives of the business. The phrase, “failure to plan is a plan to fail,” might apply to running a business when setting the direction for the business. For instance, businesses need a plan to determine what needs to be done and monitor the process towards achieving the business’ goals and objectives for the business to be successful. Therefore, without a plan, a business person may lose track of the business’ performance because of unclear goals and objectives, which could lead to failure.

A Feasibility Study Relative to a Business Plan

A feasibility study is among the components of a business plan. According to Mukherjee (2017), a feasibility study is an assessment or examination of a planned scheme based on possible gains and predicted outcomes. A feasibility study is usually conducted to determine whether a proposed business is worth investing in based on the profitability of the business, anticipated risks, and the resources needed. A feasibility study can also help a business person identify a business’s strengths, weaknesses, opportunities, and threats and the benefits and costs associated with alternative business options. Therefore, conducting a feasibility study before investing in a business is important to prevent the risk of investing in a nonprofitable business or a business with a high risk of failure caused by threats in the business environment.

The “Breakeven Analysis” Concept in Business Start-Up Initiative

Breakeven analysis determines the relationship between variable and fixed costs and revenue (Shrotriya, 2019). For start-up initiatives, breakeven analysis means determining the costs incurred to start the business and the revenue that the business will generate. This information is important when assessing the feasibility of a start-up initiative because it can help a business owner predict whether the business will be successful. For example, if the fixed and variable costs are high, the business may be less profitable because most of the revenue will be used to cover the costs, leading to the conclusion that the business may not be feasible.

References

Mukherjee, M. (2017). Feasibility studies and important aspects of Project Management. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.2960589

Shrotriya, V. (2019). Break-even analysis – The concept and its utility. International Journal of Research and Analytical Reviews (IJRAR, 6(1). https://www.researchgate.net/publication/337465115

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A discussion question should be answered with a substantial post of 2-3 paragraphs.
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Planning for Success- The Role of Feasibility Studies and Business Plans in Effective Business Management

Someone once said, “Failure to plan is a plan to fail.” How might this apply to running a business?
What is a feasibility study relative to a business plan?
Describe the meaning of a “breakeven analysis” concerning a business start-up initiative.
Support your responses through examples.