What Is a Feasibility Report?

A feasibility report is the result of a detailed examination of a proposed idea, project or business to determine if it is likely to be successful. It is used in business, banking, manufacturing, science and other areas. Some financial institutions require one as part of the loan process.

A feasibility study is done before an idea is approved or implemented. It is not a marketing proposal but rather an unbiased, factual inspection of what the idea means for the business. It examines multiple aspects of the idea, such as its potential market, initial and ongoing investment needs, staffing and equipment requirements, impact on current business operations, competition, marketing schemes and profit expectations in the short and long term. The study also identifies potential risks and defines mitigating solutions. This is an important element of feasibility studies, because addressing shortcomings while an idea is still on paper is more cost effective than after it is in production. This helps prevent unplanned costs, delayed schedules and lost customers.

Feasibility reports for complex technical ideas requiring large investments are more sophisticated than straightforward, low risk ones. In general, a feasibility report should address the marketing, technical, financial and organizational aspects of the idea and its positive and negative outcomes for the business.