Creating a Feasibility Study and Feasibility Plan: A 10 Step-by-Step Guide Tailored for Restaurants and Resorts

In the world of business and entrepreneurship, conducting a feasibility study is crucial before launching any new venture or project. This comprehensive guide will walk you through the process of creating a feasibility study and feasibility plan, outlining each step in detail to ensure thorough analysis and informed decision-making.

Creating a Feasibility Study and Feasibility Plan: A Step-by-Step Guide

10 Key Steps

Introduction

• Importance of feasibility studies in mitigating risks and maximizing chances of success.
• Overview of what a feasibility study entails and its components.

Step 1: Define the Project Scope and Objectives

• Clarify the purpose and goals of the project or venture.
• Define the scope, including target market, geographic area, and product/service specifics.
• Establish measurable objectives that the feasibility study aims to achieve.

Step 2: Conduct Market Research

• Gather data on market trends, size, growth potential, and customer demographics.
• Analyze competitors and their strengths, weaknesses, opportunities, and threats (SWOT analysis).
• Identify market gaps or niche opportunities that the project can capitalize on.

Step 3: Assess Technical Feasibility

• Evaluate the technical requirements of the project.
• Determine if the necessary technology, resources, and expertise are available or can be acquired.
• Consider any potential technical challenges or limitations that may impact implementation.

Step 4: Analyze Financial Feasibility

• Develop a detailed financial plan, including startup costs, operating expenses, and revenue projections.
• Calculate potential return on investment (ROI) and breakeven analysis.
• Conduct sensitivity analysis to assess financial risks under various scenarios.

Step 5: Evaluate Legal and Regulatory Requirements

• Identify legal and regulatory requirements applicable to the project.
• Ensure compliance with industry standards, permits, licenses, and zoning regulations.
• Assess any potential legal risks or barriers that may affect project feasibility.

Step 6: Conduct Resource Feasibility Assessment

• Evaluate availability and allocation of human resources, including skills and expertise needed.
• Assess availability of physical resources such as facilities, equipment, and supplies.
• Consider environmental impact and sustainability factors relevant to the project.

Step 7: Perform Organizational Feasibility Analysis

• Evaluate organizational readiness and capability to execute the project.
• Assess management structure, leadership, and governance framework.
• Determine if the project aligns with the organization’s strategic goals and values.

Step 8: Summarize Findings and Make Recommendations

• Compile findings from each feasibility assessment (market, technical, financial, legal, resource, and organizational).
• Summarize strengths, weaknesses, opportunities, and threats (SWOT analysis).
• Provide recommendations based on feasibility study outcomes, including go/no-go decision.

Step 9: Prepare Feasibility Plan

• Develop a feasibility plan outlining the project’s implementation strategy.
• Include action steps, timelines, responsibilities, and milestones.
• Detail contingency plans and risk mitigation strategies.

Step 10: Review and Finalize Feasibility Study Report

• Review the feasibility study report for accuracy, completeness, and clarity.
• Seek input and feedback from stakeholders, experts, and advisors.
• Finalize the report and distribute it to decision-makers for review and approval.

Recap

• Recap the importance of conducting a feasibility study to assess project viability.
• Emphasize the role of informed decision-making based on comprehensive analysis.
• Encourage ongoing monitoring and evaluation throughout the project lifecycle to adapt to changing conditions.

Let’s create a detailed example of a feasibility study and feasibility plan for a hypothetical project. Below is a step-by-step guide with accompanying tables to illustrate each stage of the process.

A> Example: Feasibility Study and Feasibility Plan for a “New RESTAURANT Concept”

10 Steps

Step 1: Define the Project Scope and Objectives

• Project Scope: Opening a new upscale restaurant in downtown Manhattan specializing in organic, farm-to-table cuisine.
• Objectives:
  • Establish a unique dining experience focused on sustainability and high-quality ingredients.
  • Cater to health-conscious consumers seeking premium dining options in a bustling urban environment.

Step 2: Conduct Market Research

Aspect	Findings and Analysis
Market Trends	Growing demand for organic and sustainable dining options in metropolitan areas.
Target Market	Affluent professionals aged 25-45 with disposable income and a preference for healthy, gourmet meals.
Competitive Analysis	Identified upscale restaurants offering similar concepts; assessed strengths, weaknesses, and market positioning.

Step 3: Assess Technical Feasibility

• Technical Requirements: Secure a suitable location with kitchen facilities compliant with health codes. Ensure access to reliable suppliers of organic produce and ingredients.

Step 4: Analyze Financial Feasibility

Financial Aspect	Details
Startup Costs	Estimated at $800,000 for leasehold improvements, equipment, initial inventory, and permits.
Operating Expenses	Monthly fixed costs projected at $50,000, including rent, utilities, payroll, and insurance.
Revenue Projections	Based on market research, forecasted average check size of $100 with projected sales of $2 million annually.
Return on Investment (ROI)	Expected breakeven within 2 years; ROI calculated at 20% by Year 3.

Step 5: Evaluate Legal and Regulatory Requirements

• Legal Considerations: Obtain licenses for alcohol service, adhere to food safety regulations, and comply with zoning laws in Manhattan.

Step 6: Conduct Resource Feasibility Assessment

Resource Aspect	Details
Human Resources	Plan to hire experienced chefs, servers, and managerial staff; assess availability of skilled labor in the area.
Physical Resources	Secure lease agreement for 3,000 sq. ft. space; evaluate equipment suppliers and delivery logistics for fresh produce.
Environmental Impact	Implement waste reduction measures and sustainable practices in sourcing ingredients.

Step 7: Perform Organizational Feasibility Analysis

• Organizational Readiness: Assess management capabilities and organizational structure to ensure alignment with project goals and operational needs.

Step 8: Summarize Findings and Make Recommendations

• SWOT Analysis:
  • Strengths: Unique concept, strong market demand.
  • Weaknesses: High initial investment, competitive market.
  • Opportunities: Growing health-conscious market, potential for brand differentiation.
  • Threats: Economic downturn, regulatory changes impacting food industry.
• Recommendations: Proceed with the project based on favorable market trends, strong financial projections, and strategic location advantages.

Step 9: Prepare Feasibility Plan

Action Steps	Timeline	Responsible Party
Secure lease and permits	Month 1-2	Project Manager
Hire key staff	Month 2-3	HR Manager
Develop menu and pricing strategy	Month 3-4	Head Chef
Conduct marketing and pre-launch activities	Month 4-6	Marketing Team
Grand opening and initial operations	Month 6	Operations Team

• Contingency Plan: Allocate 10% buffer in budget for unforeseen expenses; maintain flexibility in staffing and menu adjustments based on customer feedback.

Step 10: Review and Finalize Feasibility Study Report

• Review Process: Present feasibility study report to stakeholders, investors, and advisors for feedback and approval.
• Finalization: Incorporate feedback, finalize financial projections, and distribute approved feasibility plan for implementation.

Wrap up

By following this detailed example of a feasibility study and feasibility plan for a new restaurant concept, you can see how each step contributes to a thorough assessment of project viability. From market research and financial analysis to legal compliance and resource evaluation, a well-executed feasibility study provides the foundation for informed decision-making and successful project execution. Remember to adapt this process to fit the specific needs and characteristics of your own project or venture.

Let’s create a detailed example of a feasibility study and feasibility plan for a new resort business. Below is a step-by-step guide with tables to illustrate each stage of the process.

B> Example: Feasibility Study and Feasibility Plan for a start up or a “New RESORT Business”

Step 1: Define the Project Scope and Objectives

• Project Scope: Develop a luxury eco-resort in a coastal area of Southern California, offering sustainable accommodations and recreational activities.
• Objectives:
  • Provide a high-end, eco-friendly lodging experience that attracts affluent travelers seeking relaxation and environmental sustainability.
  • Establish a resort that integrates seamlessly with the natural surroundings while promoting environmental conservation.

Step 2: Conduct Market Research

Aspect	Findings and Analysis
Market Trends	Increasing demand for eco-friendly tourism and sustainable travel experiences among high-income travelers.
Target Market	Affluent individuals and families aged 30-60, with a focus on eco-conscious consumers and luxury travelers.
Competitive Analysis	Identified existing luxury resorts and eco-friendly accommodations in the region; assessed amenities, pricing, and market positioning.

Step 3: Assess Technical Feasibility

• Technical Requirements: Secure a suitable coastal property with zoning permits for resort development. Ensure access to sustainable building materials and renewable energy sources.

Step 4: Analyze Financial Feasibility

Financial Aspect	Details
Startup Costs	Estimated at $10 million for land acquisition, construction, permits, and initial operations setup.
Operating Expenses	Projected monthly expenses of $200,000, including payroll, maintenance, utilities, and marketing.
Revenue Projections	Anticipated average nightly rate of $500 with an occupancy rate of 70% year-round; projected annual revenue of $15 million.
Return on Investment (ROI)	Expected breakeven within 5 years; ROI projected at 15% by Year 7.

Step 5: Evaluate Legal and Regulatory Requirements

• Legal Considerations: Obtain permits for coastal development, adhere to environmental regulations, and secure business licenses for resort operations.

Step 6: Conduct Resource Feasibility Assessment

Resource Aspect	Details
Human Resources	Recruit skilled hospitality staff, including management, chefs, and guest services personnel.
Physical Resources	Secure 50-acre coastal property; assess infrastructure needs for water, electricity, and waste management.
Environmental Impact	Implement sustainable practices in resort operations; ensure minimal impact on local ecosystem through responsible development.

Step 7: Perform Organizational Feasibility Analysis

• Organizational Readiness: Assess management team capabilities and operational readiness to deliver high-quality guest experiences and meet sustainability goals.

Step 8: Summarize Findings and Make Recommendations

• SWOT Analysis:
  • Strengths: Unique eco-friendly concept, strong market demand for luxury eco-resorts.
  • Weaknesses: High initial investment, dependency on seasonal tourism patterns.
  • Opportunities: Growing eco-tourism market, potential for brand differentiation and premium pricing.
  • Threats: Economic downturn impacting travel, regulatory changes affecting coastal development.
• Recommendations: Proceed with the project based on favorable market trends, strong financial projections, and strategic location advantages.

Step 9: Prepare Feasibility Plan

Action Steps	Timeline	Responsible Party
Secure coastal property and permits	Month 1-6	Project Manager
Develop resort master plan and architectural design	Month 6-12	Architectural Team
Construction and infrastructure development	Month 12-24	Construction Team
Recruit and train resort staff	Month 18-24	HR Manager
Marketing and pre-launch activities	Month 24-30	Marketing Team
Grand opening and initial operations	Month 30	Operations Team

• Contingency Plan: Allocate 10% buffer in budget for unforeseen expenses; monitor guest feedback and adjust operations as necessary to enhance guest satisfaction.

Step 10: Review and Finalize Feasibility Study Report

• Review Process: Present feasibility study report to stakeholders, investors, and environmental authorities for feedback and approval.
• Finalization: Incorporate feedback, finalize financial projections, and distribute approved feasibility plan for implementation.

Conclusion

By following this detailed example of a feasibility study and feasibility plan for a new resort business, you can see how each step contributes to a thorough assessment of project viability. From market research and financial analysis to legal compliance and resource evaluation, a well-executed feasibility study provides the foundation for informed decision-making and successful project execution in the hospitality industry. Remember to adapt this process to fit the specific needs and characteristics of your own resort development project.

Final Thoughts

By following this step-by-step guide, you can systematically conduct a thorough feasibility study and develop a feasibility plan that serves as a roadmap for successful project implementation. Remember, the insights gained from a well-executed feasibility study not only mitigate risks but also pave the way for strategic growth and sustainable business success.