Estudio De Factibilidad

Feasibility Studies

October 2000

By:
W. Heath Hoagland and Lionel Williamson

University of Kentucky
Department of Agricultural Economics
400 Charles E. Barnhart Bldg.
Lexington, KY40546-0276
Phone: 859-257-5762
Fax: 859-323-1913
http://www.uky.edu/Ag/AgEcon/

Feasibility Studies

What is a feasibility study?

I. Marketing Firm Consideration

The purpose of a feasibilitystudy is to determine if
a business opportunity is possible, practical, and
viable.

A. Situation and Competition
1. Number, capacity, and location of
competing firms?
2. If no competing firmsare in operation
were such firms operating previously?
Why did they discontinue operations?
Are these reasons still valid?
3. Estimate percent utilization of existing
firm capacities. Reason forutilization
level.
4. Level of technology in competing firms?

Why do a feasibility study?
When faced with a business opportunity, many
optimistic persons tend to focus on its positive
aspects.A feasibility study enables them to take a
realistic look at both the positive and negative
aspects of the opportunity.

When to do a feasibility study?
Before starting a new business

B.Source of Raw Product
1. Current production within area
2. Projected production within area
3. Share of local production anticipated for
proposed firm
4. Product available from outside of area

Theprocess of defining a new business is critical.
A feasibility study is an important tool for making
the right decisions. A wrong decision at this point
often leads to business failure. Only 50% ofstartups are still in business after 18 months, and only
20% are in business after 5 years.

C. Assembly and Distribution
1. Transportation cost
a. Assembly of raw product
b. Distribution offinished product
2. Storage cost
3. Other procurement/distribution costs

Also feasibility studies can be done before acquiring
an existing business and before expanding an
existing business....