6 Types of Feasibility Studies

Feasibility studies are a preliminary analysis that seeks to determine how feasible a project can be, analyzing different factors that may impact it, therefore, there are different types of feasibility studies, such as technical, financial, legal, social, etc.

The Feasibility studies are essential tools in the field of project development and managementTherefore, they provide a detailed and objective evaluation of whether a proposed project or idea is viable and sustainable in different aspects, whether technical, financial, legal, social, or others.

Therefore, there are different types of project evaluation, which together provide a preliminary evaluation that provides clarity and offers a clear direction for the implementation of the project, empowering in turn the making of strategic decisions.

Let's see what the 6 most common types of feasibility studies are about.

What is a feasibility study?

A viability study it's a preliminary analysis that seeks to determine the possibility and convenience of carrying out a project, investment or specific initiative, this type of study is based on a detailed evaluation of all facets of the project to determine whether or not it should continue.

Basically, this study Its purpose is to verify if the established objectives can be achieved with said project., analyzing different perspectives, such as technical, financial, legal, temporal, environmental, social or others.

Types of Feasibility Studies

There are many types of feasibility studies, based on the different dimensions that may impact a project, among the most common are:

Technical or operational feasibility study

A technical or operational feasibility study It is an evaluation that is carried out to determine if a proposed project or idea is technically feasible to carry out, its main objective is Identify whether the necessary technology, tools, resources and technical skills are available and adequate to successfully carry out the project.

The key components of a technical feasibility study typically involve:

• Identify the specific technical needs of the project.
• Evaluate whether the technology required for the project is available and accessible.
• Determine if the team has or can acquire the technical skills necessary to implement and maintain the project.
• Evaluate whether the current infrastructure (hardware, software, networks, etc.) is adequate or if upgrades or acquisitions are required.
• Identify possible challenges or technical barriers that could arise, and propose solutions or alternatives to overcome them.
• Consider how the project will integrate with other existing systems or processes, if necessary.
• Provide an estimate of how long it will take to implement the technical solution.

Financial or economic feasibility study

A financial or economic feasibility study It is a detailed analysis that is carried out to determine if a project, investment or initiative is economically viable from a financial perspective, the main objective of this study is evaluate whether the project will generate an adequate return on investment and whether it will be able to meet its financial obligations over time.

The key components of a financial feasibility study typically involve:

• Estimate all expenses related to the implementation of the project, such as initial costs, operating costs, maintenance costs, among others.
• Estimate the income expected to be obtained from the project over time.
• Determine the break-even point at which revenues equal costs, that is, the moment at which the project will begin to be profitable.
• Evaluate the profitability of the project in comparison with other investments or discount rates.
• Project the inflows and outflows of money over time, considering different scenarios.
• Evaluate how changes in key variables (such as costs, sales prices, sales volume) affect the profitability of the project.
• Identify and evaluate the different financing options available for the project, including loans, investors, grants, among others.
• Identify possible risks that could affect the financial viability of the project and propose strategies to mitigate them.

Legal feasibility study

In legal feasibility study, also known as a legal feasibility analysis, is an evaluation conducted to determine whether a proposed project or initiative is viable from a legal and regulatory perspective; Basically, this study seeks to identify possible legal obstacles and ensure that the project is carried out in accordance with the laws, applicable regulations and standards.

The key components of a legal feasibility study typically involve:

1. Identify and analyze the laws and regulations relevant to the project in question.
2. Identify the permits, licenses or authorizations necessary to develop and implement the project.
3. Identify potential legal risks associated with the project, such as litigation, sanctions or penalties.
4. Evaluate contractual requirements, such as agreements with suppliers, employment contracts, association agreements, among others.
5. Consider issues related to patents, copyrights and trademarks.
6. Identify specific legal responsibilities that the organization or parties involved might have once the project is underway.
7. Assess how the project could affect the rights of third parties and what legal measures might be needed to address these issues.
8. Review project policies and procedures to ensure they are in compliance with applicable laws and regulations.

Temporary feasibility study

A study oftemporary feasibility refers to the evaluation of the feasibility of completing a project or task in a given time, this type of study focuses on determining whether the proposed deadlines for a project are realistic and achievable, considering resources, limitations and other relevant factors.

The main components of a temporary feasibility study may involve:

1. Analyze the estimated duration of each phase or task of the project based on the defined scope.
2. Evaluate the availability of resources (human, technical, financial, etc.) and how these can influence the project completion time.
3. Identify tasks that depend on the completion of others and how these dependencies can affect the overall schedule.
4. Identify possible delays and other risks that could affect the schedule and propose mitigation measures.
5. Determine if there is additional time in the schedule that allows unforeseen events to be addressed without affecting the proposed completion date.
6. Consider whether certain methods or techniques can speed up the process, such as working in parallel or using technologies that increase efficiency.

Environmental feasibility study

A environmental feasibility study is an evaluation carried out to determine whether a proposed project or activity is viable from an ecological and environmental perspective; that is, bseeks to identify the possible impacts that the project could have on the environment and evaluate whether these impacts are acceptable, mitigable or, where appropriate, unacceptable.

Key components of an environmental feasibility study may include:

• Assess how the project will affect local ecosystems, including flora, fauna, and bodies of water.
• Evaluate any type of contamination that may be caused by the project, whether water, air or soil contamination.
• Analyze how the emission or production of waste will be managed.
• Consider how the project could alter the landscape or visual environment.
• Propose measures that can be implemented to reduce or offset the negative impacts identified.
• Review applicable environmental laws and regulations and determine if the project complies with them.
• Identify environmental risks that could arise, such as spills, accidents or unintentional release of contaminants.
• Evaluate the sustainability of the project over time and how it aligns with sustainable development objectives.

Social feasibility study

A social feasibility study evaluates whether a proposed project or initiative is viable from a social point of view. That is to say, seeks to determine if the project will be accepted and supported by the community or affected communities, and whether it will contribute positively to general social well-being.

The key components of a social feasibility study typically involve:

• Evaluate how the project will affect local communities in terms of employment, displacement, culture, among others.
• Identify the possible benefits that the project can provide, such as job creation, access to services or improvement of infrastructure.
• Conduct consultations and workshops with community members to obtain their opinions and concerns.
• Evaluate how the project may impact or be influenced by the cultural norms and values ​​of the community.
• Propose strategies or measures that can be implemented to address and mitigate identified negative social impacts.
• Study how the project relates or integrates with other initiatives or projects in the community or region.
• Assess whether the social benefits of the project will be lasting and how it will influence future generations.