Carrying out a Feasibility Study
Practical Action
II. Market Share
Estimate the proportion of the total market that the new business could expect to have (likely
market share)
III. Scale of Production
Once you have found information about
potential customers, their requirements
and the likely share of the market that
could be obtained for a new product, it
is necessary to calculate the monthly
and daily production required to meet
that demand (see example).
The figure for the daily production rate is central
to all following calculations of production
capacity and investment requirements and
therefore should be as accurate as possible.
Technical feasibility
After calculating the scale of production needed to supply the estimated likely share of the
market. It is necessary to assess whether production at this scale is technically feasible. The
following steps have to be taken:
− Identify the raw material supply, their quality and buying costs
− Identify production location and product quality
− Identify price and price seasonality
− Research sources and costs of services (fuel, water, electricity etc) and other
processing inputs
− Identify sources and costs of packaging and label design
− Identify distribution procedures to retailers or other sellers
− Research availability of information and expertise to ensure that products are
always made at the required quality
− Research availability and costs of the equipment needed
− Research availability of maintenance and repair costs of the equipment needed
− Clarify labour requirements, costs and availability.
To plan the different aspects of the production process, first put together a modified process
chart showing the scale of operation and daily requirements for production (see the example at
the end of the brief). This chart is used to identify the following;
I. Weights of raw materials and ingredients that should be scheduled for each day
II. Number and size of equipment required to achieve the planned throughput of
product
III. Number of packages that are required each day
IV. Number of workers and their different jobs.
I. Weights of raw materials and ingredients
The different steps to identify the weights of raw materials and ingredients are as follows:
• Experiment with different mixes of ingredients to produce a product that has the colour,
flavour, appearance etc that the consumers like. Weigh each ingredient carefully and
record all weights for each formulation tried.
• Develop a successful formulation. Take care that it is always made in exactly the same
way.
• Experiment with different varieties of fruits and the particular process that is being used
to calculate the actual amount of losses (see also table showing typical losses during the
processing of fruits).
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