Determining if a Proposed Writing Project is Feasible
There are all sorts of ways to conduct a feasibility study. A more complex study may require a more complex feasibility study. A simple project may require a simple process for a feasibility study
The tangible actions of a feasibility study may include:
- Conducting Research or gathering information, and compiling that information
- Documenting information, thoughts and analysis
- Meetings (formal or informal)
- Formulating recommendations
It might not necessarily involve all of those components. A very simple project, for example, may be to organize a party. The feasibility study may well be little more than a meeting for a couple of hours, between a party planner and client. A much more complex feasibility study might involve the construction of a significant building, where the study could involve thousands of man hours and the production of a written report of hundreds of pages.
Example components of a complex feasibility study
1. Formulating the Scope and Goals of the Project
2. Identifying assumptions
3. Gathering Existing Information
4. Outlining Strategy (who will be involved, what will be done, when, where & how
5. Analysing Financial Factors (sources of funding, budgeting, cash flow etc)
6. Considering return on investment
7. Identifying, Listing and Assessing Risks
8. Considering Technological Factors (what technologies are accessible, what will be used)
9. Consider Political factors (support, opposition, legal restrictions, implications of political change)
10. Environmental and Social Impacts (sometimes legally required, potential for disruption even if operating legally)
11. Determining Resources (both what is needed & when it is needed –money, manpower, equipment, materials)
12. Determining management structure and staff organisation
Who Should do a Feasibility Study?
There is a strong argument to have a feasibility study conducted by a manager who understands the industry and who is later, going to be working on the project
Whoever does it will be gathering valuable knowledge of the project, which might not all be committed to documentation. This person may be valuable once the project commences.
There is also an argument that someone who is independent should conduct the feasibility study. A person who is going to become part of the management team later on, will have a bias to see the feasibility study give a recommendation to proceed. If it proceeds they get more work.
In the real world, a feasibility study for a large project, may often be conducted by a team, headed by a middle level manager.
Risk Identification
They can emerge from either the project itself (lack of resources, bad management etc), from external influences (eg. Political) or unforeseen events (eg. Accident or natural disaster)
Tools for identifying risks include:
• Historical –consider problems that occurred with similar projects in the past
• Hypothetical Modeling –consider “what if” this or that happened (To do this properly requires the ability to think laterally, coupled with imagination)
• Project simulations –Can be costly & time consuming, documenting alternative pathways that a project might follow and considering different mixes of risks along the alternate paths (This may be viable for very large, costly projects only)
• Interviewing Experts, brainstorming with colleagues
• Developing and using check lists
Risk Assessment
Consider the nature and scope of any potential risk
Consider the probability
Consider the implications if this happens (costs, time delays etc)
From all such considerations, you can start to develop an appreciation for the relative importance of different risks.
Risk Analysis
Before starting a proper risk analysis, you may well have an insight into the relative significance of different risks; but it is only after doing a proper analysis that you can fully understand each of the risks.
A thoughtful and systemic risk analysis can be time consuming but it ensures:
• Your understanding of risk is based on logic and not emotion
• Risks are properly quantified and qualified
Negating Risks
Attend to the higher impact risks first (Anything that has the potential to have a greater impact on the project should be negated).
Less high impact threats should be minimized where possible by planning or any other means at your disposal, but always balance the likely cost if the risk eventuates, against the likely cost of putting something in place to deal with the problem. If it costs more to establish a contingency plan than what it would to deal with the problem if and when it occurs, you should probably avoid doing anything to minimize the risk.
Ways to Minimize or Eliminate Risks include:
- Changing strategy or operational plan
- Developing a contingency plan to respond to a problem if and when it occurs
- Allowing a buffer of time, finance or other resources (eg. Arrange a line of credit in case cash flow stall, buy enough materials to keep you going for 2 months, even though you might only need one months supply in advance)
- Put in place early warning systems (eg. Suppliers slowing in delivering materials, rate of equipment breakdowns increasing, cash reserves shrinking etc)
LEARN MORE (click below on courses or books of interest)
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Recommended Reading
The following ebooks written by our principal (John Mason) and staff, are excellent supplementary reading for anyone studying bookkeeping. Click on a title for more information about contents as well as purchasing details through the school's online bookstore.
