What does feasibility budgeting mean?
At its most basic, it’s working out if you can make money from your business idea. Depending on how much detail you go into, you can also start to work out what your return on investment would be.
Should this be done in isolation?
This is an essential process every single business should go through prior to committing to starting a business. Even going through the process of doing some ‘back of an envelope’ calculations are better than nothing, but the more detail you go into the better off you will be. As well as doing a feasibility budget, you should also do a cash flow forecast which will give a wider understanding about the flow of money in and out of your business.
This should also be done alongside a ‘practical feasibility’ which checks to see if there are any ‘deal-breakers’ that would mean your business will not be able to start or succeed.
Process of a feasibility
There are lots of ways to undertake a feasibility study, but this guide purposefully starts with a relatively basic method. If you are starting a business with low costs or low-risk this might be enough. If you are spending a lot of money and/or pursuing something that is high-risk, then you might want to consider getting professional assistance.
How to use this business guide
This guide is purposefully broken down into stages so you can just do one or two of the steps at a time. You may want to use a feasibility template to help you but it’s not essential, and you could use word or excel depending on what you are most comfortable with.
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