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Technical feasibility – lays out details on how a good or service will be delivered, which includes transportation, business location, technology needed, materials and labor.
The Technical Feasibility Study Must Support Your Financial Information
The order that you present technical information is not as important as making sure you have all the components to show how you can run your business.
You do not have to include specific financial information in the technical portion of your feasibility study, but all information in this component must support you financial data represented elsewhere. Basic things that most businesses need to include in their technical feasibility study include:
Materials
Labor
Transportation or Shipping
Physical Location
Technology
Calculating Material Requirements
In this section, you list the materials you need to produce a product or service, and where you will get those materials. Include information such as if volume discounts will be available as your business grows, or if you ever plan to manufacture your parts at some point in time.
Things to include in your list of materials:
Parts needed to produce a product,
Supplies (glue, nails, etc.), and
Other materials that are involved in producing or manufacturing your product.
You do not need to include actual financial data in this portion of the study but financial data supporting your narrative assessment should be included in a separate spreadsheet as an attachment.
Calculating Labor Requirements
You cannot run a business, offer services, or manufacturer Products for free. Even if you start your business with you as your only employee, at some point, if you plan to grow you will need to add to your labor pool.
In most cases, labor will be one of your biggest small business expenses. In this section, you will list the number and types of employees needed to run your business now, and that may be employed in the future as your business grows.
You can break labor into categories if necessary:
Senior Level Management
Office and Clerical Support
Production or Distribution
Professional Staff (i.e., lawyers, accountants, engineers, marketing)
Fulfillment (i.e., mail room, shipping department)
If you plan to outsource (hire another company to do a job for you) order fulfillment , fundraising, or other aspects of your company’s business be sure to list what functions will be outsourced and to where.
Transportation and Shipping Requirements
If you need to ship items from one place to another, how will you transport these items? Small items can be shipped via local carriers, DHL, USPS, but heavy or bulk items may need to be transported via a freight or trucking company.
If you are shipping perishable items, you will need special overnight handling. You may also need special permits to ship certain items, and nonprofits organizations should consider applying for discounted postal rates. These are all things that affect the technical, or “how” of moving your goods from one place to another.
If you offer services, how will trainers, educators, consultants, sales personnel get to customers and clients?
If you offer a product that is governed by state or federal law (such as medications or prescription medical supplies), do you need a licensed distributor or pharmacy to ship on your behalf?
In the Transportation Feasibility component, list things that will affect how you get your goods or services to other businesses or individuals, including:
The methods of transportation and shipping services that will be needed to get your product or services to a customer;
Special handling or other unique arrangements required to transport your product;
Any special permits that will be required, including postal rate discounts; and
Cars (company- or privately-owned) and other vehicles needed to conduct your business.
Physical Location of Your Business
Where you run your business will have an effect on your success. If you are starting out in a home based office, project whether or not, and when, you might need any of the following:
A “Brick and Mortar” Office ( Office spaces outside your home)
Warehouse Facilities
Your Own Factory
Your Own Trucking Facility
Any other purchased or rented facilities needed to conduct your business.
In the Physical Location Feasibility component, you should also discuss the pros and cons of where these facilities will be located. Should they be in one central location, or across state lines? Do you need to have special parking considerations for customers or trucks? Do you need to be near other facilities such as an airport, commerce center, or shopping mall?
Technology Requirements to Run Your Business
Every business needs at least some kind of technology to operate. The Technology component includes discussions about and a list of the following:
Telephone Answering Systems
Computer Hardware and Software
Inventory Management
Cash Registers, Credit Card Collection, Check Processing
Special Devices to Accommodate the Disabled
Teleconferencing Facilities and Equipment
Cell Phones, PDA’s, or Other Devices Needed to Conduct Business
Alarm or Camera Systems
Manufacturing Equipment
Summary of the Technical Feasibility Study
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