The purpose of a feasibility analysis is to determine whether time and finance should be invested in a proposed project or idea. This is an important preliminary step in the development of a business concept, and ideally takes place before a full business plan is developed. Professionals evaluate many aspects of the proposed project and introduce several scenarios before making an assessment. Some of these aspects include the market environment, legal issues, environmental concerns, risk factors, and sales strategies.
A business feasibility analysis sometimes investigates feasibility based on the Dimensions of Business Viability Model: market, technical feasibility, business model, management model, economic and financial models, and exit strategy. Professionals may also use such traditional strategies as the SWOT analysis, PEST, and Porters Five Forces. The results of a business feasibility analysis are compiled into a formal report to facilitate decision making.