Differences between business plan and feasibility study
Anyone entering the business world needs to know what the differences between business plan and feasibility study. Hispanic Entrepreneurs below gives you the opportunity to know what each of these terms is based on so that you can distinguish them.
When setting up a company, various doubts arise, one of which is whether the chosen business idea is viable. This is when the business plan and the feasibility study are essential tools to verify if the business will be successful.
Differences between business plan and feasibility study
The first thing to make clear is that although they seem like similar terms, they do not mean the same thing. The feasibility plan is the study that is carried out before starting the business to verify its viability. That is, to know if it is favorable or not to develop it.
It is the previous step to the business plan, it must contain a presentation of the project, summary and comments. Determine what strategies can be implemented to help you succeed.
It serves as a guide for making decisions when starting a new business by indicating the benefits, risks, profitability and opportunity costs. In addition, it will allow already started to evaluate its development by detecting possible deviations.
While, el business plan it is a detailed description of the way the company is going to operate and how you will get the benefits. It should basically contain the objectives, strategies to achieve them, organizational structure, investment amount and solutions to future problems.
It also defines what products or services it offers, to which audience the offer is directed and who the competitors are. As well as the calculation of the resources necessary to start operations, how they will be invested and the profit margin that is expected to be obtained.
Another difference is that the feasibility study is based on calculations, analysis and projections of the business idea with an expiration date. It helps to know the space that the product or service will occupy in the market by understanding current or potential customers.
In addition, the competing companies, sources of supply, forms and conditions in which it will reach consumers. It is one of the most used in Marketing Intelligence to know the feasibility of the brand.
Instead the business plan is more about analyzing the environment and the market. Put the ideas in writing focused on meeting the needs of the public. It is used when it has been established that a business opportunity exists and that the business is about to start.
Other differences between business plan and feasibility study
The feasibility study allows to determine strategies to introduce a product or service by identifying places and the ideal time to do so. Likewise, it opens the possibility of knowing the market, its current and future trends that will guide us to make the necessary changes. Thus, in addition to the competitors, the factors that could benefit, alter and harm the business are identified.
It also provides better analysis of supply chains and networks, the work required, and having a cover letter to potential investors. This will lead to a clear understanding of the strengths, advantages, opportunities and risks to be faced. Achieving objective projections and reveals profit potential.
For its part, the business plan is made up of tactics and strategies that will be implemented to start and grow the company. Helps the entrepreneur to get the necessary initial capital through bank financing.
It also defines the stages for measuring results and the criteria for doing it. It allows the assignment of responsibilities, establish work programs and create the general financial framework of the business.