It seems like common sense, right; understand your customers, competitors, market, and costs before investing large amounts of money, time and resources in a strategy? You know what they say about common sense though - it’s not all that common!
Feasibility Studies allow businesses to objectively deduce the risks of a business idea through a combination of market research, business planning, and prototyping.
In general, a feasibility study will have several parts. Broadly speaking they should explore the commercial, the technical, and the financial areas of the business strategy.
The commercial section is where the bulk of the market research is conducted and should seek to answer questions like: how big is the market? who are your competitors and what are their offerings? Is there a gap in the market? where are the international possibilities? will potential customers become actual customers? Do others agree with the value proposition? Is the industry growing or receding? Are competitors about to release something similar?
In addition to the market analysis, there’s the technical feasibility. If you’ve got a physical product, building a prototype (or Minimum Viable Product – see the Lean Start-up again) is the universally accepted method to test a product’s viability. But there’s also exportability (my word, but it’s fairly self-explanatory). And what about Intellectual Property conflicts? There’s a lot to consider when you think about it.
Financial viability is the final part of a feasibility study. Sure, people love it, it works flawlessly, and your prototype video went viral. But can it make money? There are many hidden costs that can surprise you if you skip this step so a thorough business plan including detailed cost analysis are critical.
Sound like a lot of work? - luckily, there are supports available.
The Feasibility Study Grant: Supports for your Start-Up in Ireland
Ideas take money to get off the ground, and feasibility studies are not free (although they can save and make your business a lot of money in the long run). In Ireland, we are lucky to have an array of supports for businesses (which we will cover in another blog), some of which are specifically available to help with Feasibility Studies and start-up costs: the Local Enterprise Office (LEO) Feasibility Study Grant and Enterprise Ireland’s High Potential Start-Up (HPSU) Feasibility Grant.
The goal of the grants is to allow start-ups to explore how good their business idea really is.
How much aid gets granted?
The grants both cover 50% of any eligible feasibility study costs up to €30,000 – so a max of €15,000. Eligible costs include salaries (limited), travel costs, trade show costs, prototyping materials, and consulting fees. Getting 50% back on your start-up costs for 12 months is an incredible leg-up and applications should be entered by every eligible company.
The level of funding provided will depend on several factors including; the actual need for financial assistance, and whether or not previous funding had been awarded. Naturally, the awarding body must believe your idea is worthy of investment, and has future growth potential.
Feasibility Study Grants: how can I get them?
Both grants offer the same level of funding, but their eligibility criteria differ. The Local Enterprise Office Feasibility Study Grant eligibility criteria are:
If all of that’s true for your start-up, there is a fairly detailed application form (which we can help you with) that leads to an interview, before you can be considered for the grant. If you think your business is more eligible for a HPSU grant then get in touch.
If you are awarded the grant you’re going to need to contract the services of a consultancy who specialise in Feasibility Studies - this is where we come in; PRODIGEO Ltd. offer the most comprehensive and cost-effective Feasibility Studies on the market and a completely unique suite of end-to-end services for Irish start-ups and SME’s.
“This is it, the business idea that’s going to make us RICH. People will love it; it’ll fly off the shelves!”
– this statement might be followed by months hard work, a not insignificant sum of money invested and a product launch. However, when the results of the effort are less than anti-climactic and the sales a trickle rather than a torrent, the feeling of failure and of waste is confidence-denting.
People who are consumed with the entrepreneurial spirit, are quite often afflicted with something else I like to call “Entrepreneur’s Blinkers”. It manifests itself as an inability (or unwillingness) to see anything but the positive aspects of an idea, product or strategy. Often it can result in a start-up barreling towards a dead end without taking a breath... phew! Failing to gather information, research the market, test assumptions and validate ideas - I know this only too well as I too have worn the same blinkers in the past.
But don’t get me wrong, established SME’s can be just as susceptible to “Entrepreneur’s Blinkers” as any start-up.
Assumptions - the mother of all ...
As a species, human beings tend to lean toward positivity and ignore the negative (it’s called Optimism Bias) - this is especially true of entrepreneurs and serves us well in business but can also have its downsides. For example, we tend to make hypotheses and never test them.
(by the way, The Lean Start-Up has fantastic sections on the testing of hypotheses for start-ups)
Without testing these hypotheses, everything that we think about our product, our customers, and the market is just an assumption. But how do we test these hypotheses and validate our ideas?
This is where Feasibility Studies come in – essentially, they force the entrepreneur to answer the tough questions… well!