If you’re thinking about turning your jam-making into a business, for example, you should carefully identify other possible alternatives to this venture before you decide to jump full steam into a feasibility study. For example, have you considered simply selling your apples at the market? You can even join the business accelerator programs offered by local colleges. [4] X Expert Source Madison BoehmBusiness Advisor, Jaxson Maximus Expert Interview. 29 September 2021.
Before you decide to invest the time and money into a complete feasibility study, you need to realistically assess whether or not there is a need or demand for your idea. Try out a minimum viable product and get feedback about it. [5] X Expert Source Madison BoehmBusiness Advisor, Jaxson Maximus Expert Interview. 29 September 2021. If there is a demand for it, you can proceed to study the idea in more depth. If not, then you can move on to your next idea. [6] X Research source If you’re hoping to sell locally, visit grocers and survey their shelves: if they have a paltry or non-existent display of homemade or organic jams, this could mean that there is no demand for the product. Similarly, if no or very few vendors at the farmer’s market offer jam products, it could be because buyers aren’t interested. If you’re hoping to sell online, you can do a key word search for your product and pay attention to the initial results: if it seems like a lot of people are doing brisk business, it’s possible that there’s demand for your product. You’ll later have to determine if you will be able to compete.
For example, even if your town has an active farmers’ market, if there are ten other vendors who are all selling their homemade jams, jellies, and spreads, you’re going to have to think about whether or not you’ll be able to compete or offer consumers a different, more appealing product. Similarly, if you’re hoping to sell online, you want to begin to get an idea about how many other people are selling similar products, or if there’s a leading brand that dominates the market. Will you be able to compete? Begin to think about ways you can aim for a special niche market. [8] X Research source
For example, if you have a pet that comes into your home at any time of the day, you cannot manufacture food for sale in your home. [10] X Research source You will thus need to prepare your jam in a separate structure. If there’s no way you’ll be able to meet these requirements, come up with the necessary funds, or tackle the associated remodeling, then it’s probably best to put this idea on the back burner for now.
Thoroughly research your need for expert consultations, and learn what their fees will be. You will either need to make sure to budget enough to cover these costs, or if the costs are too high even at this stage, you may not want or be able to continue with the study. You want your final report to be as objective as possible, so make it clear to whomever you hire that you want honest answers, and that you’re not hiring them to give you the answer you want. [11] X Trustworthy Source Iowa State University Extension and Outreach Iowa State University’s Extension and Outreach program dedicated to educating and engaging communities Go to source
Is the report due to your potential investors, your boss, or the city council by a certain date? If so, work backwards from the due date and make firm deadlines for when the individual phases of the study need to be completed.
If you’re hoping to sell your jam, get out there and talk to vendors and shop-owners about where they get their merchandise and how much business it brings in for them. For example, see if the vendors at the farmers’ market are willing to talk to you about their experiences—are they able to make a full-time living selling their goods, or is this a hobby or side business? Perhaps you’ve identified a number of local shops that are willing to sell locally produced items; you’ll want to learn about what their best-selling items are, or if they sell less of particular items at certain times of the year. For example, do they see spikes in sales around the holidays, but a big drop-off in January? You want to try to find out how steady your sales might be.
Business owners are asked about their sales, number of employees, business expenses and types of products, among other things. [13] X Research source You can find the results of the most recent Economic Census online, and customize your search to learn as much as possible about your area of business, the market for it, and your community in particular.
For example, see if customers at the farmer’s market are willing to complete a survey or be interviewed about their buying habits and preferences—perhaps in exchange for a free sample of your product.
Depending upon your audience, you may get better results by conducting telephone or email surveys. You can also direct people to a web-based survey by using social media like Twitter or Facebook.
For example, if you want to sell your jam, be sure to ask who typically buys jam in the house-hold, and who it is bought for (is it for their kids, for example?). Ask what their favorite flavors are, whether there are other flavors they’d like to try but have never found, and how much they are willing to spend. Ask them as well about what they like about their current brand: the color, the consistency, the company that makes it, etc.
For example, if you learn that a local company dominates the jam market and if the results of your interviews and surveys have shown that customers are very loyal to that brand, you may want to consider moving on to your next great idea. If you haven’t already, be sure to use the information from the most recent Economic Census. [17] X Research source
For example, will you be able to serve the 10% of people who indicated that they would prefer an organic jam option? What will that translate to in terms of how much jam you’ll have to produce?
For example, you may need an office space to serve as headquarters for your business operation or project, or you may need land with special features, if for example, you are planning to expand your orchard for your business. Make sure that you have access to the space and facilities you’ll need, and research any leases or permits that you’ll need.
What are your staffing needs? What qualifications will your staff need? Are there qualified people available to hire or recruit to volunteer? How do you see these staffing needs changing as the business grows or as the projects unfolds? Will you need a board of directors? What will their qualifications need to be? Who would serve on it?
What raw materials will you need? From where will they be sourced? For example, will you be able to grow all of your own fruit or will you need to purchase it in bulk from a separate grower, especially in the off-season? How much sugar and pectin will you need on a regular basis? Will you have to drive to a wholesaler to get these, or can they be regularly delivered? You should also think about the smaller details such as the materials you’ll need for packaging and delivering your product, if you are creating something to be sold. Also, don’t neglect to include such necessities as office supplies.
Make note of whether or not you’ll be able to comparison shop for your materials, or if you’ll be tied to getting your supplies from a single source.
For example, even if you aren’t planning on opening up your own storefront and are instead hoping to sell your product online, you’ll need access to a reliable computer, a quality camera, and perhaps software to manage your orders and billing/payment information.
For example: what equipment will you have to purchase or lease? Will you need land or special buildings? Do you need special tools or machinery? Determine exactly how much all of this will cost. Your start-up costs are those that you’ll have to cover to get off the ground, but which (typically) won’t be regular expenses once the business or project is underway.
You should also include information about whether or not you see your revenue stream remaining steady or growing over time. To be able to calculate this, begin by carefully outlining your fixed costs (what you will always have to spend on rent, supplies, salaries, etc. ). You can then calculate both a conservative and aggressive prediction about your profit growth. [19] X Research source The conservative model will estimate slower growth with possible increases in your fixed costs, whereas a more aggressive model is more optimistic—how much might you be able to expect to grow if demand for your product increases steadily and your operating costs stay relatively stable?
How many people will benefit from the service, and in what ways? You should be able to use the results from your surveys to help you answer these questions. For example, if you’re studying the feasibility of a new park, you would have earlier asked residents questions about how often they visit parks, why they visit them, and whether or not they thought they’d utilize them more if current parks were redesigned or if new specialty parks were built. You can use all of this to estimate the longer-term impact the project would have on the town.
For example, do you have savings upon which you can draw? Will you need investors, and if so, have you identified them? Will you need to secure a bank loan? Have you been pre-approved?
Subtract all of the outlined costs from your anticipated revenue in order to determine whether you’ll be able to cover your start-up and operating costs and turn a profit. You should then be able to determine whether or not the profit margin is wide enough. Even if the project isn’t concerned with making money, you still need to crunch the “numbers”: given the amount of time and effort that will be involved, will enough people benefit in the long-run to make this project worthwhile?
Gather together your surveys, the evidence brought in by any of your team-members or hired consultants, your budget, etc.
Will you have enough of a financial cushion to be able to handle the inevitable set-backs? For example, even if you’re able to afford new kitchen equipment for your jam making business, chances are good that at some point you’ll need to pay for repairs. Similarly, will your business be able to survive a bad growing season? If your numbers are too tight even before you consider these unexpected (yet usually inevitable) set-backs, you should probably hold off.
Once you estimate the profit you’ll make from your business, determine whether or not it will it be able to cover your living expenses. Again, you should remember to factor in unexpected costs, such as needing to pay for car repairs or medical emergencies.
You may have just been tasked with organizing this study, and the decision to give the project a green light may be up to someone else. Even so, you should do your own analysis based on the findings so that you can include your conclusions in the report.
Even so, you’ll want to have your findings clearly organized and written for your own future reference, and it’s quite likely that your potential investors will want to study your report as well. If you were tasked with completing this study for someone else—perhaps by your company or by a city department—you’ll need to make sure it gets to the right people in a timely manner. If it’s your responsibility to report upon your findings, make sure that you practice your presentation, and have professional looking hand-outs and/or visual aids so that your audience can clearly follow your process and see how you arrived at your final conclusion.
