Is A Feasibility Study Important?

At times, entrepreneurs are so excited about getting their business off the ground, that they fail to take the time to determine if the enterprise is viable and sustainable. Before you launch your new company, it's important that you determine how much it will cost to keep the business operational for at least the first six months. That's why cash flow projections, break-even analysis and income projections are so important. That's where a feasibility study comes to play, which helps you monitor the overall health of the enterprise. If your business is the sole source of income covering both personal and business expenses, you’ll need to generate enough business to cover both of these

expenses. For example, if business expenses total $5,000.00 and your personal expenses total $3,500.00, your total monthly sales should be at least $8,500.00. This is break-even, and if company isn't breaking even you’re operating at a deficit, a loss. Feel free to share your thoughts and opinions on this post regarding the importance of feasibility studies. Stay tuned. There’s more to come on this very important subject.