Every great business idea starts with a vision. But between the initial inspiration and a successful company lies a crucial step that many founders overlook or underestimate: the feasibility check. This systematic evaluation process can make the difference between a thriving business and a costly failure.
In a time when 90% of all startups fail, it is more important than ever to thoroughly assess the feasibility of a business idea before investing time, money, and energy. A professional feasibility check provides the necessary clarity and confidence for well-founded business decisions.
What is a Feasibility Check and Why is it Crucial?
A feasibility check is a systematic analysis to evaluate the viability of a business idea or project. It examines various dimensions of an undertaking and answers the central question: “Can this idea be successfully implemented under the given circumstances?”
Definition: A feasibility check is a structured preliminary review that analyzes the technical, economic, legal, and operational aspects of a business idea to assess its likelihood of success.
The importance is obvious: Without a solid feasibility assessment, entrepreneurs often invest in ideas that are doomed to fail from the start. A professional check can identify such “dead horses” early on and free up resources for more promising projects.
Why Feasibility Checks are Indispensable
Risk Minimization: Early identification of potential obstacles and weaknesses significantly reduces entrepreneurial risk.
Resource Optimization: Time, money, and personnel are invested only in promising projects.
Investor Confidence: Well-founded feasibility studies build trust with potential investors and partners.
Strategic Clarity: The check process forces systematic consideration of all business aspects.
Core Elements of a Comprehensive Feasibility Assessment
A professional feasibility check includes various analytical dimensions that together create a complete picture of the business idea.
Market Feasibility
Market analysis forms the foundation of every feasibility assessment. It examines whether there is sufficient demand for the planned product or service.
Example Sock Subscription: “Are there enough people willing to pay 15-25 euros monthly for special socks? How large is the market for sock subscriptions in Germany?”
Key Questions of Market Feasibility:
- How large is the target group?
- What is the willingness to pay?
- How is the market developing?
- Who are the main competitors?
Technical Feasibility
The technical dimension checks whether the planned solution can be implemented with available resources and technologies.
Example Sock Subscription: “Can we handle monthly production and logistics for 10,000 subscribers? What technology do we need for personalization and shipping?”
Financial Feasibility
The financial analysis examines the economic viability of the business model and answers questions about profitability and capital requirements.
Important Metrics:
- Break-even point
- Return on Investment (ROI)
- Cash flow forecast
- Capital requirements and financing sources
Legal and Regulatory Feasibility
This area analyzes all legal frameworks and possible regulatory obstacles.
Example Sock Subscription: “What regulations apply to textiles and subscription services? Are all data protection requirements fulfillable? What warranty obligations exist?”
Operational Feasibility
The operational analysis checks whether the company has the necessary resources, skills, and structures to successfully implement the business idea.
Step-by-Step Guide to the Perfect Feasibility Check
Step 1: Idea Definition and Goal Setting
Before the actual analysis begins, the business idea must be clearly defined and the goals of the feasibility check established.
Concrete Measures:
- Detailed description of the business idea
- Definition of success parameters
- Determination of the analysis period
- Identification of available resources
Tip: Formulate your idea as precisely as possible. Instead of “I want to sell socks,” better: “I plan a personalized sock subscription service for style-conscious men aged 25-45 with a monthly revenue of at least 50,000 euros.”
Step 2: Market Research and Target Group Analysis
Market analysis is often the decisive factor for the success or failure of a business idea.
Concrete Analysis Areas:
- Market size and growth potential
- Target group segmentation
- Customer behavior and needs
- Competitive landscape
- Pricing structures
Practical Example Sock Subscription: A survey of 1,000 men aged 25-45 showed: 23% buy new socks at least once a month, 34% are dissatisfied with retail selection, and 18% would use a subscription service for 20 euros/month.
Formula for Market Potential Calculation:
Market Potential = Target Group Size × Purchase Willingness (%) × Average Revenue per CustomerStep 3: Financial Planning and Profitability Calculation
Financial feasibility ultimately decides the success or failure of the venture.
Key Calculations:
- Revenue forecast
- Cost analysis (fixed and variable costs)
- Break-even analysis
- Cash flow planning
- Investment requirements
Example Calculation Sock Subscription:
- Subscription price: 20 euros/month
- Product costs: 8 euros
- Marketing: 4 euros
- Logistics: 2 euros
- Contribution margin: 6 euros (30%)
- Break-even at 1,667 subscribers (with 10,000 euros fixed costs)
Step 4: Technical and Operational Feasibility
Here it is checked whether practical implementation is possible with the available resources.
Analysis Areas:
- Production capabilities
- Supply chains and logistics
- IT infrastructure
- Personnel resources
- Quality assurance
Step 5: Risk and Scenario Analysis
A professional feasibility check considers various scenarios and identifies potential risks.
Scenario Models:
- Best-case scenario (optimistic assumptions)
- Realistic-case scenario (most likely development)
- Worst-case scenario (pessimistic assumptions)
Risk Example Sock Subscription: Seasonality could lead to 40% fewer subscribers in summer months. Supply shortages of sustainable materials could increase costs by 15%.
Step 6: Legal Compliance Review
Legal feasibility is often underestimated but can be crucial for success.
Review Areas:
- Commercial law requirements
- Consumer protection regulations
- Data protection (GDPR)
- Product liability
- Tax aspects
Practical Example: Feasibility Check for the Sock Subscription Service
Let’s apply the theory to a concrete example. A founder wants to start a personalized sock subscription service for style-conscious men.
Market Analysis Results
Market Size: The German sock market has a volume of approx. 850 million euros annually. Subscription services grow by 15% per year.
Target Group: Men aged 25-45 with above-average income (3.2 million potential customers in Germany).
Competition: 3 established providers with about 50,000 subscribers combined, average price 18-25 euros/month.
Financial Feasibility
Calculation for 2,000 subscribers after 12 months:
- Monthly revenue: 40,000 euros
- Variable costs: 26,000 euros (65%)
- Contribution margin: 14,000 euros
- Fixed costs: 12,000 euros
- Profit: 2,000 euros/month
Break-even: Reached after 9 months at 1,714 active subscribers.
Operational Implementation
Suppliers: 3 potential partners for sustainable sock production identified.
Logistics: Cooperation with DHL for automated shipping possible.
IT Platform: Shopify-based solution for 299 euros/month sufficient.
Risk Assessment
Main Risks:
- Seasonal fluctuations (risk: medium)
- Customer acquisition more difficult than expected (risk: high)
- Supply shortages of sustainable materials (risk: medium)
Feasibility Conclusion: The project is fundamentally feasible but requires 75,000 euros startup capital and a strong marketing concept for customer acquisition.
Common Mistakes in Feasibility Checks
Excessive Optimism
Many founders tend to overestimate their market chances and underestimate risks.
Pitfall: “If we only capture 1% of the market…” – This mindset ignores the reality of customer acquisition and competition.
Solution: Work with conservative assumptions and validate all figures through market research.
Incomplete Cost Analysis
Hidden costs are often overlooked or underestimated.
Frequently Forgotten Cost Items:
- Marketing costs for customer acquisition
- Personnel costs during growth phase
- Quality assurance and complaint handling
- Legal advice and compliance
Missing Validation of Assumptions
Many feasibility checks are based on unproven assumptions instead of hard data.
“Customers will be willing to pay 25 euros for our subscription” – without validating this statement through surveys or tests.
Solution: Conduct customer surveys, create prototypes, and test critical assumptions before the final decision.
Overly Optimistic Scheduling
Most founders significantly underestimate the time required for implementation.
Realistic Scheduling:
- Market launch usually takes 50% longer than planned
- Official procedures and permits often take months
- Supplier search and negotiations are more time-consuming than expected
Ignoring Scalability
Some business models work on a small scale but fail when growing.
Critical Question: “Can we scale from 100 to 10,000 customers without fundamentally changing the business model?”
Tools and Resources for Professional Feasibility Checks
Digital Analysis Tools
Market Research:
- Google Trends for demand trends
- Statista for market data
- SurveyMonkey for customer surveys
Financial Planning:
- Excel/Google Sheets for basic calculations
- Specialized business plan software
- Break-even calculators
Competitive Analysis:
- SEMrush for online competition
- SimilarWeb for traffic analysis
- Social media monitoring tools
Involving External Expertise
When to seek professional help:
- Complex technical requirements
- Regulated industries (Fintech, Medtech, etc.)
- International expansion
- High capital requirements (> 500,000 euros)
Possible Consultants:
- Management consultants with industry expertise
- Tax advisors for financial aspects
- Lawyers for regulatory questions
- Industry experts and experienced entrepreneurs
Conclusion: The Path to Well-Founded Business Success
A professional feasibility check is the foundation for every successful company founding. It creates clarity about opportunities and risks, optimizes resource use, and significantly increases the probability of success.
Investing in a thorough feasibility assessment almost always pays off – either by confirming a promising business idea or by early identification of problems that save time and money.
The most important success factors:
- Systematic approach based on proven methods
- Validation of all critical assumptions
- Realistic assessment of opportunities and risks
- Inclusion of external expertise for complex issues
- Continuous review and adjustment of assumptions
But we also know that this process can take time and effort. This is exactly where Foundor.ai comes in. Our intelligent business plan software systematically analyzes your input and transforms your initial concepts into professional business plans. You receive not only a tailor-made business plan template but also concrete, actionable strategies for maximum efficiency improvement in all areas of your company.
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