Feasibility studies

The final stage in developing new income-generating opportunities in a TREE program is to complete a detailed feasibility study for those products or services which have been carefully reviewed and selected as having the most potential. The goal of a feasibility study is to decide whether the activity can be sustainable and generate reasonable income when carried out at the scale and in the locations where it is intended. Many well-intentioned income-generating activities fail over time due to lack of demand, finance or other factors. The feasibility study will help anticipate if this is likely.

The feasibility study investigates two elements in detail:
  • Financial aspects: inputs, revenue, capital required
  • Non-financial aspects: technical, administrative, social
As well, the TREE feasibility assessment looks at the wider economic and social impacts of the activity on the community.

The feasibility study considers the following elements:
  • Market analysis: assessing issues of supply, demand, competition, customers and price.
  • Financial: capital required for start-up, ongoing costs of loans and overall profitability.
  • Business plan: assessing cost of initial investment, cost of inputs (labour, equipment maintenance, raw materials, transport, storage) and realistic assessment of revenue (based on expected price and volume of sales)"
  • Technical assessment: focusing on the methods of production and the required skills. This is the basis for the training needs assessment.
  • Administration and management: assessing the skills and capacities needs to run the activity. This will inform both training and post-training support needs.
  • Social factors impacting feasibility: this includes any barriers related to gender, age, disability, or ethnicity that might prevent some members of the community from participating. This helps identify needs for broader family and community engagement and support.
  • Conflict sensitivity risks, for example of some community members feeling threatened by or otherwise being against a potential approach, for economic or social reasons connected to conflict.
Note that the ILO has developed a market systems analysis approach involving national and international consultants in the assessment. TREE programs usually rely more on local resources and expertise.

The feasibility study would be carried out by persons with expertise in this area, under terms of reference established by the local TREE advisory committee and in consultation with the committee and other relevant stakeholders.

Results of the study would be presented to the local advisory committee, which would make the final decision on proceeding with an activity and the associated training. Necessary training is developed as described in Training needs assessment