How do we do a feasibility study

Title : How do we do a feasibility study

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Collected : Manuel O.

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Feasibility studies

This briefing sheet will explain what a feasibility study is and how to go about carrying out your own. It will show you what your feasibility study should include to make the best case for your project. It will also be useful if you are thinking of applying to the Lottery for funding for a feasibility study for your project and gives tips for applying to the Lottery. Finally, it lists sources of advice and information you can consult for more help.

If you are preparing an application for funding from the Lottery or elsewhere, or planning a capital project, this briefing should also be useful to you.

In this Briefing your plans are called 'the project' whether they are a building project or the purchase of equipment.

If you are thinking of carrying out your own feasibility study, see sections 1 and 3.

If you need to do work before carrying out a feasibility study (pre-feasibility study), use sections 1 and 3 for your pre-feasibility study and section 2 on creating a brief.

If you are thinking of applying to the Lottery for funds for a feasibility study, use sections 1,2,3 for your pre-feasibility study and section 4 for help with your application. 

 Section 1

What is a feasibility study?

How do you know if your project will work?

Getting all the information you need to find out if your project will work is called a feasibility study. It will help you find out exactly what your project involves, how much it will cost and if it will work in the long run.

If you are planning a large project, a building perhaps or buying expensive equipment, you will need to gather a large amount of information about your organisation and your project. If you are applying for Lottery funds you will have to consider several searching questions before you can fill in the application form and present your case.

Feasibility work gathers all this information together.

Feasibility studies may include a history of your group or organisation, costings, legal and planning implications if it is a building project and details on how it will be funded, now and in the long term. The study may suggest other ways of tackling your groups' needs and help you see new opportunities for your work.

Feasibility studies are not a way of proving your idea is right, but about exploring the options available to you and suggesting the best course of action. A feasibility study may show that your project will succeed, but it may equally well make you realise that your project won't work.

Buildings and Equipment

Feasibility studies are most often talked about when a new building or changes to an existing building are planned, but they can be used for all kinds of projects from buying a minibus for a choir, to setting up a network of computers to link all your regional groups together.

If you are planning apply to the Lottery for equipment you do not normally need to carry out a feasibility study. Simply obtain quotations for the equipment you need and use these with the other information you have gathered to answer the questions on the application form. (See VAN Briefing sheets on Business Planning and From idea to application and VAN Lottery Guidance booklets: Business Planning and First Steps). If you are in doubt contact your Arts Council or Regional Arts Board for advice.

How much will it cost?

Feasibility studies don't have to be expensive and you don't need to apply to the Lottery for the money to get one done, although the Lottery will help fund feasibility studies. Much of the information you need you have access to yourself. If you need expert help on other aspects you may be able to persuade people sympathetic to your project to lend a hand at a reasonable cost. There are also other sources of funding for feasibility studies listed in the section Applying to the Lottery.

Feasibility studies are encouraged by the Lottery because they show you have thought through all aspects of your project. You can apply for funding towards the cost of a feasibility study and then apply again for the project. Applying for money for a feasibility study doesn't affect your chances of making a successful application to the Lottery for the project itself. For Lottery applications for projects over £1 million, a feasibility study is essential.

If you think you need a consultant or funding for a large feasibility study, get in touch with your Regional Arts Board Lottery officer, in England, or the Lottery officers at the Arts Councils of Northern Ireland, Scotland or Wales, who will advise you and may be able to help you find the right consultants.

If you have already started feasibility work

You may have already started working with an architect on your project. The architect may be undertaking initial work for you at no cost, on the understanding they will later be commissioned to do the work if you are successful in winning Lottery funds. If this is the case, stop and consider if you have met the Lottery's criterion for undertaking an appropriate tendering route for the project. The Lottery wants to be sure you have given the work to the best architect for the job and not just 'a friend of a friend' or another personal contact.

They want to see that you have approached more than one architect and chosen the best one for your project. This doesn't necessarily mean you have to choose the cheapest architect, although cost may be one factor in your choice, others may include whether they have experience of arts buildings, or if you feel you can have a good working relationship with them, or if you have worked with them successfully in the past. For very large projects (over £1 million) the Lottery will require you to run an architectural design competition or conduct competitive interviews with architects (contact your Arts Council Lottery Department/Unit for guidance on architectural design competitions, addresses are given in the section 5 Further information).

If you are already committed to working with an architect the Lottery will want to know how and why you chose them, so be prepared to explain your choice and show that you considered other architects as well. Otherwise you may find yourself with Lottery funding for a building, having to get quotes from other architects for the job, causing embarrassment and ill-feeling.

Section 2

Before beginning a feasibility study

Before you start a feasibility study you must find out what it is you want to know from the study. The work you do before a feasibility study is called a pre-feasibility study and the aim of this work is to write a set of instructions for the feasibility study, called the brief, setting out exactly what you need to know and what you want your consultant to do.

This section looks at the first stage of the ground work you will need to do, finding out about your organisation and its needs. Then it looks at an example of a brief for a feasibility study. If you are planning to get professional help with your feasibility study you should also carry out as much of the work in the next section, Section 3 The feasibility study, as you can for your pre-feasibility study, then draw up the brief for your consultant using the information you have collected.

Your organisation

The first step in preparing to undertake a feasibility study is taking a hard look at your group or organisation. What is it that you do? What is your vision for the group's future? Is the idea you have for a project the best one for your group, or are there others you haven't considered? There is a useful exercise to look at questions like these called brainstorming. This is a technique where you put your usual scepticism to one side and try and generate as many ideas as you can. Don't censor the ideas as they are generated, but write them all down, you will have a chance to sift through them and judge them later. It is useful to brainstorm to clarify the vision for your group as well as using it as a way of generating ideas for a Lottery application. You might also want to use it to take a fresh look at your ideas. If you have had them for a long time, they may be out of date. Communities change, needs change and people's interests change. Take stock of the current situation and review your proposal from this perspective.

Examine your needs

Before getting too excited about your project, ask yourself if you need it at all. This is especially important before investing time and energy in examining the potential for a building project. To be successful at winning Lottery funding you must demonstrate a real need for the project you are proposing, whether it's new instruments for a brass band or a new theatre complex for all the amateur drama groups in your area. As a first step, draw up a list of your current activities: what they are, how many people are involved and who (for example, age, gender, ability/experience) takes part. Then consider what sort of facilities or equipment these activities need to be carried out successfully.

Take each item you have listed and set out the positive and negative side of your present arrangements. To do this, involve the members of your group if you can, or at least some of them in addition to your management or executive group. They may have a different perspective and know more about what works and what doesn't. For example, you may find that the venue you use for rehearsals is very cheap, has plenty of parking and is next to another group who have equipment you can borrow from time to time. On the other hand, you may find it difficult to book because it is always in demand, you have to organise transport to and from the venue for your equipment and there is no access for disabled people.

Next, imagine your group five or ten years from now. What will you be doing? Will anything have changed? Repeat the exercise bearing in mind how your current activities may develop and change in the future. Again, be sure to involve members as well as management or executive. Many good ideas can be generated by your members, or by your potential users and you need to include them in your plans.

Compare the current situation with the future situation. This should help you work out what your most important needs are now as well as what they will be in the medium and long term.

This exercise should help you clarify your needs. If you still want to apply for Lottery funding, especially for a building project, but equally for any large project that will involve a substantial amount of money, the next step is to carry out your feasibility study (go to Section 3), or pre-feasibility study if you think you will need professional help.

Pre-feasibility studies

The aim of a pre-feasibility study is to create the brief for your consultants telling them exactly what you want to find out from the feasibility study. The work you will need to carry out will be more or less the same as the work outlined in Section 3 for a feasibility study. A pre-feasibility study should show that your project is likely to work and highlight the areas where you need professional guidance and input to find out how, exactly, it will work. A pre-feasibility study might determine, for example, that there is a need for the new voluntary arts centre you are proposing and that it is likely to work in the long term, but you need specialist help in choosing between several potential buildings that could be converted. Drawing up the brief for a feasibility study

Your brief sets out the areas you need information on to find out if your project will work. The exact questions you will need to include on the brief will be determined by the nature of your project, but you will probably want to consider:

where is the best place for your project

what kind of building would best suit your project (if it is a building project)

how much your project will cost

how much income you will generate from your project and where additional sources of funding will come from

how long it will take before your project is finished

how the project will be managed

how the project will be marketed

 Example

Here is an example of a brief for a feasibility study. The project was to move a famous artist's studio to the place of his birth and create a arts centre based on his work with his studio as part of the centre. Although this is an unusual project, it shows the type of questions the organisation needed answering by the feasibility study, before deciding to go ahead with the project.

The consultants were asked to prepare a feasibility study to find out:

if it was possible to move the studio and rebuild it on a different site

the implications and costs of moving the studio

how the studio could be presented and promoted to the public, either on its own or as part of a larger development

the purpose the studio would serve in celebrating the work of the artist

the management, operations and marketing of the studio and related attractions

the amount of capital and revenue costs needed and where they would come from

the overall desirability of proceeding with the project. Section 3

The Feasibility Study

What should a feasibility study include?

There is no fixed list of contents for a feasibility study. Basically the study will have to find out if there is a need for the project and if it is, and will be, financially viable. It is useful to think of the information you will have to collect under the following broad headings:

A Your vision: exactly what your organisation or group is and how you see it developing

B Your market: who will use the equipment or building you are planning to buy, where they will come from and how much they are prepared to spend to use your facilities/resources

C Your capital needs: what equipment or building you need to carry out your work and take your organisation or group forward into the future

D Your business plan: what your financial position is at the moment and how it will change over the next five years as a consequence of the project.

Your vision

Your feasibility study should give the background to your group or organisation, saying when and how you were formed, what you were set up to do, what you do now and how your work has developed over the years. It should also show how you see your work developing in the short and long term future, looking at membership patterns, your place in the community in relation to the other arts groups and facilities that are available. In this part of the study you put your group into a larger context and give those reading the study a clear idea of who you are, what you do and where you are going.

Your market

When you consider the market for your project you will be looking to see if there is a need for the project. Analysing your market will help you find out who will use your project and where they will come from. Funding from the Lottery is intended to increase participation and enjoyment overall, so it is important to see if your project will bring new people to the arts, rather than attracting participants from other people's projects and events. There are several key issues you must consider here.

Is there a demand for the project and who will use it?

You will need to carry out some research to find out if there is a need for what you propose and who your potential users will be. To find out if there is a need for what it is you are proposing there are several things you can do. First of all get in touch with your local authority (council) arts officer. They will know what other groups exist in the area and will be able to advise you on your role in the local arts scene.

They will also be able to help you get access to demographic (population) information on your area, perhaps by asking the economic development department, to help you build up a picture of the type of people in your community and the provision of other cultural or arts facilities. You may well find there are very few other facilities and your group or organisation provides a rare opportunity to participate in the arts.

The Arts Council, or the Regional Arts Board for your area in England, will also help you put your work in a wider context by telling you about other arts facilities and groups in your region offering similar opportunities as your group. You may find you are the only group offering a particular resource in your region.

Another way of assessing need is by looking at your membership. Who are your members? Where do they come from? Are your numbers shrinking or growing? If you have had any membership campaigns what were the results? Are there potential members you haven't reached yet? You may also want to look at other groups or organisations who may want to use your project. Their membership could become potential users of your proposed project and help demonstrate that there is a need for it.

Who are the potential user groups?

Your project or your group may set out to target a particular group in your community, such as older people, disabled people, young people, single mums, or others. Or it may attract a wider range of potential users. You will need to find out who your users are and what their characteristics are.

When you know who your users are, you can use this information to look at other arts facilities and consider who their users are. Are they different from yours or the same? Does any arts facility cater for the same user group that you do in your local area? How far away is it? Can you identify any gaps in the provision of arts facilities for your user group? Hopefully you will be able to show your project will play an important role in meeting this need. You can also use information on your users to identify new user groups you may want to attract to your group or organisation's project.

What is the catchment area?

The term 'catchment area' is used to describe how much of the area around your project your participants or audience can be drawn from. For example a large theatre might attract audiences from as far away as 30 miles, whereas a small community theatre may attract audiences from a much smaller area. To find out where your audience or participants come from you will need to ask them. You can do this by asking your membership, or asking people attending an event how far they have travelled to see it. If you have mailing lists of members, participants or people who have attended your events, you will be able to gather this information from these lists.

You will also need to consider how easy it is to get to your project: is it well served by public transport, is it easy to reach by road, is the area felt to be safe to walk around in, is it easy to park close by?

Your capital needs

What kind of arts facility or equipment do you need? By taking into consideration your vision and market you should be able to identify your main needs for equipment or for a building. The following key points must be addressed if you are considering developing a building project.

What kind of arts facility is needed?

By identifying your main users you may find that the kind of arts facility needed is obvious. You may also find that you will need several different kinds of facility to cater for your different user groups. Your main activity will determine what facility you will need, but you may also want to include other uses to enable you to meet your running costs in the long term (revenue costs). For example, you may wish to include rooms that can be hired out to other organisations, or facilities such as a bar or café that can generate income.

It is important that each of the proposed uses is identified so these specific requirements can be met by the building. Simply stating you need a 'multi purpose' space without saying exactly what this will involve, may not help you meet the needs of the users you are hoping to attract. You need to be clear what their needs are and how your building can best meet them.

It is also important to consider how your building will be able to change and develop as your organisation changes and develops over time. How will your proposal respond to future developments and trends, as well as meeting existing need?

You will also need to consider what approach you want to take to your artform activity. Do you need informal or formal spaces? Do you want to create an intimate atmosphere or a more impersonal one? Is your work traditional or experimental? How will this affect your requirements?

Why do you need a building?

What is motivating you to build? Do you need a building? Has an opportunity arisen, such as a building become available, that has inspired you to look at this project? Even if you are sure that a building is the answer to all your problems it is worth taking the time to find out if a building is the only answer or if you have other options. In general a building could be considered if:

You have lost your existing facility. If you are being forced to move it is a good opportunity to look at how you might best meet your future needs.

There is a gap in provision. Some rural areas have no facilities for the arts, other areas may not have provision for a particular art form, such as dance. Or there may be a gap in the provision for a particular group in the community, for example disabled people. Even if you identify a gap, you must still show that there is a market for your proposal in the gap: it could be there for a reason!

Existing facilities are poor. In this situation you may want to consider upgrading the facilities rather than starting from scratch.

New opportunities arise. A building may have come onto the market that you believe is ideal for your work. You will need to make a careful assessment of exactly what the building has to offer, if it is suitable for your needs and how it will be run and financed.

What size and type of building is needed?

The type of building you propose must to be related to the people you expect to use the building and their needs. You could consider something purpose built, the conversion of an existing building or improvements to your existing building, for example an extension or provision of disabled access. The size depends on what activities the building will be used for and the number of people participating or in the audience. You will need to find a balance between the size of the building, the running costs and your expected income including additional income you intend to generate from the building.

Is there scope for co-operation?

Links with other organisations, like schools for example, can widen the range and use of the facility you have in mind by adding in other compatible activities. It could also be worth while joining forces with other similar groups in your community to build one building that you can all share. Also consider other ways you can use your building to generate additional income, for example, conference facilities, shops, meetings, social events.

If you are thinking of including these additional, income generating facilities you should examine the market for them and make sure there is a need. You can do this by considering the points made earlier about marketing and also looking closely at other facilities doing the same thing within your catchment area. Will you be able to compete? It is also worth talking to people who run bars or cafés or other facilities as part of their building to find out how much money they make. Your business plan Your feasibility project will have to consider what your project will cost and how it will be financed. The question of finance is central to the whole process of planning, designing and building a new arts facility, or other projects that require large amounts of money. You will need to consider two things:

How you will meet the cost of buying the building or other capital assets involved in your project. This will include the costs of planning, designing and building or buying and installing equipment.

How you will meet the cost of running and maintaining your new project.

You will need to examine cashflow as well as simply the costs involved. To do this you will have to carry out a detailed business plan for your project. Read VAN Briefing, Business Planning, or VAN's Lottery Guidance Document Business Planning, to get you started. You may also want to enlist the help of an accountant, or seek advice from your Regional Arts Board in England, or your Arts Council in Scotland, Northern Ireland or Wales.

Your business plan will be the key to answering the question ³will it work?². You must make sure you include all your costs and base your future forecasts on your present situation, this means basing your expected income on your present income. It may be tempting to use wishful thinking, but you must make sure the assumptions you are making are reasonable and based on your current situation. For example, if you are forecasting the income generated from a café in your building, get information from a similar café in a similar facility to check you are not being over-optimistic. 

An example of the contents of a feasibility study for a new building

Introduction

Summary of main points

The project

The proposed project

The demand for its facilities

The potential sponsors

The future of the organisation Finances and management The users, who they are, where they are from and how many there are

The building and site

The selected building (or site)

History of the building (or site)

Ground conditions and services

Planning permission and highways

Location for customers or users

Designs and cost

Sketch designs or options

Works of repair or rehabilitation

Special conditions, for example listing

Outline costings

Capital funds

Capital funds for purchase and building works

Overall costs, including legal fees, removals, start up costs

Potential funders

Special requirements from funders

Financial and contractual details (for example VAT)

Phasing of the project, for example to the availability of funds

Revenue funds

Revenue expenditure to run the building

Revenue income, from customers, users or grants

Feasibility of activities within the overall project

Margins of error (for example, what if grants run out)

Future management and legal questions

Programme

Timescale for fund-raising, design and construction

First and future phases of the project

Marketing and public relations plan

Next steps (for example planning permission or fund-raising)

Appendix

Relevant background information and detail for all of the above. (Taken from: RIBA Community Architecture good Practice Notes, No.1 Feasibility studies: a guide to good practice) Section 4

Applying to the Lottery

If you think you need the help of experts in carrying out your feasibility study you can apply to the Lottery for funds. If you do, the same rules apply to the lower limits of grants awarded, £5,000 in England and Scotland, £2,000 in Northern Ireland and Wales. In England and Wales you will have to find 25 per cent of the cost of the study from other sources as partnership funding, in Scotland and Northern Ireland you will have to find 50 per cent of the cost of the study from other sources.

To apply for funding for a feasibility study you must show that enough initial research work has been done to show there is a need for the feasibility study. The research you carry out will form the basis of a detailed brief which will set out exactly what you want the feasibility study to achieve. In Wales the Lottery guidelines say that applications for feasibility studies will be assessed on the basis of:

³a pre-feasibility study justifying the more thorough examination of the proposed project through a detailed feasibility study. The pre-feasibility study, which should not usually require costly consultancy work in its preparation, should define the purpose of the project, make a preliminary assessment of the market and demand, outline the case for building and the size and type of building needed, include preliminary rough estimates of capital and revenue implications of the funding requirements, identify possible partners and indicate an outline timetable for the project.²

Scotland and Northern Ireland have also published guidelines, in England guidelines are presently being prepared.

What can you include in the cost of the feasibility study?

You can include professional fees, such as architects, quantity surveyors and arts consultants. You may include an architects fees for taking your proposal to design stage, this is known as RIBA stage C and sometimes, if it is a big scheme, architects fees for taking the design to stage D (detailed design). Check with your Arts Council Lottery Department.

Tips for applying to the Lottery for a feasibility study

If you are successful in winning funds for carrying out a feasibility study it is not an indication that the Lottery will fund the project, but it will not spoil your chances of success in applying for Lottery funds for the final project.

For a feasibility study you will need to find at least 25 per cent in England and Wales, and 50 per cent in Scotland and Northern Ireland, of the cost of the study from other sources. This can be funding in kind, donations or cash.

If you have already undertaken a feasibility study before applying to the Lottery for your project you can include the cost of the study as part of your partnership funding for the final project.

For building projects, the Arts Councils of Northern Ireland, Scotland and Wales have published specific guidance on feasibility studies. The addresses of the Arts Councils are given in the section 5, Further information.

In Northern Ireland, Scotland and Wales there is a separate application form for applications for feasibility studies. In England you will have to apply on the same form as people applying for funding for their entire project. You must still fill in all of the form and answer all the questions fully, don't be tempted to put 'not applicable'. You will be scored for each of the criteria for Lottery funding (see VAN Lottery Guidance Document First Steps with a Lottery Application). Indicate on the form, for example how you intend to work with artists and craftspeople in the final project, and find similar ways of answering other questions that do not seem to be relevant to a feasibility study. You are advised to seek the help of your Regional Arts Board Lottery Officer in England, or Arts Council Lottery Officer in Scotland, Northern Ireland and Wales, if you intend to apply for funding for a feasibility study. 

Other sources of funding:

As well as the Lottery you may also get help with funding the study from other sources, including:

RIBA Community Projects Fund

Grants for feasibility work of up to £1,000. Tel: [phone]

City Challenge funding

You can sometimes get funding for feasibility work if you live in a City Challenge area. You should contact your local City Challenge office. Your Local Authority will know if you are in a City Challenge area.

Foundation for Sports and the Arts

Tel: [phone]

Business in the community and Professional Firms Group

Sponsors professional firms to provide free or low cost services to community groups. Tel: [phone]

Contact your Local Authority

They may have funds to help you pay for a feasibility study.

For example, Newcastle-upon-Tyne City Council are presently offering grants of up to £2,000 to voluntary organisations seeking to carry out feasibility studies. Section 5

Further information

RIBA Community Architecture Group, Good Practice Notes No. 1 Feasibility studies: a guide to good practice.

Available from Community Architecture Group Royal Institute of British Architects 66 Portland Place London W1N 4AD Tel: [phone] Price: £2

Arts Council of Wales Lottery Unit, Feasibility Studies and Architectural Design Competitions: Information and Guidance Notes. Available from: ACW Lottery Unit Museum Place Cardiff CF1 3NX Tel : [phone] Free to potential Lottery applicants in Wales

Addresses of Lottery Arts Fund Distributing Bodies

Scotland Lottery Department Scottish Arts Council 12 Manor Place Edinburgh EH3 7DD Tel: [phone]

Northern Ireland Arts Council of Northern Ireland Lottery Department 185 Stranmillis Road Belfast BT9 5DU Tel: [phone]

England The Arts Council of England Lottery Department 14 Great Peter Street London SW1 3NQ Tel: [phone]

Wales The Arts Council of Wales ACW Lottery Unit Museum Place Cardiff CF1 3NX Tel: [phone]

North Wales Office Tel: [phone] Regional Arts Boards Lottery Officers

East Midlands Arts Tel: [phone]  Jan Ford/Marian Tucker Eastern Arts Tel: [phone]  Fred Brookes/Lori Kimaszewska London Arts Board Tel: [phone]  Andrew Farrow North West Arts Tel: [phone]  Jennie Kendal Northern Arts Tel: [phone]  Dianne Fisher South East Arts Tel: [phone]  Becca Mitchell South West Arts Tel: [phone]  Chris Butchers Southern Arts Tel: [phone]  Peter Taylor West Midlands Arts Tel: [phone]  Philip Thompson Yorkshire & Tel: [phone] Humberside Arts Andrea Brenner

Acknowledgements

This briefing sheet has drawn on the following material: Arts Council of Wales, Lottery Unit, Feasiblity Studies and Architectural Design Competitions: information and guidance notes.

RIBA Community Architecture Group, Good Practice Notes No. 1, Feasibility Studies: A guide to good practice.

East Midlands Arts, Briefing, Feasibility Studies. West Midlands Arts, Briefing, Feasibility Studies.

منبع : http://www.voluntaryarts.org