By Dr Arash Ardalan · · 3 min read
Key idea
Market research provides evidence about customers and demand. A feasibility study combines that evidence with costs, capacity and risks to assess a specific proposal.
Two questions that work together
The studies often overlap. A feasibility assessment may identify a crucial assumption about demand that needs additional customer research. A customer survey may reveal interest in a service that is expensive or difficult to deliver.
| Aspect | Market research | Feasibility study |
|---|---|---|
| Main question | Who needs this, and what would they buy? | Can this particular venture work? |
| Evidence | Customer needs, behaviour, alternatives, pricing and competitors | Market evidence, costs, capacity, delivery requirements and risks |
| Typical output | A clearer view of customers, demand and positioning | Scenarios, break-even estimates and a reasoned recommendation |
An illustrative break-even example
Imagine a service charging £50 per customer, with variable delivery costs of £20 per customer and fixed monthly costs of £3,000. The contribution per customer is £30, so the simple break-even point is 100 customers per month. These figures are hypothetical and are not ezyStat prices.
The calculation is useful only if the assumptions are realistic. Market research helps assess whether 100 customers would pay that price. Feasibility work also tests whether the service can deliver to them, how quickly they can be acquired and whether cash is available before revenue arrives.
Break-even customers = fixed costs / (price − variable cost) = £3,000 / £30 = 100
Test assumptions and uncertainty
- Define the decision: launch, expand, change the offer, run a pilot, or stop.
- Identify the assumptions with the greatest effect on the outcome, including conversion, price, costs and capacity.
- Collect evidence from the relevant customer population and credible external sources.
- Model cautious, central and optimistic scenarios, and explain what would change the recommendation.
- Distinguish expressions of interest from evidence of willingness to pay.
Choose a proportionate first step
A short scoping exercise can establish which questions require research and which can be answered from existing records. A small pilot may test a critical assumption before a larger study is justified. The final report should show where the evidence is strong, what remains uncertain and which decisions can reasonably follow.
Further reading
- Business.gov.uk: testing and validating a business idea (opens in a new tab)
- NI Business Info: essential information in a business plan (opens in a new tab)
This guide provides general information. A study plan or business recommendation should reflect your own data, design and circumstances.
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