Groups sometimes confuse the role of two tools used in business project development-the feasibility study and the business plan. The feasibility study helps determine whether to proceed with implementing the business while the business plan spells out how it will be implemented. Each has common components. Assuming positive feasibility study results, much of its information is incorporated into the business plan.

The feasibility study is conducted during the deliberation phase of project development before financing is secured. It shows if the project concept can be viable. This analytical tool includes several scenarios for the group to use in determining if it continues the project. If, after completing a feasibility study, the group decides to not proceed, there is no need to create a business plan.

If the group decides to proceed, it prepares a business plan for project implementation. The plan serves as a blueprint not only for implementation but also for what actions the group will take during project operations. The business plan usually contains less emphasis on scenarios than the feasibility study. Typically, it highlights only the scenario selected by the group as the most promising. The business plan is much more focused on what action steps will be taken during and after project implementation.

The business plan is created after the feasibility study. Project details, which required assumptions for the feasibility study, have been decided. Standard business plans include details such as key management personnel, business location, the financial package, product flow, and possible customers.

The feasibility study should be an independent review of the project by one or more experts outside of the group. In contrast, the group itself typically develops its business plan internally, sometimes with the assistance of a consultant. It needs to be based on group members' vision for the business, since they will be the owners. The group revises the plan with information from bankers and investors once the project situation becomes more defined.

Although this difference is not as important for project development considerations, the feasibility study is only used prior to implementation. In contrast, businesses continue to use and revise their business plans after a project has been implemented. The feasibility study refines the group's initial ideas, while the business plan uses information from the study to further prepare the project to evolve into an operating business.