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Feasibility Study Course Lesson 5 – Organizational Structure Feasibility Study

How to Write a Small Business Organizational Structure Feasibility Study

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Purpose of an Organizational Feasibility Study: To define the legal and corporate structure of the business. An Organizational Feasibility Study may also include professional background information about the founders and principals of the business and what skills they can contribute to the business.

Your organizational feasibility study should include:

  • Description of Your Business Structure
  • Description of Your Organizational Structure
  • Internal and External Principles and Practices of the Business
  • Professional Skills and Resumes

Description of Your Business Structure

This section contains a narrative description of the legal requirements for establishing your business and why you feel this is the right structure for your business. Discuss the pros and cons of different business structures.

For example, a sole proprietorship leaves the sole proprietor open to both financial and legal liability risks. A high-risk business should never be set up as a sole proprietorship because it will make it difficult to attract investors as well as clients and customers. It is also the hardest and most expensive form of business to insure.

If you wish to become a tax-exempt organization, you will need to incorporate, file for tax exemption with the IRS (and, in some cases, within your own state), and set up a board of directors and officers of the corporation. You will also need to decide if your organization should be a membership, or non-membership organization.

Organizational Structure

Discuss your business’ organizational structure. One of the best ways to present this information is with an organizational chart.

An organizational chart shows the hierarchy, or chain of command in your business. It lists key positions and subordinate positions under department heads, supervisors, and managers.

Principles and Practices of the Business

Every business should have a published code of ethics and principals that govern how the company conducts its business. In this section, include both internal and external principals of operations.

Internal Operations Business Principles and Practices

  • Businesses that are incorporated must have a board of directors. Do you have a conflict of interest policy in place? Will you use “Robert’s Rules” for conducting meetings?

  • Do you offer services where clients need to be screened for eligibility for financial aid, social services, or are there other pre-requisite requirements such being a senior citizen, minority, or disabled?

  • Do you have hiring and employee training and management practices in place?

  • Do you have an overall corporate philosophy that inspires, encourages, or offers incentives to employees?

  • Do you have an anti-discrimination policy in place?

External Business Practices and Principles

Do you have a customer policy or philosophy? Examples of client/customer philosophies include:

  • We do not serve clients; we team with clients to meet their goals.
  • We value creativity and imagination and use these to our client’s advantage.
  • Our employees maintain high ethical standards that reflect on how we treat our clients.

Professional Skills and Resumes

A business’ strengths come from the talent, skills, and experience of those running the company. In this section, you give a brief overview of all founders, employees, and partners involved in the business that will be contributing their skills and input into how the business is operated. You should also include any board members, directors, and officers.

Include in your list of principals (most important people in your business or organization), a brief overview of how their particular skills will serve the business. You can also include accomplishments that relate to the business.

It is also beneficial to attach resumes for at least the top three principals listed.

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