Most successful entrepreneurs will tell you that conducting a feasibility study is vital in that very first stage of developing a business. But if we’re honest, how many of us actually understand what a feasibility test really is? Not all entrepreneurs are experts on research and market analysis, so here is a quick guide to the importance of verifying the validity of your start-up.

A Business Feasibility Study is an integral part of the start-up stages of a new company. Without conducting a feasibility study you could be walking blind into a market with a product or concept that is just not commercially viable. According to Women in Business, Feasibility studies contain comprehensive, detailed information about your business structure, your products and services, the market, logistics of how you will actually deliver a product or service, the resources you need to make the business run efficiently, as well as other information about the business.

The reality of entrepreneurship is that some ideas just won’t work no matter how passionate you may be about it. Starting up a business means risk, and it is not advisable to walk into that risk without assessing the viability of your idea first. A feasibility study looks at the viability of a business, and really focuses in on any issues that present themselves. Can the issues be dealt with? Is there a place for this product in the market? Can I make my product/service stand out from the crowd? Is it logistically possible to build and maintain? These are all areas that need to be addressed, ideally before the start of product development, or in the deliberation stage.

To break it down, a feasibility study consists of different components, all vital in the success of new business. These generally are:
• Market feasibility which looks at the industry and consumer base
• Technical feasibility which predictably looks at the technical delivery etc
• Financial feasibility looks at return on investment, capital needed to begin, source of income.
• And Organizational feasibility which encompasses the entire structure of the business from corporate to legal to staff. This can also cover the skills present in the entrepreneur or founders as the grounding of the whole start-up concept.

Remember, the aim of a feasibility study is to find all the issues early on so they can be dealt with, so don’t shy away from acknowledging what your start-up lacks. This honesty early on could be the difference in the probability of success. Look at a feasibility study as a tool, not to be confused with a business plan, which is formulated only after positive feasibility results. The business plan will be drawn up based on the most positive scenario laid out by a feasibility study, and carry on into financial projections and more details on the business.

Enterprise Ireland offer feasibility research grants to those High Potential Start-Ups aimed at exporting. For this particular grant your start-up must be:
• Based on an innovative technology or service offering;
• Likely to achieve significant growth in three to four years (sales of €1m per annum and employment of 10 or more);
• Export orientated;
• Led by an experienced team, with a mixture of technical and commercial competencies.

A feasibility study can be as in-depth or as simple as you want it; but be mindful of the issues that can arise if this step is ignored. As well as finding potential tricky areas, a feasibility study will help you evaluate the most cost effective way to move forward, and if you’re thinking of looking for funding for you business, a feasibility study is an absolute must for credibility.

So you have an idea for a product and you are thinking about patenting?
Before you go rushing off to the Irish Patent Office here are a few questions to ask yourself.

Have you conducted your own patent search?

You can hire a professional to check if there are any patents/products which would be similar to yours but you can cover a lot of the groundwork by using online databases which are open to the public. A really good and user friendly website is Espacenet. This database was set up by the European Patent Office and it can be used to search patents by keywords etc. You can use this to make sure your patent will not infringe on another patent. Whether patenting or not, this is a useful step to take. If you commercialise a product which infringes on someone else’s patent, you are liable to pay damages.

Have you come across a patented product which is similar to yours? If so…

Check out the nature of the patent. Patents won’t always apply to the product itself but the way it is made, the material used or technology etc. An organisation looking to manufacturer orthopaedic mats was almost scared off when they saw a competitor had a ‘patented’ solution. When they found the patent online and looked at it closely, it turned out that it was the manufacturing process which was patented. This meant that they had two options for a start-up company – to manufacture a similar product using a different manufacturing process for a fraction of the cost, or use there somewhat stronger position in negotiating a franchise agreement with the original manufacturer.

Check out the region where the patent is applicable – Competitor patents may not apply to the country in which you want to commercialise your product.

Check out expired patents – Sometimes individuals or companies have not been able to renew their patents for whatever reason. Once the patent is past the expiry date, it is free for all to use. Because it is already in the public domain, it is not possible to buy the patent. (Note – make sure the patent really has expired because some products have prolonged patentcoverage periods. For example food or pharmaceutical products sometimes get extensions because of the long process of approval from the FDA).

Is your patent related to a value-added aspect of your product?

When I say value-added aspect, I mean the aspect which makes your product superior to other products from a customer perspective. Naturally, it makes sense to try to protect something which is really inventive and novel, when it adds value to the product itself. The patented aspect should make your product more useful to consumers – better, faster, cheaper etc. The whole point of a patent is to prevent competitors from using the idea and to give the inventor a chance to commercialise or license it. Therefore, it makes sense to patent the aspect that you think your competitors would want, so that you can prevent them from using it and you can enjoy the benefits of it.

It is possible to patent an aspect of your product that does not add value however. Often companies patent a tiny aspect of the product, for example a clip or an internal mechanism. This means that they can place the ‘patented product’ words on their product and potential competitors are warded off. But remember the orthopaedic mat example? Filing a patent for an aspect of your product that does not add significant value to the end product is done at your own risk. A clever competitor may check out the nature of your patent, may find a way to design around your patent and develop and commercialise a product which satisfies the customers just as much as yours does (if not more!) for less cost.

To File or Not To File?

Cost will always be a consideration when considering patents. Patents are not only expensive to obtain and maintain but also to defend, if a competitor should infringe. You may be prepared to fork out the cash for the patent but are you prepared to fork out the legal fees,  for defending it in court, should the need arise? There is more information on patents and patent costs on Irish Patent Office website.

Filing a patent: If you decide to file a patent, you can use a number of strategies to bullet-proof your patent or at least disguise it from competitors. Some companies use ‘patent clusters’ to make the patent bullet-proof. Typically, a designer or engineer will role-play a competitor company and try to design around the patent. When they come up with a number of solutions, where possible, patents are filed for these solutions too. Patent clustering can be an expensive process, however.

To prevent competitors from accessing your patent easily, you can word your descriptions such that the patent is more difficult to find on databases such as espacenet. Patent agents are usually very good at this, and, of course, at providing other useful information on the areas of patenting. There is a list of patent agents who are registered with the Irish Patent Office.

Not filing a patent: Patenting is an expensive business and it is not for all start-ups companies. Fear not – there are alternatives to creating barriers for your competitors and achieving customer lock-in.  A patented product does not necessarily mean a good one nor does it guarantee a return of investment. Some of the best products came about through piecing together technologies and materials which were available off the shelf. Perhaps even before going down the patenting route, think about ways to use current technologies to make the product the best it can be without having to invest in expensive and time consuming R&D processes.

If you get your 4 P’s right (Product, Price, Promotion, Place) a patent may be unnecessary. Remember there were MP3 players before the iPod, but what made the iPod unique was the branding, design, interface and the suite of complimentary products (iTunes etc.) which would follow. Timing of course is everything and therefore try to get to market quickly and get a head-start on your competitors to create customer loyalty.

God decided to take the devil to court and settle their differences once and for all. When Satan heard this, he laughed and said, “And where do you think you’re going to find a lawyer?”

Legal advice is a necessary evil. My advice re lawyers is as follows; to succeed you will need a good team of professionals around you. You will need a great accountant, a Tax adviser and at least one good solicitor. The danger when dealing with professions such as lawyer, accountant etc is to assume that because the person you are dealing with is qualified they must be good.

You need to get the sense that your solicitor is taking you and your case seriously. If your calls are not being returned promptly and you get the impression that you are wasting their valuable time, tell them that you have resolved the issue, settle your surprisingly large bill and walk. Bring the work that the previous crap solicitor did for you to another one and tell them that you fired the last guy because he was not up to scratch.

One letter from a solicitor can cost up to €500 so make sure you have an idea of costs before you engage one. Let them know how much you have to spend. Most business disputes can only be resolved in the high court which will set you back at least 10K so avoid even venturing down the legal road at all costs because the only people who win at the end of the day are you know who!.