This stage in the project analysis is where the go / no-go decision will be made. The proper way to conduct a feasibility study is to prepare a business plan, and present it to investors. Why? The reason why managers of a company go through the process of writing a business plan, and showing it to investors (or to the VP, President, or CEO of the company—for internal software projects), is because they need a document that they can share with an investor to gauge the interest in the project. If the investors would be interested in making an investment, then it means that the project has merit.

The perfect document for this is a formal business plan because it contains summary information on all the important things investors would want to see, namely:

• Market analysis: Is there room in the market for yet another similar product? What is the market potential?
• Competitive analysis: How is our product/service going to be different? Are we going to compete on cost, quality, or features?
• Required resources: What personnel does the project need? And how many man-hours to build it and deliver it to market?
• Budgets: How much money in total should be budgeted for the project (IT, sales, operating costs, and so on)?
• Financial projections: What revenues can be expected over the next 12 months, two years, three years, and five years? What is the break-even point?
• Exit strategies: How long do we operate the company for? How do we get our investment out?

You may be asking yourself if I actually prepared a detailed business plan for a software project that was fairly small in size. The answer—of course! Why? In short, I needed to see whether implenting the project was worth my time and money. Specifically, I spent the necessary time preparing a business plan for the following reasons:

• Market analysis: As good as an idea may sound to you, you need to do your due diligence in being reasonably sure that there is a need for yet another product or service in the market you are entering. If there is room, then you have a potential opportunity. In my case, I believed that room existed for Listing Carousel and that it was sufficiently differentiated to give me a competitive advantage over the competing products in the market.
• Cost and time to develop: Time and money are valuable commodities—and developing a software product or service will take both. Every dollar you invest in one project means that you can't invest it in another. And the same is true of your time. Every hour you spend on doing something means you gave that time up for doing something else instead. So, choose where you place your resources wisely! In my case, I had some money earmarked for a fun project to do—so the money part was taken care of. How about the time? This was a difficult decision for me. While I did not really have the time, I liked the project and I have friends that are real-estate agents—and so I decided, what the hell, let's go for it. So, I knew how much money I needed to invest, and roughly how much time I had to invest as well. 
• Projected revenues: Just because the required resources (that is, time and money) I had to invest were acceptable to me, it wasn't a done deal yet. The next step was to make some calculations to see whether I would make a profit over time, and how much. If the ROI was high enough, it was a go-ahead. In my case, the ROI was actually not as good as I wanted it to be—in fact, it was almost zero! In other words, I would just break even if I was lucky. However, you also have to listen to your gut, and my gut was telling me that I may be able to sell the software service at some point, which would make the project worthwhile. At the time of writing, I have not yet sold Listing Carousel, but it did start to make a little bit of a profit.
• Exit strategy: Before you embark on building any business—and I treated Listing Carousel as a standalone business—you have to think of an exit strategy. What is an exit strategy? It basically defines how you will divorce yourself of your obligations of operating and/or servicing the company. Companies don't run themselves, and so unless you want to stay married to the company forever, you need to have an exit strategy from the start. I can't take more space in this book to outline this in detail, but suffice it to say, I structured the company in such a way where my exit strategy was baked in.