A feasibility study, or business opportunity analysis, is a planning tool similar to a business plan. The feasibility study is done to flesh out the possibilities in an initial business idea. The business plan then fully describes the business and its financial projections.
Feasibility studies answer the question, “Will this work?” A business plan answers the question, “How will this work?”
Feasibility studies are for the entrepreneur's benefit, to determine whether it's worth proceeding with the business. Business plans are targeted at investors, lenders and future executives to explain how the business works.
Feasibility studies focus on the size of the potential market, availability and prices of suppliers and distributors, and the abilities of the entrepreneur. Business plans also include operations plans, marketing strategies, location, management team and in-depth financial projections.
Feasibility studies usually compare several possible scenarios for how a business might work. Business plans describe a specific business, but include different sections depending on which parts of the business are interesting to the audience.
A business will probably fail if its feasibility study is done poorly the first time. Business plans, however, will go through many iterations and are designed to evolve to describe an ongoing business.