A simplified feasibility study, if you are planning to start any large, small or medium-sized project in one of the business sectors, whether production, trade or services, you must prepare a feasibility study for this project, in order to identify the market situation, competitors, target customers and other elements Which opens the way for you to know the market situation, and in today’s article we will learn together how to implement a simplified feasibility study.
Simplified feasibility study
The feasibility study is the process of collecting all information about the proposed project, and analyzing it in detail in order to know the extent to which this project can be implemented on the ground.
And work to reduce the risks that the project may be exposed to, in addition to obtaining the highest possible profitability.
It also evaluates the extent of the project’s success or loss compared to the requirements of the local market. The feasibility study includes several studies, including:
The technical study.
In a nutshell, the feasibility study is a set of studies that depend on the opinion of experts working on its preparation, and ends with the start of project implementation.
Any economic feasibility study depends on the availability of information about the nature of the project, and this information differs from one project to another due to the different objectives and types.
Any project owner can also complete the feasibility study through one of the following two options:
The first option: It is to carry out the feasibility study alone without resorting to experts and specialists, but he must be careful in every step of the study, in order to avoid any future losses.
The second option: to seek the assistance of a company specialized in the field of feasibility studies, in order to ensure the success of the project in the short and long term.
If you intend, my dear, to deal with a company to carry out a feasibility study for your project, you should deal immediately with the technology company, which everyone praised for its professional and distinguished performance in the work of all feasibility studies for various commercial and service projects.
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A simplified feasibility study for a small project
The feasibility study of your project can be carried out without the need for any ready-made model, and the models and methods by which investors conduct a simplified feasibility study differ from one project to another.
But all of them agree on four important basic stages in order to build an integrated and comprehensive study that covers all its aspects and includes the following:
First, the technical study:
This study includes a detailed and comprehensive description of the project and the product or service it will provide, in addition to the required needs of machinery, equipment and labor.
Accordingly, the required volume of production is determined, as well as the market study of the product, and this is done by answering the following questions:
What product will this project provide?
What is the position of competitors in the target market?
What is the demand for the product?
Second, the market study:
This stage is one of the most important stages of the feasibility study, but unfortunately a lot may fall into the error of neglecting this step, or dealing with it without the required attention, which leads to a major failure. This study helps the employer to identify the following:
Identifying customers’ desires for the project’s product.
Determine the style and selling points of the product.
Determining and evaluating the extent of the market position the product is targeting.
Knowing the target customers in terms of their quality, numbers, purchasing power and buying patterns.
Competitors must be known in terms of their strengths and weaknesses.
Third, the financial study:
This study provides all the financial details of the project in order to determine the financial capacity required to start implementing it on the ground, based on the expected costs of operation, production and marketing.
And the extent of the availability of those funds, whether from direct investment or the use of loans, after studying the amount of interest on the loan, and these questions answer the financial study:
What is the amount of capital required to start implementing the project?
What is the pricing policy that should be set for the product?
What is the sales volume?
Is the capital required for the project available or does it need external financing such as a loan?
What is the expected time period to reach the break-even point in terms of profit and loss.
What is the rate of return on investment?