5 reasons for why the feasibility study is necessary for your project?
There are many sectors of various business, so the ideas success depends largely on selecting and supporting the project idea through recognizing its actual implementation and what will be the expected financial returns from such implementation Before starting the actual investment of financial resources, efforts and time, it is very necessary to determine whether or not the surrounding conditions will make this idea to continue and develop with many returns. This can be achieved by editing feasibility study for this idea. There are many reasons that make the feasibility study is necessary to start a successful investment. In this essay we will highlight 5 important reasons that make it is necessary for you to do feasibility study before starting any investment.
At beginning let us identify what does the feasibility study mean?
The feasibility study for the economic project is an accurate detailed report that analyses all factors that may affect the proposed project negatively or positively, Feasibility study can study all technical elements that are necessary for the project such as raw resources, human resources or required employees, production operations, location and target customers for the service or product that you are about to produce; meaning who is your ideal customer? What are his\her preferences and interests? What is his\her financial income? What is his\her buying behavior? Knowing strengths and weaknesses of the existing and related products in customer viewpoint of view enable you to know the competitors providing similar services\products. What is customers size of these competitors? What are the competitors’ products or services and what are their strengths and weaknesses? What is the competitors pricing structure? Are there competitive features for their products\services? Etc. Knowing the market gaps to provide you with available investment opportunities that help you to maximize returns; give careful consideration for all the costs requiring for starting, operating and continuing, and knowing what are the expected revenues in light of calculating the expected sales volume; it reveals many investment opportunities, strengths, and available options that can help you in the future. In brief, the feasibility study for the projects helps you to know your model or proposed idea sustainability before pouring money. There are five reasons that make it necessary for you to do feasibility study for your project:
- To ensure that there are any obstacles to implement the idea actually
There is no doubt that the beginning of successful business is wonderful and creative ideas, but creativity is not enough. These ideas must be able to implemented actually. The feasibility study enables you to make sure of this, where technical study collects the necessary data related to idea implementation like position whether or not it is inconsistent with legislations and regulations Is the area enough to implement all necessary operations for service or product? Is the location price being strength factor or it causes additional costs or over expenditures? Is the technology using in industry and production operation available? Are all raw resources available in the countries? If the raw resources are not available, is there available agency enable importing raw materials without affecting quality and price? Is the human resource available? It also studies machinery, equipment, buildings and transportations; all these studies should determine all technical requirements for the proposed project, so there will be nothing prevent the idea implementation.
- To measure the prospective customers interest with the proposed project
Some investors may think that their ideas are more than wonderful, but this is not the measure. Instead of this the main determining factor is considered the intended audience for this idea. How will they persuade with that idea? Will the intended audience accept to buy this product if the idea is implemented? So the most important purpose of the feasibility study is to measure the interest of your target audience in the product or service you intend to offer before you start and invest in times, efforts and funds and then you discover that the market in the field of the industry is already saturated and then you will have to withdraw or make more efforts and money to continue, therefore, marketing studies collect the necessary data about the industry and the market you intend to target and the nature of competition and reveal if there are gaps in the market and show you more options available that can be used to give a product/service competitive advantages that give way to this market, and in the light of the analysis of this information can measure the extent of interest of potential customers with this idea and even determine the expected sales volume.
- Consider the financial feasibility of this idea
The other common purpose of the feasibility study is to look into financial safety and ensure that this investment will have profitable returns worth investing in, and financial studies here calculate all expenses from construction, operating and production costs as well as potential marketing costs. management, and then looks at the expected revenue along with marketing studies and the expected sales volume, not only does it look at profitability and return on investment, but it also helps you determine how much money is needed to start implementation, and it looks at the financing structure and the sources of funding, and to determine what cash flows will look like during the life of the project, all of this will help you to make your investment decision in this idea prudent in terms of investment.
- Feasibility studies help define your objectives and develop your vision
Through the detailed data that the project’s feasibility study collects, examines and analyzes, then it is possible to divide the big ideas and clarify the features of the project’s objectives, and even schedule these objectives during a specified time frame in order to achieve profitability and reduce opportunities for inflation, as well as understanding the industry, market and customers The prospective works to refine your vision and develop it, and this is what helps the business to continuity and sustainability. After having this amount of information, you will be able to know what your target audience needs and must be met? This is what gives you continuity, sustainability and revenues.
- Full advanced preparation for the future
Ultimately, in the financial and business world, preparing for potential risks along the investment path is the key to sustainability, not just success. If the market conditions are constantly changing and all risks cannot be expected, then identifying weaknesses helps your project gain flexibility and possess many scenarios Alternative and proposed solutions that enable him to face the difficulties and risks that may reveal themselves suddenly, and this is what feasibility studies help you, so it comes as a matter of going into a structured process that teaches the gaps and blind spots, and you seek the help of the strengths that you have revealed about feasibility study is a safe investment, and all this will help you to fully prepare for the challenges they will face in the planning, operation, production, management, marketing and development.
Checking the validity of the ideas to apply on the real world and accurate calculations of budgets and revenues are crucial to ensuring business success, and this is what economic feasibility studies offer you, they help you to prepare suitably to face any potential challenge, but what matters is how well and precisely these prepared studies are, and this depends mainly on the nature of the entity assigned to it in order to prepare the study, and here at mashroohk company we pay great attention to accuracy and quality and this is what made us the first choice for 20895 clients, our professional team of 80 consultants, prepared for feasibility studies, assistants and technicians has prepared 2324 feasibility studies so far in various sectors of the business, and we have served nearly 20 countries in the Middle East, for more information or to request a feasibility study for your project, contact us today!