Feasibility Study – 6 steps to Do it + FREE E-BOOK
1. How to prepare a feasibility study
The feasibility study is an integrated set of specialized studies that are carried out to determine the validity of the investment in all its aspects, so some search for how to prepare a feasibility study, to predict knowledge of the possibilities and failure of the project.
Knowing the extent to which your project was feasible or, and is it worth making this investment, the feasibility study shows the likelihood of success of this project and the possibility of failure, and if it turns out that this project or idea overcomes the loss, in that it is excluded, but in the case of clarification that the idea will succeed with great probability, the project is being prepared.
Therefore, when carrying out a feasibility study, a question must be asked whether the idea of the project is feasible or not, and that point should be clarified in all its aspects, whether the financial, technical, marketing, economic, social and legal aspects, all of which to ensure the achievement of the objectives specified in this project and to ensure its success.
This element includes knowledge of the extent of item properties and know the number of competitors in the neighboring area to be doing the project, and the possibility of selling the commodity.
In addition to determining the extent of its marketing share through which it can serve the study, it is the most important stage in the feasibility study in which the market is studied, and the following is identified through it.
– The size of the demand for the good or service provided by the project.
– The size of the offer of the item to be offered.
– Determine the volume of sales according to the size of supply and demand.
– determine the need and desire ups target customers.
– knowledge, products, and prices of competitors activity in the target market.
– identify opportunities and gaps that can be exploited for the project.
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3.2 – Technical study
This study includes knowing the fixed assets required by the project, i.e., knowing all the mortal matters related to the project. My understanding is among the important elements that must be known when doing the search for how to prepare a feasibility study. There is no feasibility study without the technical study, so you must know and define the following.
– determine the location.
– Determine the area, specifications, and costs of the project headquarters.
– Determine the quality, specifications, and labor costs.
– Proportion of project costs in terms of tools, equipment, and supplies.
– Determining the costs and needs of the project in terms of services such as water, energy, and others.
In the case of productive projects, the need and costs of the project are determined in terms of production supplies and raw materials.
Determine the stages of production in detail.
3.3– Financial Study
The financial study is one of the most dangerous stages of the feasibility study, because it is through it that the revenues and profits of the project must be identified. In this study, all financial resources allocated to the project, in addition to the project costs, are searched for, and to determine the total cost of the project, and the monthly and total profits of the project.
– Find out how much the entrepreneur needs to get started.
– Does the project need external funding?
– determine the pricing structure that will be used.
– How well the project could survive in the absence of sales.
– How long does the project need to achieve parity between sale and profit?
– How much is the return on investment?
– How to prepare a feasibility study
– How to prepare a feasibility study
4.1 – Technical feasibility
In order to know how to prepare a feasibility study, all of its elements, including technical feasibility, must be known, and it is one of the most important elements. You must respond and know all the following questions to ensure the success of the project.
What is the service or product on which the project is carried out?
Is this service or product already on sale? If the answer is no, what is the method or cost you need to bring it into the market?
How do you protect your product or service from competitors?
identify strengths and weaknesses of the product.
The materials you need to produce a product or service.
How well are you able to get the materials you need.
4.2– Social viability and the environment
The social feasibility is based on a study determining the values that will be added to the project for the community, such as job opportunities, and whether this project is consistent with the values of the community, whether religious, cultural and heritage or not, in addition to assessing the effects of the project on the environment, whether positive or negative, in addition to the interest in reducing the percentage of damage that could harm the environment.
Choosing the type of service or commodity must be well taken care of, as it is one of the most important elements in the economic feasibility study, in addition to paying attention to the quality of service and the target group, as this step gives the extent of success or failure of this project.
Take well about an informed decision should how start operation of the project and determine the consequences that could arise during doing this project to determine whether it fits the surrounding community or not, Om da community can demand this either type of service or product.
Determining the project costs, through a detailed financial study that clarifies the fixed costs, such as rents, salaries, tax fees and insurances for the worker, insurances for the project, and depreciation, in addition to variable costs, which include the necessary raw materials and transportation, in addition to maintenance fees, electricity and water expenses.
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A detailed description of the proposed project must be developed, which consists of the name of the project, its employers, the location in which the project is carried out, in addition to the legal form of the project, the proposed activities, and all project activities.
The size of the market, the volume of sales in it, the services that will be provided, the organization and qualification of a functional cadre for that, in addition to the appropriate distribution of tasks, the estimation of the project needs, and the determination of the target group for this project and the services that will be provided.
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