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How do I prepare a project feasibility study?

The idea of ​​the project is nothing but the beginning or the basis for success in the project, but before starting this project, a tribal study must be conducted for it, and this study is called a feasibility study.

The study includes a description of the product or service, or both, accounting data, details of operations and management, research and marketing policies, financial statements, legal requirements and tax obligations, radical analyzes of customers and direct and indirect competitors ... and other matters.

The feasibility study differs from the business plan, as the feasibility study tells you whether the idea is feasible and will succeed or not before the start of implementation.

 

How do you prepare a feasibility study?

To ensure a successful feasibility study, we must divide it into several integrated sections to cover the study in all respects, and obtain all the data and information that will show us whether the project idea is feasible or not. Well, here are the steps of a project feasibility study:

1 . Technical Feasibility:

The technical study determines the technical feasibility of the project and is based on evaluating the technical resources that are available to them and examining whether they are suitable for production or not, determining the volume of production, determining the most appropriate machinery and equipment for the project, determining the technical team or workers required for management, and if the technical team is able to transfer ideas Technical feasibility also involves an assessment of the logistical or geographical requirements of the project

Technical feasibility is also based on the analysis of an important component, which is the product. To help you analyze this component, you must ask these questions:

  1. What is your project based on, is it a service or a product or both?
  2.  Is this product or service available in the market, or are you the first to put it on the market?
  3. How can this product be protected from competitors?
  4. What are the resources required to produce and provide the product or service?
  5. How will you get these resources?
  6. What will customers benefit from the product?

2. Financial Feasibility:

When you finish the technical study and make sure that the project is technically suitable, you will now start studying the financial feasibility of the project. Some people combine it with the economic feasibility. The financial feasibility is the evaluation of all that will be spent on the project.

Financial feasibility helps the project owner to estimate the costs and benefits associated with the project before he allocates financial resources for the project, and this feasibility enhances the credibility of the project for you because it is related to providing figures for the start-up costs, sales management assets, operating costs, and issues related to the possibility of obtaining investment or financing Some questions related to the financial feasibility part should be asked, the most important of which are:

  • How much money do I need to start a business?
  • What are the potential sales volumes of the product or service?
  • How long can the project hold if the sale does not occur?
  • How much time will it take to break even between selling and profit?
  • profit from the project
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3. Market viability:

In your market feasibility study you will need to find an answer to these two main questions: Does anyone in the market need this product or service? Is there a similar product/service on the market now that would prevent the project from being successful?

Market feasibility is based on testing and analyzing the target market, but it should ask and answer the following questions:

  • What market segments are you targeting with your product or service?
  • Why would people buy this product/service?
  • Who are your target customers, how many approximate they are in the market, and what is their purchasing power?
  • What are the buying patterns of these customers: (the way customers buy the product or service, quantity, duration, timing, etc..)
  • How will you sell the product or service and where?
  • Who are your competitors, what are their strengths and weaknesses?

So these are the most prominent and important steps to study the feasibility of a project.

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