What is Feasibility Study?
As the name implies, a feasibility analysis is used to determine the viability of an idea, such as ensuring a project is legally and technically feasible as well as economically justifiable. It tells us whether a project is worth the investment—in some cases, a project may not be doable. There can be many reasons for this, including requiring too many resources, which not only prevents those resources from performing other tasks but also may cost more than an organization would earn back by taking on a project that isn’t profitable.
A well-designed study should offer a historical background of the business or project, such as a description of the product or service, accounting statements, details of operations and management, marketing research and policies, financial data, legal requirements, and tax obligations. Generally, such studies precede technical development and project implementation
Types of Feasibility Study
A feasibility analysis evaluates the project’s potential for success; therefore, perceived objectivity is an essential factor in the credibility of the study for potential investors and lending institutions. There are five types of feasibility study—separate areas that a feasibility study examines, described below.
1.Technical Feasibility: This assessment focuses on the technical resources available to the organization. It helps organizations determine whether the technical resources meet capacity and whether the technical team is capable of converting the ideas into working systems. Technical feasibility also involves the evaluation of the hardware, software, and other technical requirements of the proposed system. As an exaggerated example, an organization wouldn’t want to try to put Star Trek’s transporters in their building—currently, this project is not technically feasible.
2.Economic Feasibility: This assessment typically involves a cost/ benefits analysis of the project, helping organizations determine the viability, cost, and benefits associated with a project before financial resources are allocated. It also serves as an independent project assessment and enhances project credibility—helping decision-makers determine the positive economic benefits to the organization that the proposed project will provide.
3.Legal Feasibility: This assessment investigates whether any aspect of the proposed project conflicts with legal requirements like zoning laws, data protection acts or social media laws. Let’s say an organization wants to construct a new office building in a specific location. A feasibility study might reveal the organization’s ideal location isn’t zoned for that type of business. That organization has just saved considerable time and effort by learning that their project was not feasible right from the beginning.
4.Operational Feasibility: This assessment involves undertaking a study to analyze and determine whether—and how well—the organization’s needs can be met by completing the project. Operational feasibility studies also examine how a project plan satisfies the requirements identified in the requirements analysis phase of system development.
5.Scheduling Feasibility: This assessment is the most important for project success; after all, a project will fail if not completed on time. In scheduling feasibility, an organization estimates how much time the project will take to complete.
When these areas have all been examined, the feasibility analysis helps identify any constraints the proposed project may face, including:
1.Internal Project Constraints: Technical, Technology, Budget, Resource, etc.
2.Internal Corporate Constraints: Financial, Marketing, Export, etc.
External Constraints: Logistics, Environment, Laws, and Regulations, etc.
Importance of Feasibility Study
The importance of a feasibility study is based on organizational desire to “get it right” before committing resources, time, or budget. A feasibility study might uncover new ideas that could completely change a project’s scope. It’s best to make these determinations in advance, rather than to jump in and to learn that the project won’t work. Conducting a feasibility study is always beneficial to the project as it gives you and other stakeholders a clear picture of the proposed project.
Below are some key benefits of conducting a feasibility study:
- Improves project teams’ focus
- Identifies new opportunities
- Provides valuable information for a “go/no-go” decision
- Narrows the business alternatives
- Identifies a valid reason to undertake the project
- Enhances the success rate by evaluating multiple parameters
- Aids decision-making on the project
- Identifies reasons not to proceed
Apart from the approaches to feasibility study listed above, some projects also require other constraints to be analyzed:
- Internal Project Constraints: Technical, Technology, Budget, Resource, etc.
- Internal Corporate Constraints: Financial, Marketing, Export, etc.
- External Constraints: Logistics, Environment, Laws, and Regulations, etc.
- Feasibility Studies helps to assess whether a business venture will be a success or a failure. Startups and established businesses need to conduct a due diligence of the proposed business before starting a new initiative or expanding an existing set-up. Our Feasibility Study consulting services is designed to measure the success or failure probability of any business. The key aspects that we look into are financial viability, market scope, operations, HR structure and other related aspects of the business.
The framework of our feasibility analysis can map any medium and small size business across all functions. The factors we look into are the requirements to set-up the business in terms of inputs, outputs, investments, debt or equity, market viability, the right human resource structure, operational aspects etc.
It helps business owners to understand whether the direction of the business is correct and if not what rectification measures need to be taken. We have improvised our framework based upon global practices as well as our own developments especially in terms of mapping the market, financial forecasts and projections. We ensure that there is minimum variation between the projections that we provide and the real-life scenario. This is one of the key factors why our clients trust us to make their feasibility study projects.
The reports that we create are comprehensive to ensure complete coverage of the business. Our quality assurance team checks the reports iteratively and provides feedback on coverage, language, design and any other areas that need improvement. Our services are designed both for smaller businesses and medium industries.
We offer 2 different types of services:
- Standard Feasibility Study- The standard Feasibility study is suitable for small businesses across service and manufacturing businesses. It is suitable for startups also that want a deeper look into their business viability. The sections covered in Standard Feasibility study are the Business Section that includes Executive Summary, Products/Services, Market Scenarios, Comparative Analysis, Risk Analysis, Marketing Strategy, Organization Structure and Success Strategies. The Commercial Section includes budgetary costs, production costs (if applicable), Sale price, other expenditure and Financial forecasts. The cost of the Standard Feasibility study varies depending on the requirements.
- Comprehensive Feasibility Study- The comprehensive Feasibility study is suitable for medium businesses especially in the manufacturing sector where there is a requirement for different machineries, different inputs for production, final production outputs, design aspects etc. The comprehensive Feasibility study comprises of all that is available in the Standard study + a detailed technical section that covers machinery details, plant details, layouts etc. depending upon the requirement. The cost of the comprehensive Feasibility study varies depending on the requirements.
Our comprehensive feasibility study solutions help provide our customers with sound insight into the viability of their projects, as well potential opportunities and difficulties that will need to be overcome for any investment decision. Whether the objective is to take advantage of new platform technologies, optimize feed stocks, improve product mix, reduce OPEX and CAPEX, or increase production capacity, we have the experience and expertise to provide the data and analysis necessary for meeting your objectives.
“We have the experience and expertise to provide the data and analysis necessary for meeting your objectives.”
Applying decades of knowledge gained from our experience in energy markets, along with proprietary technical and commercial tools, our consulting experts provide extensive information covering the entire scope of your project, including market sustainability, technical feasibility and ROI forecasts. The breadth and depth of our capabilities allow us to cover all types of upstream and downstream facilities for oil and gas and many forms of renewables. Our feasibility studies include technical definition; capital, operating and decommissioning economics; execution plan and EPC schedule; and project risk analysis and mitigation.
Market and Feasibility Studies
As top experts in local markets, we provide accurate and insightful market studies and highly conclusive feasibility studies to assist clients in their real estate development and property management decisions. It is common to consider market and feasibility studies as one and the same. They are, however, two different concepts and typically occur at different stages of the development process. In general, a market analysis seeks to define the intersection of supply and demand that will create a market for a specific property use at a given price. In contrast, a feasibility analysis seeks to determine if the perceived market value exceeds the cost of construction or redevelopment of a property. When certain economic, financial, and/or social goals are met, feasibility is generally thought to have been achieved. We provide top quality services that strive to accomplish both:
- Enhanced market analysis
- Enhanced feasibility analysis
A feasibility study can give your project a necessary reality check. With the current conditions as the starting point, we estimate the potentials in your project or business case to make sure that your vision is realistic, fundable and socio-economically sustainable.
Our services within Feasibility Studies include:
- Vision and concept
- Analysis – demand, supply, opportunities and challenges
- Construction program – financial status, operating budget and time schedule
- Strategy – funding sources and communication strategy
- Business plan and actions
- Construction management
- Training of operating personnel
- Making ideas happen
Across sectors, we provide critical and unbiased feasibility studies that work as a solid basis for decision-makers and their prioritization of projects. Our team of experienced economists conducts studies in the tourism industry, e.g. in connection with the construction of new culture and experience centers, but also when existing buildings need to be rethought to fulfil new purposes and activities. Self-governing institutions and public organizations are among our key clients, but we also conduct large projects for private companies.
Our unique company set-up means we can utilize competencies from across the AEMS Group and enlist the help of our legal experts, survey specialists or engineers who have many years of experience with construction, analysis, strategy and concept development, to deliver tailored solutions for each project – from turning the first sod to estimating the average number of visitors.