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A feasibility study is carried out for the assessment of a business plan for the determination of its viability. It involves an objective analysis based on actual and reliable statistics. A feasibility study is the first step to evaluate whether the business plan will bring in the necessary cash flow that contributes the business stability.
A feasibility study shows whether the business proposal can be converted into a reality, thus helps in deciding to start a new business or expand the business line.
In this fast-paced business environment, the product life cycles are shrinking, and innovative products are on preference by customers. The new technology of manufacturing and supply chain mechanisms are fostering that promise better product quality, efficient turnaround time, and reduced manufacturing costs. Preferences of the customer are rapidly changing, and with so much competition, even a high performing product can become obsolete prior to its realisation by brand owners.
Therefore, before making a decision to invest, it is imperative for any investor to understand the potential and feasibility of a proposed project.
Below are the phases to ascertain the feasibility of a project:
In this phase, the conditions of the market are studied, including the analysis of prevailing and future market conditions, the dominant market players are identified, and to bridge the gap their strengths and weaknesses are determined. The product/service to introduce is compared with the existing products/services, distinguishing features that create a competitive edge over the existing products/ services is understood, and analysis is made that whether it solves any ‘need’ of the market. The delivery channels are identified, the receptiveness of target customers is studied, and value addition to the customers is determined in this phase.
This phase revolves around the analysis of below:
- start-up costs
- operating cost
- legal costs
- capital expenditure
- fixed and variable cost
- Profitability and expected ROI
- financing methods and costs related to the financing options
- customer and supplier payment terms are also determined to ensure healthy cash flow
In this phase, the necessary resources for the business are analysed. The requirements of hardware / Software, availability of Capital assets, and whether a change or expansion can be accommodated with the capital being invested are some of the determining aspects in this phase.
Regarding labour and management, the requirements of manpower, their technical knowledge, training, competency, and experience of managers are the aspects to be considered.
At this stage, the time frame for setting up the business is decided. A viable business plan must be formulated within a set time frame as the market is very dynamic, and that the business plan should be set to reality within the stipulated time frame to meet the objectives of the company.
What can we offer
Our experienced feasibility study consultants provide you the insights that you need to make a well-informed decision.
Our team of feasibility consultants takes into account all the key parameters in their assessment of the situation. We take into consideration the macroeconomic parameters and industry environment to perform these analyses. Our detailed reports shows how a project is expected to run in the present and future economic environment.