Understanding A Feasibility Study

A feasibility study is usually undertaken before a project is put in place, in order to understand how it will eventually fare.

Some of the elements that will be taken into account include economic, timeline, legal and policy, and technological impact.

In large-scale organizations that often work with high-profile projects, officers used a feasibility study to determine whether the time, money, and effort that will go into the project will turn out to be fruitful.

Utility For Companies

The study allows a business or other organization to obtain an idea as to the potential issues that could arise when the building or implementation is put into action.

The legal aspect for example, is going to asses whether the land is a real estate project can be built upon for commercial purposes.

Without the study, it is possible that the project encounters ancillary issues, such as the land being projected due to its cultural significance, such as it being in close proximity to such a venue.

The study will also give the entity to take the necessary steps to address the issues it identifies.

More so, the final document can also act as an assurance mechanism of sorts, convincing large investors for example, of the sure shot nature of the project, providing an informal hedge for their capital.

Key Aspects

The layout of the study provides information regarding the product or service itself.

The financial aspect covers the amount of capital or funds required in the first phase, and then the money required to keep the project running, often divided across things like labor, operations, equipment, and employees. In the case of a commercial project, this may also provide an estimate of the return on investment.

The operational aspect is going to focus on the receptiveness of the product or service, covering elements such as venue, raw material, and transport systems.

The market aspect is, much like some aspects of market research, is going to deliver information regarding the nature of the product’s segment or industry, key competitors, and the target market.

Pros And Cons

While the need for the study is considered paramount before large projects are initiated, the fact that the process costs money may compel small or midsize organizations to consider skipping the process, as a means for a consulting agency to make money.

Secondly, in cases where a similar product or service is in place, and is running successfully, managers may want to avoid the repetition, by simply pointing to how well the competition is doing.

On the other hand, since once the decision to launch a product or service is taken, it will be very difficult to reverse or change without expenditure or incurring heft losses.

Feasibility study UAE consultants will also gather reasons for the organization not to proceed, thereby presenting an opportunity for potential issues to be addressed preemptively.