How to Order a Feasibility Study

Jan. 22, 2012 - PRLog -- Ordering a feasibility study is typically done because lenders or investors are demanding one from the project developer.  The project can be a business, a product or development of many types.

The report must be third party and unbiased.  We have never spoken a developer who thought their project was infeasible, but many projects are for various reasons.

Several elements of risk are considered in a feasibility study.  Business plans often point out the positives only and always indicate a "growing demand".  

Recently we completed a feasibility study for a product.  The developers provided a business plan that indicated a "growing demand and industry".  After some careful research we discovered they were absolutely correct, the industry was growing.

However, it was growing after contracting by 20% and was at levels not seen for 10 years meaning that the industry was so negatively impacted by the recession that is bottomed out at a level of the year 2001.

So, the market was growing, but even with the most optimistic forecasts, would not achieve even 2004 levels until 2016.  And the report was completed in 2011.  Thus, the "demand" indicated in their business plan was erroneous.

Secondly, the market had shifted.  The business plan indicated that prices for units were increasing. After a careful examination of the market, we discovered that unit prices had actually fallen.  The increase in revenues at the companies that did survive the recession of 2007-2009 was due to increased sales for larger units sold to developments for governmental purposes, thus, with the government spending of 2009-2010 which was cut in 2011, the increases were 1) not sustainable and 2) not a "real market".

The business plan provided indicated that the product could be used for commercial uses, but was mostly residential.  The business plan indicated that a recovery in the residential sector would boost sales.

However, in the regions of their planned sales, the demographics indicated declines and residential development had virtually ceased and the make matters worse the market for replacement units has plummeted.

Thus, not all products are feasibility no matter their competitive advantage.  Demand must exist.

Why would you spend money for a third party to ruin your plans?  Why would you borrow money and the interest of investors only to fail because of your shortsightedness?

Why would you invest your time and effort into something that is doomed from the start?

How do you order a feasibility study?  Call us at 1-888-661-4449 ext. 7 and speak to us.  Send us your business plan to dsafranek@wert-berater.com.

We will provide a price and time for completion.  Typically, a study can take from 60 days to even up to 6 months depending on the complexity of the plan and product.

Taking a risk?  Not having a feasibility study is the most risky part of your plan.

Wert-Berater.com
1-888-661-4449
http://www.wert-berater.com

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Wert-Berater, Inc. is a diversified consulting business providing services to its clients on a global basis.