Feasibility Studies provided by experienced professionals

Aug. 22, 2012 - PRLog -- Projects fail for a large number of reasons.  Many claim to have had a feasibility study completed.  In review of these feasibility studies often they do not analyze all of the barriers to a successful project.

Many studies are based on rents, expenses and have a simple pro forma statement making claims of feasibility.

Financial feasibility is only one single aspect of a feasibility study.  

There are hurdles that must be carefully evaluated to understand the timing and constraints leading up to the development of a pro forma statement.

Some of these constraints can be site related such as access, utilities at the capacity to support the planned project, transportation nodes, availability of trained or trainable labor, and overall economic impact.  Grants and loan guarantees often are designed to create employment-

If employment is a shift and not creation for instance, then the project is infeasible in that  a planned grant or loan guarantee will not be made available, thus a capital risk.

Market feasibility is another not well understood risk.  Pricing, availability of raw materials and overall demand are only part of the equation.  Other items are is there unmet demand?  This is a complicated question to answer and a professional feasibility study must address this item.  Just because Tom's apple stand sells 50 apples at $0.50 each does not mean that Judy's will because Tom may have already met the market demand and price elasticity cannot allow Judy to undercut and maintain a profit.

Technical feasibility is important and often overlooked.  Cost for project development or capacity  levels that are insufficient due to cost constraints can lease to disaster.    Ever hear of a project going over the projected cost by the developer?  A common problem which cost everyone.

A professional feasibility study will evaluate if Judy has enough storage space for apples at her stand, what her transportation costs are, spoilage and other important factors of operating cost and risk that translate into pro forma numbers.

Management feasibility is critical.  Normally there are three types of people who enter into new ventures:  Sales, Managers or Technicians.  A sales person may not have the experience to manage a new venture, and a manager may not have the ability to sell and a technical can neither sell or manage.

Any of these problems will result in infeasibility.  A project must meet all five areas and sub areas of feasibility and be subjected to sensitivity analysis that makes sense.  

Please contact us at 1.888.661.4449 or dsafranek@wert-berater.com to discuss your feasibility study needs.

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