In the last blog, we discussed what a feasibility study is. To recap, feasibility study allows us to check the viability of the idea and answer the important question of “Should we proceed with the business or project?”
At Nabil Investment, our experience tells us that determining whether a project / business will work or not will help us save not only on time, money and resources but also potential heartaches and headaches later.
Our consultants therefore advise everyone to conduct a Feasibility study for any proposed business or project idea. Although you will find different templates that help you carry out feasibility studies, the most important part is the components of feasibility study.
In this blog, we will talk about some of the major components the Nabil Investment corporate advisory team works on for a given Feasibility Study project.
Components of a Feasibility study
Regardless of different kinds of feasibility studies (technical, market, financial or organizational), there are certain components that the corporate advisory team at Nabil Investment include in most of the feasibility studies. The remainder of the blog will focus on the same.
- Preliminary Assessment
A preliminary assessment is done to carry out an audit of different scenarios that the business / project may play out on. The purpose of this component is to look at extreme outcomes and forecast different results in between of these extremes.
All outcomes picked here may not warrant an in depth assessment. At the end of this stage the consultants will choose the most likely outcomes / forecast for an in depth review.
- Market Assessment
One of the most important components is then to review the market the business will serve after it (or a project) is established. In this stage, consultants at Nabil Investment will do a review of current market conditions, its growth trajectory including customers acceptance, customers education and the life-cycle of the company.
Market Assessment provides the consultants with vital inputs on viability of the offering and subsequently the revenue structure as well which will be covered in more detail in the Financial Controls section.
- Organizational Structures
In this step, the feasibility study goes through an audit of the present organizational structure and if the same will give the best results for the proposed business or not. The corporate advisory team at Nabil Invest will also recommend the best organizational structure if the study suggests that there is a need to change the existing structure as well.
- Financial Controls
As we are aware, establishing a new business, or working on a new product requires a lot of resource commitment. These resources often have a financial component that the project manager will need to constantly monitor.
This section of the feasibility study focus on the vital financial control variables that need to be monitored and that will validate if the project is viable or not.
- Areas of Vulnerability
Whether the project is viable or not, it will always have some vulnerability associated with it. This section of the feasibility study looks at ascertaining and understanding the risks associated with the business or project.
After the above steps have been carried out, the experts take a final round of view on all of the data that have been generated (collected) through the above steps / stages. The study then moves on to conclude and pick important aspects that will help the business owners decide on whether to go ahead and not with the project.
Decision to take the business / project forward
It is to be noted that, although feasibility study researchers (experts) can recommend the best course of action for a business (or a project), it is at the end at the discretion of the management or the business owner to take the decision.
Feasibility study’s role is to aid that decision by providing the management team or the owners of the business with the best possible data on the same. By looking at this latest data on various market trends, areas of vulnerability, need for financial and organizational control, the management makes a decision on whether or not to take the business forward.
Do you want to conduct a feasibility study to aid your decision making as well? Contact our team of corporate advisory experts today.