Whether you are a startup or an established company, working on a project, product, new services, etc, requires a lot of resources. These resources could be time, financial, management or linked with suppliers and raw materials.
But how do you know that after committing so much of your resources, your product or your service will work – ie. it will generate the kind of profits that you hoped for. The answer to that dilemma is Feasibility Study.
For eg. if you are looking to open a hotel or a textile business, it would be best to have information on the total market size, demand for the product, scalability of the business, finances required to run the business, competition and legal environment
What is a Feasibility Study?
Feasibility study is an assessment to check off a project. You can also say that it is a study that seeks answer to two simple but very important question:
- Will it make profits which is acceptable?
- Is it viable to commit resources?
While answering the above questions, feasibility study determines the need of the particular product/service and the readiness of the business model to scale and expand thereby contributing to growth and profitability.0
To find these questions, the corporate advisory services team at Nabil Investment will conduct a full fledged financial analysis to model the project’s potential financial return by structuring the cost and revenue drivers for the particular business.
Apart from Financial feasibility, it is also important to look at the market viability of the product. Here, we want to check and answer questions of if there is a need (or a growing need) for the product or a service. When the product or service is launched, how much investment will have to be made to acquire enough customers to meet our revenue forecasts?
This is where the consultants will focus on the second question – How viable is it to commit resources. If the project or service needs a huge amount of resources (so much that it eats up a significant chunk of operations for the present customers), it is often considered not viable.
What are some of the insights that you can get from a feasibility study?
Apart from the above, a Feasibility study from Nabil Investment helps you get following insights:
- Market Assessment
- Financial Feasibility
- Legal Assessment
- In-depth Industry and competitive analysis
- Operational Feasibility
- Organizational Structure
- Techno Commercial assessment
- Other specific assessment needs
The above assessment helps the management team decide on the following aspects of the proposed project:
- Identify the critical success factors of the project / business / service.
- Decide whether to proceed with the project.
- Identify reasons to not proceed with the project
- Give data and insights to aid critical decisions throughout the life of the project.
Who needs to do a feasibility study?
As we have mentioned in the beginning of this blog, feasibility study (be it a one pager or a full report) is an essential study that has to be carried out for every business decision.
For example, if you are a startup or an early stage entrepreneur, you may be more interested in whether there is a gap in the market and if your business model can plug that gap. On the other hand, if you are an established business, you may want to venture into a different industry and need to understand the growth and profitability potential of the industry.
Hence, regardless of what kind of business you have (small, medium or large), you will need assistance on feasibility study from time to time.
At Nabil Investment, we have worked with all types of businesses to outline how the business plan, product launch could be feasible (profitable and viable) for the business.
Are you also looking to conduct a feasibility study? Contact us today and our expert consultants will help you with the same.