Feasibility Study

We carry out market research and feasibility studies for private investors,
investment funds, asset managers, and multi-national companies.

What is a Feasibility Study?

A feasibility study is a verification of a specific business plan. The plan may be focused on various  objectives:  capital  expenditure  on  new assets, new  market  entry, new  product launch, etc.

Why is a Feasibility study important?

Business plans are typically  connected  with utilising smaller or larger amounts of  financial resources  for their  actualisation. Each  business plan is at  the same time connected  with risks, such as that its objectives will not be achieved. Therefore, it is extremely  important to scrutinise  all  assumptions  that  have  been  used  for  the  business planning, and then to quantify  the  risks of failure. A feasibility study is required almost in all cases when external sources (credit, venture capital) are going to be used.

What is the Subject of a Feasibility Study?

A feasibility study is  based on  the fact, that the relevant  prepared business plan includes  all assumptions and calculations that substantiate the possible  achievement of objectives (return on investment). A feasibility study is then a verification tool of these inputs.

The  key  assumption  is  that  the feasibility  study will accumulate information from various sources so as to  eliminate  negative  influences. From  these sources, the most likely data value for  calculations  is used. The  result is an alternative  calculation that either confirms the original evaluation of the plan, or provides a different calculation of returns. Also a part of the feasibility study concerns a sensitivity analysis that regulates the impact of a change in key assumptions on the final result.

What is a Feasibility Study's Deliverable?

The main deliverable is a written report that summarises findings from the verification  of all inputs, and an appendix  with  calculations. Calculations are  usually a forecast  of financial reports for a defined time  period (typically  five to ten years), or calculations  of the Return on Investment (ROI). The  report is usually presented in the  following sections (depending on the type of business plan):
 

• Objectives of the business plan;
• Assessment of the proposed technology (capacity, design, supplier);
• Assessment of proposed deadlines;
• Analysis of one-off costs and expenses (purchase price of the technology, costs of installation operation initiation, supplementary costs);
• Assessment of operating costs (price and availability of raw materials, other materials, energy, services, costs of personnel, maintenance costs, etc.);
• Assumed customers, distribution channels, costs of sales and marketing;
• Environmental impacts;
• Analysis of the relevant market (demand, competition, price);
• Assessment of the location, likelihood of obtaining all  approvals from  government and local authorities;
• Current position of the company, and the compliance of the plan with the business strategy.

What Benefits one can Gain from a Feasibility Study?

A feasibility study significantly reduces  the risk of approving a business plan that is based on  too  optimistic  assumptions.  If  some adjustments  to  the  business  plan  have  been  made (cancellation of the plan, change of its extent) based on a study, then you can save funds that would have been  spent with no return. In the  case of utilising  external funds, a good feasibility study is a pre-condition for obtaining such funds.

Why engage a consultant?

An external consultant enjoys a great deal of independence in preparing a feasibility study. He has no personal interest in the implementation  of the business  plan, and he  can then work just using his expertise and  common  sense. He  also  may  have  access  to  a larger number of independent information sources.


Contact Solver Corporate to help  your  company  confidentially  explore  Feasibility  Study  Solutions.