PROJECT FEASIBILITY STUDIES

IMPORTANCE

Project feasibility studies are intended to determine the practicability of investment projects as well as to define their main elements.

A project feasibility study consists of four parts:

Market Research

Is there a market for our product? What is our profits projection? On what do we base that projection?

Definition of the product, market extent and tendencies, market penetrability, commercial strategy, and potential sales.

Technical Aspects

How is the product to be manufactured or the service to be granted? How much is to be invested?

Determination of the technical features of the product, plant location, suitable technologies, machinery and equipment, goods and services needed to manufacture the product, raw materials, labor force, and investment schedule.

Administrative Aspects

How are the enterprise and the project to be managed?

Definition of the promoter of the project, his/her business experience, organizational structure, legal aspects, and managers’ experience.

Financial Aspects

Is the project financially feasible? How is the financing to be structured?

Amount to be invested, credit and capital structure, profit projections, costs and results, pro-forma balances, cash flow.

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