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Aspects of Project Feasibility Preparations and Analysis


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Reasons to do a feasibility study

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Aspects of Project Feasibility Preparations and Analysis

  1. 1. Reasons to do a Feasibility Study • Gives focus to the project and outline alternatives. • Narrows business alternatives • Identifies new opportunities through the investigative process. • Identifies reasons not to proceed. • Enhances the probability of success by addressing and mitigating factors early on that could affect the project. • Provides quality information for decision making. • Provides documentation that the business venture was thoroughly investigated. • Helps in securing funding from lending institutions and other monetary sources. • Helps to attract equity investment. Aspects of Project Feasibility Preparations and Analysis A. Technical Feasibility - The technical capability of the personnel as well as the capability of the available technology should be considered. The Technical Feasibility Study assesses the details of how you will deliver a product or service (i.e., materials, labor, transportation, where your business will be located, technology needed, etc.) B. Managerial Feasibility- involves the capability of the infrastructure of a process to achieve and sustain process improvement. An Organizational Feasibility Study may also include professional background information about the founders and principals of the business and what skills they can contribute to the business. C. Economic Feasibility -This involves the feasibility of the proposed project to generate economic benefits. A benefit-cost analysis and a breakeven analysis are important aspects of evaluating the economic feasibility of new industrial projects
  2. 2. D. Financial Feasibility- involves the capability of the project organization to raise the appropriate funds needed to implement the proposed project(different from economic feasibility) A financial feasibility study projects how much start-up capital is needed, sources of capital, returns on investment, and other financial considerations. E. Cultural Feasibility- deals with the compatibility of the proposed project with cultural setup of the project environment. F. Social Feasibility- addresses the influences that a proposed project may have on the social system in the project environment G. Safety Feasibility- is another important aspect that should be considered in project planning. It also refers to an analysis of whether the project is capable of being implemented and operated safely with minimal adverse effects on the environment H. Political Feasibility- A politically feasible project may be referred to as a "politically correct project. Political considerations often dictate direction for a proposed project. I. Environmental Feasibility - Concern must be shown and action must be taken to address anyand all environmental concerns raised or anticipated. J. Market Feasibility- Another concern is market variability and impact on the project.This area should not be confused with the Economic Feasibility. The market needs analysis to view the potential impacts of market demand, competitive activities, etc. and "divertible". The primary area that the feasibility study needs to address is potential market opportunities, market competition, and market analysis. K. Legal Feasibility - The legal feasibility study would determine whether the proposed project conflicts with legal requirements L. Socio-Economic Desirability - The social feasibility of its part would determine the proposed project will be satisfactory for the people or not. This assumption would in general examine the probability that the project would have to be accepted by the group of people that are directly affected by the proposed system.