Business analysis planing and solution objective strategy concept
What is the feasibility study and its importance for investment projects:
Before implementing any project, it is necessary to ascertain the extent of its success and to know the risks and losses that can be tolerated in the event of failure. This is the importance of conducting a feasibility study for the project. It is a study of his idea before its implementation on the ground. Based on the final result of the study, Economic or non-profitable and does not provide any material returns so the feasibility study is a comprehensive scientific studies of all aspects of the project or proposed projects, which may be either in the form of detailed preliminary studies, through which it can be an alternative choice or investment opportunity among the count Alternatives or investment opportunities proposed. These studies must be accurate, objective and inclusive; they are a set of specialized studies to ensure that project outputs (benefits, income) are greater than or equal to their inputs (costs).
The Feasibility Study is one of the main factors on which the project’s fate depends. It can very well be a reason for its success. If it is neglected or fails to meet the presumed conditions, it may lead to the collapse of the investment project and lead to failure. , Through which to identify all the possibilities to be exposed to the project, so as to be taken into account before the start of work, and to identify the extent of the possibility of dealing with them, and avoid making mistakes in the future. In fact, the role of the feasibility study does not end once the project is set up, and the feasibility studies continue as long as the investment project is in place, and it is conducted periodically to monitor the changes that have taken place. In the economic arena, and to find the best possible ways to deal with them and overcome the crises.
The importance of feasibility studies:
The importance of the feasibility study is that it is the means by which the following questions can be answered:
– What is the best project you can do?
– Why is this project done alone?
– Where is the project?
– What is the best time to set up a project and introduce its products?
– Who is the target group in the project?
– How will the project be established?
– How much do the project need workers and machines?
– How much will the project cost?
– Will it make profits or not?
– What are the sources of funding for the project?
– How do I choose a project from a range of alternative projects?
– How to prove that the project is economically feasible?
– reduce the likelihood of failure of the project and reduce the waste of capital.
– Helps trade-offs between projects available.
– Optimize the available economic resources.
– Supports economic and social development.
Objectives of the Feasibility Study:
The feasibility study aims to develop a set of methods that help to deal with the project in an innovative and sophisticated manner, understanding the terms of the economic projects and taking care to study the general market situation, which contributes to the knowledge of the volume of demand for the outputs of the project. And to measure the effects of the project on the enterprise in particular, and the economic sector in general, and contribute to determine the possibility of continuing the project, or choose an alternative project. Selection and recruitment of individuals with experience in the field of economic projects, leading to the provision of professional support for the stages of project implementation.
The feasibility study also aims to guide the investment decision of the economic project on the basis of economic and technical validity. In other words, these studies are concerned with the feasibility of establishing the proposed project before it is implemented in a practical way. The rational investment decision must be preceded by studies that show the existence of an adequate market in which the production of the project Development of this market, as well as the availability of raw materials, manpower and infrastructure, as well as sufficient and timely funding sources. Most importantly, this project will eventually achieve a return commensurate with the nature of the project and the degree of risk involved. From a national point of view, it is necessary to assess the contribution of the project to achieving all the basic objectives of development (economic and non-economic) It requires the preparation of reports and studies for both capitalists and public authorities. These studies are specialized in the different branches covered by the study, which vary from project to project according to their nature and size. Previous years have shown that failure to undertake feasibility studies prior to the establishment of new projects or to take decisions of replacement, renewal or expansion of existing projects, either ignorance or deliberate is a serious error leading to waste of resources and misuse and loss of the amount of money that could have been spent on feasibility studies .