how to conduct a feasibility study : everything you need to know

1/27/2024 0 comments
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how to conduct a feasibility study

 A project feasibility study is a crucial and essential step to ensure the success of any project, whether small or large

It aims to fully and accurately evaluate all aspects of the project, and analyze all information and data related to it, such as analyzing opportunities, the market, and competition, determining requirements, evaluating financial feasibility, and analyzing risks and difficulties, with the aim of determining whether the project will be successful or not.
After that, the implementation phase can begin with defining the time plan, implementing the plan, and managing the project.
In the end, the results are summarized, study recommendations are given, and the project’s success is evaluated. In this article, we will provide you with a comprehensive guide to how to conduct a feasibility study for a successful project, explaining the basic steps that must be followed and the financial and legal concepts that must be taken into consideration.
If you intend to start your own project, this article is your ideal guide to achieving success.

What is a feasibility study?

A feasibility study is a comprehensive analysis and evaluation process of a project, with the aim of determining its feasibility and potential profitability.
The feasibility study includes an analysis of the financial, economic and commercial aspects of the project, including:
  • Expected revenues and costs
  • Potential profits and losses
  • Competitive environment
  • Potential opportunities and threats
A feasibility study is conducted before the start of the project, to help investors or project owners decide whether to implement or cancel the project.

how to conduct a feasibility study

Conducting a feasibility study for a project is considered necessary for the success and achievement of expected profits. Conducting a feasibility study for a project includes several important steps that include several stages, namely the analysis stage, the study stage, and the implementation stage. We will talk about all of these stages in detail below:

• First: the analysis stage

The project feasibility study begins with a comprehensive analysis of the commercial and economic environment surrounding it. An analysis is conducted of the potential factors that may affect the success of the project, such as competition, demand for the product or service, and market expectations. All of this information and data is collected from multiple reliable sources to ensure the accuracy and completeness of the study.

1. Identify the opportunity

At this stage, appropriate commercial opportunities for establishing the project are identified. This includes studying the market and analyzing information to determine the current or future needs and interests of potential customers. After that, potential risks are analyzed and the financial feasibility of the project is evaluated. The results of this stage are summarized in the following table:

Business opportunitiesneeds and interestsAnd potential risks
Chance 1Need 1Risk 1
Chance 2Need 2Risk 2

Based on the previous analysis, a decision can be made regarding the feasibility of opportunities and their fit with the project strategy. Attention can also be directed towards opportunities with high feasibility, suitability and low risk. 

Remember that accurately evaluating the opportunity is the basis for the success of the project

Opportunity comes and goes, so you must take advantage of it and make the right decision at the right time.

2. Market analysis

At this stage, the target market is analyzed in detail. This includes studying the factors affecting the market such as the supply and demand ratio and consumer needs. Potential consumers and competitors in the market are also analyzed. This is done through the use of tools such as questionnaires, i.e. surveys, interviews, and secondary research to collect information. Crisis, and based on the results of these analyses, growth opportunities and challenges that may face the project are identified. In the following table, some key data for analyzing the project market are presented.

Influencing factorthe description
Supply and demandEvaluate the level of demand and supply in the market
Consumer trendsStudy consumption trends for similar and competing products
Potential consumersAnalyze the age groups, interests, and needs of potential customers

The market must be carefully analyzed to identify both growth opportunities and project success.

3. Competition analysis

At this stage, the competition in the market is analyzed and the strength of competitors and the strengths and weaknesses of each of them is assessed. This is done by studying several axes such as prices, quality, service and innovation. The information is compiled in a table that shows the main competitors and their strengths and weaknesses. A list of challenges and opportunities is also presented. The project may face competition in the market.

• Second: The study stage

At this stage, the focus is on studying the technical and economic aspects of the project, and these aspects include the following:

1. Define requirements

At this stage, the basic requirements of the project are determined. This is done by interviewing potential customers and understanding their needs and requirements. 

These requirements are documented in a table containing a detailed description of each requirement and its importance. After that, a list of basic and sub-requirements is prepared and prioritized, and these requirements are used as a reference for the design and development of the project. 

Defining requirements accurately also helps in achieving the project objectives in an effective and organized manner, and also contributes to avoiding problems and delays in later stages of the project. Requirements must be specified carefully and in detail to ensure the success of the project.

Requirement 1High
Requirement 2Medium
Requirement 3Low

Carefully defining requirements is a critical step in the process of creating a successful project.

2. Evaluate financial feasibility

After determining the requirements necessary to implement the project, the financial feasibility must be evaluated to ensure the viability of investment and the expected financial return. The financial feasibility evaluation includes calculating the costs necessary to implement and operate the project, in addition to determining the expected revenues and the time period to achieve them. 

Many tools and techniques are used to evaluate financial feasibility, such as cash analysis, return on investment analysis, and analysis of fixed and variable expenses. Financial feasibility must be evaluated accurately and professionally to make an informed decision regarding the continuity of the project and achieving expected profits. In the following table, some of the elements that These should be taken into account when assessing the financial feasibility of the project:

Elementthe description
CostsIncludes investment costs, operation and maintenance costs
RevenuesIncludes expected revenues from the project
Return on investmentIncludes the expected return on investment
DurationIt includes the expected time period to achieve financial returns

Financial feasibility must be evaluated with care and attention to ensure the success of the project and achieve the desired financial return.

3. Risk analysis

At this stage, potential risks that could affect the success of the project are analysed. This includes identifying, evaluating, and classifying risks according to priority. A table is prepared showing potential risks, their impact, and the probability of their occurrence. 

The proposed procedures to deal with these risks and reduce their impact on the project are also clarified. 

A list of proposed preventive measures to reduce the occurrence of risks is also prepared. At this stage, great attention must be paid to analyzing the risks and taking the necessary measures to deal with them effectively and ensure the success of the project.

• Third: Implementation stage

At this stage, all previous steps are reviewed and then the implementation plan begins to be prepared

1. Determine the time plan

After determining the requirements and evaluating the financial feasibility, the time plan for implementing the project must be determined. This includes identifying the required tasks and distributing them over specific time periods. The time plan must be clear and precisely defined to ensure the successful implementation of the project.

 A timetable can be used to display the various tasks and the time periods specified for each task. The responsibilities and resources required for each task must also be defined. In addition, the performance and monitoring indicators used to track the progress of the project and ensure adherence to the specified timetable must be defined. Defining the time plan is a critical step in the project implementation process and achieving Success in the implementation phase.

2. Implement the plan

After determining the time plan, we move to the plan implementation stage. This stage includes implementing the activities specified in the plan, following up on the progress of work, and ensuring their correct implementation in accordance with the specified specifications. If you have a team, there must be good coordination between team members, tasks are distributed appropriately among them, progress is documented, the schedule is updated, and performance, costs and quality are monitored.

 There must be continuous communication with customers and partners to ensure their satisfaction and meet their needs. If any challenges or problems occur, appropriate measures must be taken to deal with them and solve them effectively. 

In this stage, performance is evaluated, results are reviewed, and the objectives set in the plan are ensured. Implementing the plan requires good organization and effective project management.

3. Project management

After implementing the plan, we move to the project management phase. Project management includes implementing the specific plan, following up on the progress of work, and ensuring the achievement of the set goals. 

A project management team is appointed responsible for directing and coordinating operations and resources. The role of the project management team includes managing appointments, tasks, financial and human resources. 

Project management tools and techniques are used to achieve efficiency and coordination between all parties involved. The progress of the project must be regularly evaluated and necessary measures taken to resolve any problems or challenges that may arise.

At the end of this phase, the success of the project is evaluated and lessons learned are documented for use in future projects.

Implement the plan3 months
Track progressDaily 
Ensuring goals are achievedAs needed

Attention: Regular progress reports and updates must be provided to all team members.

Project management is an organizational process where resources and processes are directed and coordinated to achieve project objectives efficiently and on time.

• Fourth: Summarizing the results

After completing the analysis, study and implementation stages, the main results of the feasibility study can be summarized. The study’s recommendations include identifying future opportunities and improvements required to achieve success. Success must be evaluated based on financial indicators and the overall performance of the project. The following table can be used to summarize the results:

Indicatorthe value
Return on investment10%
Time period to recover the investment2 years

These results are an indicator of the success of the project and may require some improvements and adjustments to achieve better performance. Potential risks must also be taken into account and the necessary measures taken to deal with them.

• Fifth: Evaluating success

After completing the feasibility study for the project and analyzing the results, the success of the project is evaluated according to the specified criteria. This includes summarizing and evaluating the main results that have been achieved.

 Study recommendations are provided to improve performance and increase the chances of success in the project, and success is evaluated based on the achievement of specified financial and business objectives. 

In the end, a comprehensive assessment of the project's success is given and it is determined whether it is worth the investment or not. In the following table, the criteria used to evaluate the project's success are explained:

Standardthe description
Time rangeThe project's ability to continue and grow in the long term
ProfitabilityAbility to achieve profits and return on investment
marketThe project's ability to compete and capture market share

The success of the project must be regularly evaluated and necessary improvements made to ensure the continuity and success of the project.


What is economic analysis in a feasibility study?

Economic analysis is an important part of the feasibility study, as the expected financial return of the project is estimated, the required investment is analyzed, and the capital recovery period is determined

What is the importance of the feasibility study for any successful project?

The feasibility study is one of the basic and necessary steps for the success of any project, as it helps those implementing it to evaluate its feasibility and the feasibility of its investment, and it represents one of the important analytical tools for making the right investment decisions. 

Through the feasibility study, the financial, economic, commercial, technical and legal aspects related to the project are comprehensively analyzed, and based on the results of the study, the necessary decisions can be made to move forward with or withdraw from the implementation of the project. 

In addition, the feasibility study helps initially clarify the vision and expectations of the project, estimate potential risks and analyze the competitive environment.

 Therefore, conducting the feasibility study accurately and objectively enhances the chances of the project’s success and reduces its potential risks

What is the importance of market analysis in a feasibility study?

Market analysis in the feasibility study helps to understand the size of the target market, market trends and potential competition, which helps in making correct strategic decisions for the success of the project.

What is the importance of competition analysis in a feasibility study?

Competition analysis in the feasibility study helps to identify potential competitors and assess the strength of their market position, in order to determine appropriate marketing and competition strategies for the project.

What are the basic steps in risk analysis in a feasibility study?

The basic steps in risk analysis include identifying potential risks, estimating their impact and likelihood of occurrence, and developing strategies to deal with potential risks.

What is the importance of determining the time plan in the implementation phase?

Determining the time plan in the implementation phase helps organize work and define tasks and deadlines, which contributes to effective project implementation and achieving the set goals. 

What is the importance of project management in the implementation phase?

Project management is considered one of the main factors for project success, as it helps organize work, direct the team, monitor project progress, achieve quality, and control costs and deadlines.

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