The Importance of Feasibility Study For Success Investment In Business

Every business person want to succeed in their business. Begin with a feasibility study is key to reach it. Many of the projects or any kind of business fails to achieve this goal because do not even begin with a feasibility study.

The importance of Feasibility Study
Feasibility study is needed by many people, especially for investors as the initiator, the bank as lender, and also government as a provider of law and order legislation. Surely the interests of all different from each other. Investor interest in order to know the level of investment profits, bank’s interest to know the security level of credit provided and facilitation of return, government emphasize the benefits of these investments for macro economy, equal employment opportunities, etc. Given that future conditions will come filled with uncertainty, it would require certain considerations.

In the feasibility study there are many aspects that must be studied and researched it’s feasibility with purpose those study results are used to decide whether or not the project or the eligible business is done or postponed or even canceled. This above to show that the feasibility study will involve a lot of teams from various experts in accordance with its or their respective aspects such as economists, law, psychologists, accountants, engineers and other technology.

And feasibility studies are usually classified into two parts based on the expected orientation by a company that is based on profit orientation, which is referred to studies that focus on economic profit, and (not on the orientation of social profit), which is the study meant that emphasize such a project can be executed and implemented without considering the value or economic benefit.

Analysis of Various Aspects are Required

1. Marketing Aspect Analysis
In the analysis of the marketing aspect there are some components that must be analyzed and examined, among them:
• Needs and wants of consumers;
• Market Segmentation
• Target;
• Value added;
• The product life;
• Market Structure
• Competition and competitors’ strategies

2. Production Aspect Analysis
Some element of production or operations aspects that must be analyzed include:
• Location operation
• Volume operations;
• Machinery and equipment;
• Raw materials and auxiliary materials;
• Labor force;
• Lay-out

3. Management aspects analysis
Several elements must be analyzed among other
• Ownership
• Organization
• Management Team
• Employees;

4. Financial aspects analysis
Components include the following:
• The need for funds;
• Source of funds;
• Projected balance sheet;
• Projected profit and loss;
• Projected cash flow

The true and accurate analysis to the aspects related in the preparation of this feasibility study is to determine a feasible project or not to run.
The feasibility study needs our thoroughness in preparing it, for example, just to set the business concepts necessary to run a comprehensive market research in order to formulate and return a proper risk.

Therefore, the preparation of a feasibility study can not be regarded as insignificant for the success of a business, so it an expert in the field and industry in accordance with the business to be done.