What are Feasibility Studies?
Feasibility studies are in-depth analyses of a project’s potential for success. They identify the project’s strengths, weaknesses, and risks and often compare it to similar projects. Fintalent’s feasibility studies consultants describe them as a high-level analysis of how well a project seems to be or is likely to perform based on the data available at a point in time. It can also be used to test new approaches or ideas with limited resources before they’re implemented full scale. The feasibility study is done early on in the process, but can also be done at any time – even as late as after construction has begun.
Why do feasibility studies?
The purpose of the feasibility study is to find out whether the project is worth undertaking. Many government and private agencies conduct feasibility studies as part of their project evaluations. In fact, at all stages in a project, from initial planning to final documentation, there are likely to be many different people involved in each step – including agency personnel, consultants, suppliers and contractors.
So how does one decide whether it makes sense for these many people to all work on a single project? The answer is that everyone must sign off on the validity of the analysis and agree that the project can be successful if it is undertaken. The feasibility study is the one step that can ensure that everybody can work together and agree, to proceed.
Why are feasibility studies valuable?
There are countless projects in any given year, but the number of those with the potential to be successful or profitable is relatively small. A project with a small probability of success may be too expensive to consider or may not offer enough savings over other projects by way of faster completion, reduced construction time or reduced costs. Even if it’s less expensive in some cases, there’s still a chance it won’t work out. That’s where feasibility studies come in.
How are feasibility studies done?
A feasibility study takes a look at the project and performs an assessment of its potential value. There are no shortcuts; it is done the same way all real estate sales are done. The process begins with a planning phase lasting as long as it takes to get to a decision (generally, 3-6 months). Planning involves forming a detailed business plan, identifying target markets for the project, and comparing it against similar projects or others in the industry. This will help determine whether this project is really worth pursuing further.
Once the feasibility study has been completed, a cost estimate is developed and that will also be compared against similar projects to help determine whether the project has a reasonable chance of success. The process may vary, depending on the complexity of the project and what kind of data and information are available.
Some recommendations: include the following in your proposal: – Risks to which analysis will be applied – Objectives for analysis – Description (drawings and plans) for proposed project – Sample of proposals to which proposed analysis will be compared. In addition, you should include references from previous studies relevant to your area of research or expertise.
Types of Feasibility Studies
Analytical Feasibility Studies – Builds upon the previous stages and includes extensive use of mathematics, economics and statistics. Analyses tend to be based on financial and/or “bottom line” criteria only. In other words, how much money are we likely to make? What’s wrong with the business plan?
Developmental Feasibility Studies – Developmental feasibility studies look at many aspects of a project, including construction methods, types of construction materials (risk analysis), environmental studies (cost and cure rates), quality control plans, design specifications and more (see below). These types of studies are considered to be more thorough because they provide a greater measure of assurance of success and can include management.
Management Feasibility Studies – These studies help determine managerial capabilities and responsibilities, administrative capabilities, financial capabilities, legal capabilities and personnel. These are the most costly and time-consuming analyses because the client waits for “objective” fee estimates from each contractor’s surveyor. If you know what kind of people you want on the job, then survey them first.
Complex Feasibility Studies – Contracts for services or construction plans require a Complex Feasibility study. This study provides an analysis of the technical aspects of the project, its economic viability and an assessment of management and marketing. In addition, it should include a test marketing program to determine whether there will be sufficient demand for the product or service in question. Most importantly, it should require that all parties sign off on the analysis and agree that it can be successful.
Feasibility studies are essential to any project or proposal: they identify its strengths, weaknesses and risks; they compare a project against similar projects; they decide whether a project will work at this time (i.e. what’s wrong with it and what can you do to fix it). They also provide the opportunity to test marketing concepts (i.e. whether there is sufficient demand for a service or product).
Feasibility studies are not meant to be completed before the project starts – if done beforehand, they’ll only provide greater information about what needs to be changed or discarded. For that you need a design/build study which can assess how much time will be involved in construction (the cost estimating process). These two stages must be considered as separate, distinct processes. It is common for feasibility studies to have a variety of flaws. Multiply these by the number of projects for which you plan to prepare feasibility studies, and you have an approximate idea of how much time can be wasted if a poorly planned study is commissioned.
The choice is simple: either spend the time and effort doing it right the first time, or repeat this process every day. The critical point is that there must be constant feedback between the project team and those who perform the feasibility study research. In some instances, it can take as much as one year to complete a feasibility study. So don’t rush through it. When it’s done right, there’s no need to repeat yourself in so many other projects each year.
Feasibility Studies: Process & Types
The feasibility study is one of three steps in the overall development process of a project. The other two include design and build (or construction). Each step requires a different type of analysis and proposal to determine how well each phase will play out. These are also the only phase where detailed architectural drawings can be prepared.
Design-Build- Feasibility (DFB) Study – This is the stage where fee estimates are made for each contractor’s surveyor. You will know exactly how much time and money it’s going to take to complete this project, so you’ll have a better idea of if it will be successful or not. After this step, the contractor’s surveyor will give you an itemized estimate of all the costs, based on their evaluation of the project. Do your best to have this formalized and signed off by all parties before starting.
Feasibility Study – This is the stage where fee estimates are made for each contractor’s surveyor. You will know exactly how much time and money it’s going to take to complete this project, so you’ll have a better idea of if it will be successful or not. After this step, the contractor’s surveyor will give you an itemized estimate of all the costs, based on their evaluation of the project. Do your best to have this formalized and signed off by all parties before starting. Business Plan (MWF) Study – This is the stage where you prepare a business plan for your architectural firm. It includes detailed research of comparable service providers, analysis of fees and charges, (therefore costs), the financial risks and returns on investment, along with insurance and licensing requirements, etc. This will enable you to calculate the costs in advance, so that you can give informed advice to your clients who want to sign off on all business plans.
(MWF) Study – This is the stage where you prepare a business plan for your architectural firm. It includes detailed research of comparable service providers, analysis of fees and charges, (therefore costs), the financial risks and returns on investment, along with insurance and licensing requirements, etc. This will enable you to calculate the costs in advance so that you can give informed advice to your clients who want to sign off on all business plans. Feasibility Study – At this stage, the client will provide their technical specification for a product or service – for space development this could be about detailed specifications for room layouts in new buildings. You would then have information to use as a base in your bid proposal. This is a good document to use for promotional materials.
Feasibility studies are not to be confused with feasibility reports. They are two different things. Some people use the terms interchangeably, but there are important differences: Feasibility studies provide an analysis of the technical aspects of a project, its economic viability, and an assessment of management and marketing. All parties must agree that the study meets these criteria before it can be used as the basis for a successful project or bid proposal. However, they can provide valuable insights into your business’s future.