Feasibility studies are an essential part of any project. They provide insight into the potential success of a project by analyzing expected costs, benefits, and risks. Feasibility study specialists are experts in the field who can provide valuable insights into the process of conducting a feasibility study for any given project.
These specialists can advise on how to make the feasibility study easier and more efficient, In addition to providing management consulting services to ensure that all aspects of the project are considered. They also provide financial advice on how best to allocate resources to maximize benefit and minimize risk. with their help, Companies can make informed decisions when it comes to launching new projects or expanding existing ones.
If you are planning to implement a small or medium-sized project, you must carry out a feasibility study for this project before executing it. The feasibility study is very important and can be described as the guiding evidence that guides its owner and informs him of the project’s ability to succeed or fail before he spends any money.
Through the feasibility study, you get to know the market situation, the volume of supply and demand, the competitors for the project, and the target customers, and thus you can determine whether this market needs the project or not.
You can also identify the technical elements related to the project, such as the location, area, necessary equipment, licenses and equipment – if any – and the size and quality of labor and the costs of each item.
You can also identify, through the feasibility study of the project, the financial elements of the project, which are represented in the establishment costs, operating costs, revenues, expected profits of the project, and others.
As for how to conduct a feasibility study for projects, many resort to feasibility studies offices and pay up to $1,000 in return. And it increases a lot in the case of medium projects.
We at the Small Projects website have a lot of experience on feasibility studies and how to prepare them efficiently. But we are not here to promote ourselves. Rather, we are here to teach you “for free” how to do a feasibility study for your project yourself with great ease, whatever the size and type of your project.
At the end of our topic, we also offer you a wonderful free gift. It is a ready-made feasibility study form in which you put your project data only to obtain the necessary information about it. Honestly, we’ll save you hundreds of dollars.
Firstly, Definition of Feasibility Study:
in a simple way, A feasibility study is a study carried out by the project owner to know the market conditions and the required investment volume (costs) as well as the expected profits. Based on the results of the study, the owner of the project takes his decision to implement the project or not.
secondly, Elements of a feasibility study:
The feasibility study consists of three main components, namely,
1- Market study.
2- Technical study.
3- Financial study.
Third, How to do a feasibility study:
1- Market study:
The market study stage can be considered the most important of the three stages. By studying the market, you will learn about,,
1- The volume of demand for goods or services to be provided by the project.
2- The volume of supply of goods or services to be provided by the project.
3- Determine the project’s production capacity (sales volume) according to supply and demand.
4- The target customers for the project products.
5- The needs and desires of the target customers.
6- Competitors’ activity, products and prices in the target market.
7- Available gaps and opportunities that can be exploited for the benefit of the project.
As for how to conduct a marketing feasibility study, It is possible to rely on a marketing research method to gather information about the target market, target customers, and competitors.
Perhaps the best of these methods is the survey and interview, in addition to following up on recent market research that has been released about the same product that you intend to offer in the same market in which you intend to operate.
For more details on how to do a market research feasibility study, see
2- Technical study:
The aim of this study is to know all the technical matters related to the project, such as,,
1- Determine the location, area, specifications and costs of the project headquarters.
2- Determine the size, quality, specifications and costs of labor.
3- Determining the needs and costs of the project in terms of equipment, tools and supplies.
4- Determine the needs and costs of the project in terms of services such as energy, water and others.
5- Determine the project’s need and costs of raw materials and production supplies (in the case of production projects).
6- Determine the stages of production in detail (in the case of production projects).
As for how to conduct a technical feasibility study for the project, it can be done easily, especially in the case of small projects. You only need to know the following in the following ways:
1- The specifications of the project site from the authority granting the license or even via the Internet, or from those who have previously implemented the same project.
2- Rental costs by visiting the area in which he wishes to implement his project or by searching online on real estate websites.
3- Costs of equipment and machinery by communicating with companies that sell production lines to find out the average prices of equipment and production lines with the targeted production capacity.
4- Employees’ salaries through employment sites and by asking workers in the same jobs and perhaps from the entrepreneurs themselves.
5- If it is an industrial project, Production stages can be known via the Internet or by consulting engineers and specialists in the field. Perhaps through the company producing the production line or the manufacturing machine.
3- Financial study:
The financial study is the most critical stage of the feasibility study. Through it, the revenues and profits of the project are identified, and accordingly, the investment decision is taken. Either by implementing the project, reconsidering it, or canceling it.
It is worth noting that the results of the financial study of the project depend largely on the results of the market study and the technical study. Through a market study, the expected volume and value of sales are determined. Through the technical study, the establishment and operating costs are determined.
As for how to conduct a financial feasibility study for the project in a simple and easy way, It is possible to follow the following steps:
A- Preparing the income statement for the project:
It is a list in which the value of revenues and the value of costs for a specific period are placed in order to determine the profits or losses for that period. And you can prepare the income statement by substituting in numbers for the following data (which you are supposed to have obtained after conducting the market and technical study):
1- The expected revenues from selling products (from the market study).
2- Operating costs such as rents, labour, raw materials, utilities, marketing, asset depreciation, maintenance and others (from the technical study).
3- net profit, It is determined by subtracting operating costs from revenue, If the value is positive, then this indicates the profitability of the project. If the value is positive, then this indicates the profitability of the project.
The following is a sample income statement for a year for a burger restaurant project in Saudi Arabia. In it, the numbers indicate the loss of the project in the first months, as sales decreased. However, it increases later. (Here the decision to implement is due to the extent of the project owner’s ability to bear the loss at the beginning of the project).
B – Measuring the profitability of the project:
Depending on the results of the income statement of your project, You can answer the following questions to determine the profitability of your project,
1- Do the results obtained indicate that your project is capable of achieving high profitability?
2- Do the results obtained indicate that your project is able to cover its expenses in the short and long term?
3- Are the results indicating that the project is able to achieve an appropriate profit from your point of view?
C – Calculating the investment costs of the project:
Investment costs are fixed capital costs (fixed assets) in addition to working capital costs (variable assets or operating costs). It is calculated as follows,
The value of capital costs (costs incurred before production such as licensing, registration, training, construction, etc.) + the value of fixed assets + the value of variable assets.