The Essential Reasons Why Your Company Needs a Feasibility Study
Many business owners have great ideas, but not all of them are able to bring their idea to life. Fewer still can create something successful. Not only can a failed project be disheartening, but it also means that you have wasted resources that could have been allocated somewhere else.
This is why feasibility studies exist.
Whether you are a community organization or a Fortune 500 company conducting a feasibility study in the UAE (or wherever you reside) is key to ensuring that you are focusing on the right projects at the right time. To learn more about what it can do for your ideas, read on for the essential reasons why your company needs a feasibility study.
1. It helps you to flesh out your idea.
A feasibility study is needed to help you make an in-depth study of an idea and flesh it out once you have a prospective plan. Evaluation is what differentiates a failed idea from a successful one. Throughout this process, you will examine an assortment of different ways to approach your concept, as well as alternatives. The feasibility study operates as an exploratory pursuit, allowing you to consider various paths in order to reach your intended destination.
Throughout this process, you will investigate the relevant market, as well as your target customers' needs and your competition – all of these things affect the plausibility of accomplishing your business goals. Furthermore, the feasibility study will help you ascertain the costs associated with the launch of your project.
In most cases, feasibility studies will show potential issues or limitations with the concept; however, this doesn't mean that the proposal does not have merit. Instead, you want to be made aware of these issues immediately, after which you can begin to correct them as quickly as possible.
2. It helps you define your goals.
Once you have fleshed out your idea and worked through any potential problems, the next stage of a feasibility study is to define your goals related to the project. After all, even the greatest idea isn't going to work unless it is executed appropriately. By doing a feasibility study, you will be able to make informed decisions regarding the necessary goals and the timeline in which they need to be met.
A feasibility study enables you to ascertain what resources are required to get the project in motion by helping you to understand the costs and revenue potential. A feasibility study also enables you to develop a pragmatic plan as you will have clearly defined steps leading up to your goals. You can then take those steps and formulate a well-informed strategic outline. The feasibility study operates as a road map detailing the most reliable path to finding success in the project.
3. It informs and educates team members.
In order to have a successful venture, you need everyone on the team to be on the same page. This is another reason why a feasibility study is so powerful as it succinctly communicates the initial vision and rationale for this new venture. Through their participation in the study, the employees' knowledge and understanding of the concept and project expands, while the interactive nature of it helps everyone feel a strong sense of commitment and purpose.
No matter how large (or small) your team is, a feasibility study needs to involve all members because their input is valuable, and you want to demonstrate that their thoughts matter. A feasibility study captures their evaluations, concerns, and hopes and works as a valuable tool for assessing opinion and support.
Therefore, when planning the logistics of the study, you want to ensure you are finding a way for employees to participate that is convenient and comfortable for them. Keep in mind that the stronger their sense of belonging and identity with the project, the more passion they will bring.
4. It confirms that this is the right time to move forward.
Timing is everything, and that is especially true when it comes to launching a new venture. Unfortunately, even the most magnificent ideas launched at the wrong time are not going to have the level of success that they would have during a more appropriate period. Therefore, a significant part of a feasibility study is an optimal timing identification.
Depending on your project and the organization, it may be better to launch in the winter because you already have too much on your plate in the spring (or vice versa). To make these recommendations, a feasibility study will look at your labor, production capacity, and supply chain. While it isn't saying that you shouldn't pursue this project, the feasibility study may advise you to adjust when you undertake it.
Additionally, as a part of this step, the feasibility study will review cash flow projections. In some cases, your project launch may need to be delayed until you have more cash flow or savings. By including this in the study, you can ensure that you are going to have adequate funds for your project.
Conducting a Feasibility Study
There are plenty of reasons why a feasibility study is essential when considering a new project; however, in order to reap all the benefits, it is highly recommended that you work with professionals. The best auditing firm in Dubai has highly qualified consultants who offer thorough feasibility studies. By investing in their services, you can be assured that your study will be informed by macroeconomic parameters and industry shifts, as well as your company's situation.
In order to recognize the potential and feasibility of your idea, you need to have outside expertise. You will be able to work together to turn your idea into action, and then, success. Experienced feasibility study consultants in the UAE have the knowledge required to obtain the information and insights necessary for you to make the best decisions for your company.
Do you have a new project or business idea in the works? If so, are you going to do a feasibility study? If you have done one before, what do you think were the main benefits? Do share your thoughts and related experiences in the comments below.
Stany Pereira is the Managing Partner at PKF UAE. He is a Fellow Chartered Accountant who has been with PKF since 1987 and has been responsible for the development and management of the firm's practice. He has an overall experience of over three decades in audit and assurance services. Stany also oversees the tax and structuring practice of the firm.