How To Prepare An Industrial Feasibility Study - Case Study Approach

Preparation Of Industrial Feasibility Study

Project Financing

Business (Project) Financing In Industrial Feasibility Study

Finance is the most important problem facing an entrepreneur particularly when formulating an industrial project. In most cases, entrepreneurs have meager resources and are usually not in a position to attract finance from external sources. Very often, their main sources of fund are from the promoters personal savings, contribution from family members and sometimes loans from friends, business associates and other informal sources. Business finance is the provision of funds for the effective take off of a new project, expansion or diversification of existing ones and more often for the smooth running of the business after take-off as a going concern.Continue Reading

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Planning, Organization And Management

PLANNING, ORGANIZATION AND MANAGEMENT

The life span and success of any business depends on the persons that manage it. It is the way the manager handles his assignment that will determine the success or failure of the business. For instance, a business with a systematic approach in managing its resources will survive no matter the business climate. But an industry, irrespective of its size, without a systematic plan for its continued existence will fall within a short period of time.Continue Reading

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Raw Materials And Inputs

RAW MATERIALS AND INPUTS

RAW MATERIALS SOURCING

A major preliminary step to be undertaken by project promoters is how to source adequate raw materials and other inputs to ensure a smooth and uninterrupted flow in the production process. Many times, promoters just assume that the raw materials are available in large quantity with no consideration for its demand by other household, industrial and commercial consumers. It is therefore necessary to carefully consider the source from which the raw materials will be procured i.e. whether locally or from overseas. Also, it has to be determined whether the raw materials will be purchased in bulk quantities or not as this would impact on transportation, handling and other costs of production.Continue Reading

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Feasibility Study Project Location, Site And Infrastructure

PROJECT LOCATION, SITE AND INFRASTRUCTURE

The choice of a project location is one of the most critical decisions when establishing an industry. The location directly or indirectly affects the business throughout its life time or for a long period of time. It is therefore necessary that the choice of a location be preceded by a critical evaluation of factors that will influence the choice either positively or negatively. The promoters must also identify alternative location(s) for the project and critically evaluate them in order to provide a sound justification for the location chosen.Continue Reading

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Project Background and History

The Executive Summary

To enhance the clarity of a feasibility study, it is very important to begin with a brief summary of the proposal. This brief summary is usually referred to as the “executive summary”. It provides a glimpse into the contents of the study and tells the potential investor whether the project is worth investing in or even whether the proposal is worth reading. Another purpose of the executive summary is to attract the attention of the reader, particularly the appraisal officer of a bank or lending institution to read on and internalize the contents. The summary should therefore be very short and certainly not more than one or two pages.

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Introduction To A Feasibility Study

A feasibility study is a fundamental document for starting and implementing a new or existing business enterprise. It is an important aid in project formulation and implementation. The study helps the promoters and other investors to generate, crystallise and focus their ideas, to set objectives and monitor performance against them. The feasibility study is used as a proposal to outside potential investors such as development, merchant and commercial banks, venture capital companies, bilateral and multilateral lending institutions and others for external funding either in form of loan, lease or equity participation. It is therefore important that the document must be persuasive enough to convince potential investors of the need for funding. Some researchers also refer to a feasibility study as a proposal, a business plan, a prospectus or a game plan.Continue Reading