Introduction

This report has been prepared as a requirement of the Project Appraisal & Management course.
The report was based upon the Feasibility study of a project.. We were duly approved by our
Course Teacher Sir Abu taleb.. This report will help us know about feasibility study which is an
analysis of the viability of an idea. It ensures that a project is legally and technically feasible and
economically justifiable.
Moreover this study can be used in various ways with focus on the proposed business. It tells us
whether a project is worth doable or not. Feasibility study is a must because:

Every Project is not doable.

Not every project should be done.

Not every project makes use of effective resources of company.

In its simplest terms, the two criteria to judge feasibility are cost required and value to be
attained. A well-designed study should provide a historical background of the business or
project, a description of the product or service, accounting statements, details of
the operations and management, marketing research and policies, financial data, legal
requirements and tax obligations. Generally, such studies precede technical development
and project implementation.

A feasibility study evaluates the project's potential for success; therefore, perceived
objectivity is an important factor in the credibility of the study for potential investors and
lending institutions.

Five different areas of Project Feasibility

1. Technical Feasibility assessment is focused on the present technical resource available in
the organization. It studies if the technical resources including the technical team are
capable of converting the ideas into working system. It also evaluates the hardware and
the software requirement of the proposed system.
2. Economical Feasibility studies enable organizations to assess the viability, cost and
benefits of projects before financial resources are allocated. They also provide
independent project assessment and enhance project credibility. It also helps to determine
the positive economic benefits to the organization that the proposed system will provide.
It includes quantification and identification of all the benefits expected. This assessment
typically involves a cost/ benefits analysis of the project.
3. Legally Feasibility of the project determines whether the proposed system conflicts with
legal requirements like any data protection act or any social media law.
4. To ensure success, desired operational outcomes must be imparted during design and
development. These include such design-dependent parameters such as reliability,
maintainability, supportability, usability, disposability, sustainability, affordability and
others.
5. Scheduling Feasibility is the most important in terms of project success. A project will
fail if not completed on time. In scheduling feasibility we estimate how much time the
system will take to complete and with our technical skill we need to estimate the period
to complete the project using some methods.

Benefit
Conducting a feasibility study is always beneficial to the project and it gives a clear picture of
your idea. Below are the top benefits of this study:

Gives focus to the project and alternative outline.

Narrows the business alternative.

Identifies the reason to do the project.

Enhances the success rate by considering multiple factor.

Helps in decision making of the project.

Enhances the success rate by considering multiple factor.

Helps in decision making of the project.

Provides a detailed documented status to the business.

Apart from the above mentioned feasibility there are some other constraints required to analyze
like:

Internal Project Constraints: Technical, Technology, Budget, Resource etc.

Internal Corporate Constraints: Financial, Marketing, Export etc.

External Constraints: Logistics, Environment, Laws and regulation etc.

1. First: Goals and Personality of the Project owner

Goals- Project owner should determine his goals and personal concept for carrying out
the project. Should he desire to construct a house he must have conception, before laying
down the foundation stone of the house style and design (whether large or small, one or
two floors, number of rooms etc). Also, upon constructing any project we should have
conception of the goals that we hope to achieve .through such project.

While you are imagining your project, you have to think of your aims, is this project for gaining
a lot of money, using your creative abilities or achieving more flexibility in your life? Are you
aiming ?at expanding the project or keeping the same small as it is ,Therefore, the personal goals
are divided into number of goals :including the following

1. Innovation: It is a mean for carrying out something bearing their impression, innovated
product, new service or inn novating new method for sales management or dealing
with .customers etc.
2. Control: Desire in more control for applying the ideas, ideas applying control, work
hours or circumstances control or production quantity and type etc.
3. Challenge: To face problems and difficulties that facing the .project without hesitation or
wavering
4. Money: gaining more money and utilizing the same for the .project expanding and

development.
Personality- Personality of the project owner plays vital role in the project
successfulness. Therefore, the project owner should be aware of important aspects in his
personality before initiating the project execution :these aspects are .(His experiences
and skills that services the project (communication, design, supervision, organizing,
marketing and sports kills- .Personal motives that shall guarantee the project
successfulness- Personal capacities that shall lead the project, such as (cooperation,
honesty, work enthusiasm, accuracy of

timing, doing the best- .(efforts, daily and

continued supervision of the work

2. Second Market (commercial) Study

It means obtaining important data and information related to the .project, targeted market,
competition facing the same and dealers

Characteristics of Industry - Being ware of the industry from which the project a part,
(whether the project is industrial, commercial or professional), looking for information
reflects the financial performance of this industry and information about the trends of

this industry.
Targeted Market - Determining the targeted market is one of the important elementsfor confirming the project successfulness, in order to determine whether or not there are
enough number of customers, i.e. evaluating the volume of orders for the project to
guarantee its continuation and .successfulness.

It is necessary to make population statistics to the intended customer that you are planning to
deal with, (age, gender, income threshold, qualification, marital statusetc.). Also, to determine

the targeted customers (End user or customer, buyers, retailers and wholesalersetc.). Moreover,
to determine the product capacity or volume in order to fulfill the required order.

Competitors- You should be aware of the main competitors, their interests, points of
weakness and power and means utilized by the competitors for .customer attraction,
specifications of their products and prices. Competitors can be divided into two types as
follows:

Director Competitors: Including companies, small establishments, similar to your project, as

for production, customers, ambition .trying to access the same targeted market.
Large Companies: Large and medium companies working in the market and considered as the
real competitor, specially should it .competition based on the price .You can recourse to the
working paper, in order to determine .the point of power with the direct and future competitors.

Supplier - Should you open a toys store, how can you obtain the toys for put the same on
the display shelves. On the other hand, if the toys are produced by you, how can you
succeed in putting the toys, produced by you, on the display shelves, in the world of
business, whether you are purchasing or selling you will almost require a broker to
intermediate between the seller and purchaser. You should know the type of material and
services required by, who are the main agents? And what are the things included in the
costs .You may recourse to the working paper, for making comparison between the
suppliers.

3. Third: Technical and Executive Study of the Project:

Where shall your work, manufacturing or selling your product be located? What is the type of
equipment required by you? What are the commodities manufacturing requirements and phases
of its manufacturing? What is the extent of requirement for fixed machines and equipment? All
the aforesaid elements shall affect directly on your success.

Manufacturing Machines and Equipment- It is possible that the evil manufacturing

process shall encumber you high costs or results in less quality or more damages.

Therefore, you should select manufacturing machines and tools carefully form well

known companies.
Place- If your project depends on retail; location shall be the most important element in
the project, since availability of the project in a clear location shall notably save a lot of
costs related to marketing and advertisements. Consequently, this is considered as
competition advantage on which the other companies enter into competition.

In case of the project depending on manufacturing; the facility of movement should be taken into
consideration, in relation to items, and product delivery to markets, availability of water,
electricity, gas etc. and availability low cost means for getting rid of garbage.

4. Fourth: Financial Study for the Project:

While you are in the field of commercial business, you hall meet some frequently repeated
financial terms, including the following:

General or Fixed Expenses:

Represented in rent, insurance, telephone, salaries, water, electricity etc. and fixed expenses are
.the total amount of these expenses.

Changed expenses: represented in the changed expenses from time to time, such as

advertisements, promotional offersetc.

Monthly expenses rate: refers to the monthly expended amount by you, whether fixed or

changed expenses.
Revenues: It is the total amount of money gained from sales.
Income: It is the amount of money obtained from any source, such as the debts due to us

and investments
Profits: it is the balance amount of money, after deducting the costs and divided into two
section: Total profit and net profit.

Total profit: It is the balance amount of the money after deducting the costs of sold goods, but
after deducting general and administrative costs.
Net Profit: it is the net achieved profits, during the fiscal year for the company.

Net loss: Deducting all expenses from all revenues and you shall find money lost by
you, instead of achieving profits.

Finance: Finance is divided into two sections

1. Debt Finance - It is often a loan or equipment finance. The money should be re-f funded,
whether the trade is boomed or not. Almost, you should initiate debit settlement after
short time from obtaining the same.
2. Investment Finance - To obtain Investment under investment finance, where the investor
shall be granted a part of project possession and share in the future profits. He shall be
often granted the right in taken the decision, but if the project exposed to loss, you
shouldnt refund any money.

Thereafter, the main sources as follows:

The Personal Financial Assets - It is better to initiate your project by your own money.
Should you have enough money; you shall be in the best financial situation, since .you

shall not enter into debts or investments with third parties.

Sales and Revenues- The best method for project finance is through sales revenues. If
you can develop your project depending on the monies received by you from the

customers; you shall not require debit or sharing any other party in your investment.
Friends and family - Do you want to lose your friend? Borrow money from him or let
him to invest in your company. Sharing the family and friends in the project affairs is a
critical matter, unless such person understands the project nature and actual risks and you
can communicate easily with him. You should always drawing up the loan or investment

documents determining clearly the payment and investment provisions.

Banks- Banks currently initiated offering facilitated finance to the small project owners,
since it is providing these loans with less Murabah percentage, simplified provisions and

flexible payment period up to three years, in addition to the provision of elapsing three
years after 18 .practicing the business Through collecting, discussing and analyzing the
information, a question shall arise here in relation with the project feasibility and
resolving whether the project is perfect or not. Should the idea is perfect, we shall initiate
preparation and making work plan. If the idea is not perfect, we shall ignore the first idea
and look for another .beneficial and successful project idea.

Outcomes of a Feasibility Study

Often, after the completion of a study, a determination may be made not to proceed with the
project. A good feasibility study will include:

Project Problems Does the study include risk or problematic areas that need to
be addressed and are they clearly identified.

The Outcome Ever study should identify the process, product, client request,
and goal and how they will affect the outcome; positively or negatively. Will outcomes be
beneficial or deterrent.

Alternatives Are possible alternatives available or suggested and researched.

Assessment The assessment part of your feasibility study should include risk
management and control, solutions, if the project is feasible, and how the project should be
implemented.

Recommendation
For projects to be considered, especially if they are to undertake many resources including real
dollars, real time, and real effort, a feasibility study is essential prior to project initiation, Project
scope, and initiation.

If a project appears overwhelming or requires much detail and analysis to get to even begin the
project, consider completing a feasibility study prior to the project.