Business Consulting - Feasibility Report On Business Ventures
An investment decision may take the form of making changes in existing products, introducing new products, integrating backward or forward.
It may also involve buying new equipment, installing a new plant, leasing an equipment, expanding operations, buying over an existing company or even divesting. Every investment involves a cost outlay, expected cash outflows and inflows, an opportunity cost of capital and a desired level of return on investment.
To minimise the risk usually associated with investment and to make the most effective use of scarce resources, it is extremely necessary to determine the feasibility and viability of business ventures to be embarked upon. The large-scale project involves a higher risk level and has more need for project feasibility studies. Feasibility studies therefore form an integral part of developing medium and large-scale projects.
Most micro and small scale projects and activities embarked upon need perhaps very small level of capital. They may not involve feasibility studies in the strict sense of it. partly because the project promoters cannot afford them. Even then the need to answer pertinent questions on such projects cannot be overstressed. The objective is to raise the consciousness of investors to undertake feasibility studies on their projects to identify key factors to be investigated to ask appropriate questions related to their projects and to enhance the skills of participants to carry out simple studies.
CONCEPT DEFINED. Process of gathering Data- It is the process of generating data related to a new project or an investment proposal and drawing appropriate conclusions in the light of data collected and the values of the project promoters; An Enquiry- feasibility study is an enquiry which consists of putting down on paper in quantitative terms the anticipated operations of a proposed project, whether this project be an extension of old facilities, a joint venture with another company or government, the purchase of new machine tools and squipment, etc;
Document or Report- It is also a document or report which shows with a minimum of bias the project being studied in a logical and orderly fashion and the investigation carried out on an enterprise or project as it relates to the feasibility of undertaking the project and its commercial viability. Preliminary Surveys- Note that a feasibility study is undertaken after preliminary surveys and appraisal (prefeasibility studies) have led to the selection and formulation of a business idea.
The feasibility study is therefore a screening process to determine the quality and appropriateness of this investment or initiative.
Martins W Okosina is a Professional Administrator by Profession with over 5years of experience. Find out how effective business consulting can help you. www.naijaconsultingpower.com
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