Feasibility Study In Saudi Arabia: Scope & Its Significance



Overview of Feasibility Study

A feasibility plan is used to find out how much a business or project is viable. This approach's goals and plans are financial and non-financial, and it serves as a roadmap. It determines whether a business or project is feasible or desirable.

A feasibility study is created for a new venture or project to find out its effectiveness in the long run. From both financial and non-financial views of a suggested idea, project, or business plan, it allows businesses to arrive at a well-thought-out decision regarding the predicted success of a project.

Companies in Saudi Arabia use feasibility studies to logically and objectively identify the advantages, disadvantages, chances, and threats that a given project might present concerning the currently available resources in a particular environment. Consequently, it is pivotal in making a project successful or a flop.

Why Do Companies in Saudi Use Feasibility Studies?

Every company has to focus on adding value for the consumers. But to do that, you have to make smart, often subtle trade-offs. For example, you have to choose between focusing on growth and concentrating on profit margin, between reinvestment and giving money back to shareholders, and how to divide up capital and other assets throughout your portfolio.

The evaluation of feasibility studies is done objectively based on both quantitative and qualitative data. This lets the client’s project managers and senior management look into a venture's evaluated likely results before investing too much time and financial resources, drastically reducing risk.

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Basic Structure of Feasibility Plan

In general, the information about the internal factors is workable, commercial, technical, and financial. The fundamentals also consist of non-financial aspects of the business.

Among these things are:

1. - Key actions
2. - Channels of distribution
3. - Important sources
4. - Customer segments
5. - Key partners
6. - Cost structure
7. - Value propositions
8. - Sources of revenue
9. - Customer relations management

Feasibility study describes how to create, deliver, and capture value.

Also, the financial section gives an overview of how much money you make and how much you spend each month, quarter, or year. The information will show up in the cash flow statement, the balance sheet, and the income statement.

The first budget for a business or project is made up of a feasibility study or business plan. It is used to compare the results at the end of the operation with the results at the beginning.

The difference between what was planned and what happened is used to make decisions.

Information on the external market situation complements the internal environment situation. All the data and information are gathered through either first-hand or second-hand research. The General Authority for Statistics is undoubtedly one of the best and most reliable organizations to get information in the country.

Opportunities and threats come from the outside environment of a business or project, while strengths and weaknesses come from the inside. In this article, we also explain the different steps involved in conducting a feasibility study.

Different Steps of Feasibility Study

Below are a few steps that project owners take before launching a new company or business as part of a feasibility study.

1. It's important to explore and deliberate on the idea of a project. By analyzing different internal and external factors, this can be accomplished.
2. Find out if people will buy the goods or services. In this step, you must check whether the project's idea is real. Here, paying attention to and learning about what potential customers want and need is essential.
3. Think about the scope and nature of the project you are about to run.
4. The project's cost is figured out and considered. It has a big effect on the way the project will work.
5. In this step, you determine how much the project will make in sales over a certain amount of time and how much it will sell for.
6. Make a final decision about the project's outcome based on cash flow, scalability, and other benefits for the end users.

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Actual Cost of Feasibility Study

There is no set price for feasibility analysis, which varies depending on multiple factors.

It is contingent on the quality of the project and how much money you plan to spend. If you spend less, it's much easier to do a feasibility study for a small project. But if the project is big and will cost a lot of money, you need to do a full-fledged feasibility study.

How much experience the project manager has and how well he can handle all parts of the project. Such factors are always considered. One example is the ability to spot problems with the project and let the business owner know its possible ramifications.

Significance of Feasibility Study

It's a fantastic way to help business owners make the right choice. The feasibility study offers a practical way to persuade local, regional, and international financial centers and business bodies. The study of economic feasibility In Saudi Arabia and project evaluation is a useful and scientific way to look at projects that people want to start.

A feasibility study aims to back up the decision to invest in a business project, which should be premised on economic and technical knowledge. If you want to know how likely it is that the project can be set up before it is put into action? You can get answers to your questions through this study.

Before making a smart investment decision, a feasibility study must show that there is a big enough market for the project to be made and developed as well as having access to the raw materials, labor, and infrastructure that are needed. Only then you will be able to make huge business decisions and start new ventures.