The feasibility study explains the required investments, the expected return and the external influences on the project, such as the laws of the state, competition and technological development, and the collection of basic information and data related to the economy in general and the project in particular. The data mainly includes costs and prices Inputs, raw materials, intermediate and assistance, water, electricity, energy, workers' wages, sources of finance, land costs, buildings, equipment and other fixed assets.
Target Market
The market study is the main point to clarify the feasibility of any project (commercial, industrial or service) to provide its products or services to the largest number of consumers and the ability of the project to continue and continue to work, so the owner of the investment opportunity to conduct a detailed survey of the market for all the information that helps To ensure their feasibility before entering into investment to see the potential for profit, and design the product ideally, and identify the raw materials they need, and determine the appropriate price, and to know the behavior of consumers and their needs.
Market research includes the following steps:
- Product: Describe the product (s) with a clear and comprehensive description, and add samples, photographs and brochures, as well as a statement of the specifications and standards applicable to the product.
- Supply and demand: Determining the percentage of opportunities of local producers and their production capacities, and determining the quantities imported, their products and products and their estimated market share. The size of the demand can be determined by subtracting the volume of exports from the product from the total sales of local producers and imports, ie the margin between what was put on the market and what And it is possible to know this information from the statistics of foreign trade issued by the General Department of Statistics, and can know the products manufactured locally from the website of the Ministry of Commerce and Industry, You can also see demand from the list of previous sales to the owner of the project if the size of his previous activity, and a foreign partner, if any, but if the project is intended exclusively to the product in a particular area marketing should focus on this region.
- Price: Studying and analyzing the prevailing price structure of the product in the local market and any other markets related to the project, knowing the price of selling the product from the local factories and the import price, and then pricing the new product in light of the prices and expected production cost.
- Expected sales and market share Estimates of the total demand volume on the project’s products, specifications and future expectations for demand and then the estimated expected volume of production and production capacity based on its expected share of domestic and foreign markets.
- Competition: Studying the effects of competition and the knowledge of competitors and their strengths is important whether internal or external competition in order to reach the ways of firm presence in the market, both domestic and external, there are strengths and weaknesses of each competitor.
- Distribution: Identify sales and distribution channels, develop marketing strategy and methods suitable for distribution, search for wholesale sales or conclude a marketing agreement, facilitate the product from the factory to the end consumer through the most efficient and low-cost distribution channels.
Technical and procedural details:
The technical study is concerned with the definition of the industry concerned, the economies of scale, the factors affecting them, and the sources of technology covering the following aspects:
- The location of the project is selected. The requirements of the infrastructure are determined from electricity, water, roads, storage, transportation and communications. The most suitable geographic and technical locations for the establishment of the project are examined not only in comparison between city and city, Where some industrial projects may require specific specifications and requirements such as proximity to the project site from sources of raw materials and the availability of regular and equipped means of transportation and others.
- Development of the project outline: taking into account all its needs of facilities, possibilities and prospects for future expansion, identification of the land area including the area of manufacturing facilities, production, storage, management, corridors, modes of transport and other areas designated for industrial activities, identification of project needs of machinery, Spare parts, techniques, sources, raw materials, intermediate and other necessary operating requirements (local and imported), indicating their quantities, sources and prices, and determining the project’s needs of electricity, water, fuel, oil and sewage. Statement of sources or how the availability and cost, as well as packaging materials Mobeian sources and cost, and statement handling, transport, distribution and storage ways.
- Machinery, equipment and manufacturing method: The method of manufacturing is studied from the entry of raw materials to the arrival of the final product and if the product has several stages, the study of each stage separately, including detailed steps for the processes of product formation and additives overlapping in the production line. The investor must know the quality and number of machines and machines for the production process and support operations. This involves technical specifications such as the necessary electrical energy, cooling or steam services, air pressure of the machine, and the way of controlling the factory environment such as entering the air and leaving it to control the appropriate temperature or air conditioning the appropriate. Humidity. The food industry also needs preventive health needs, and for the toxic gas industry it needs to take safety measures to protect workers and public health. The most important information to be maintained by the project owner is the detailed plan, location of machines and equipment inside the building, places of storage of raw materials, materials under manufacture, finished products, maintenance workshop site, laboratory, etc. Attention should be given to the smooth flow of production, and to drawing up a diagram illustrating the route of the material or raw materials from handling through various configurations to packaging, if any.
- Waste treatment, safety and safety: Each plant has outputs or residues resulting from the manufacturing process. It is therefore important to describe the methods of treating the waste of the plant whether gas or liquid and solid to make it conform to the specifications and know the equipment for treatment of unwanted industrial waste Treatment of liquid waste and air purifiers). At this stage, a table showing all machines, manufacturing machines and equipment for fire fighting, air conditioning, water treatment, safety devices, backup power generators and laboratory equipment is included and a special table for the internal transport equipment of the factory, such as forklifts, mobile cranes, Under the above item.
- Buildings: In the case of the preparation of the study of buildings, the standards and requirements of the building on the site of the Industrial Property Authority must be observed. The general plan of the factory shows the area, industrial buildings, service buildings and connections with the main utilities (sewage, water and electricity). Building drawings for the building components, floors and foundations, brief descriptions of the main features of the buildings, a diagram indicating safety equipment and equipment, minimizing the risks and methods necessary to ensure the safety of the plant and its personnel to protect against fire hazards or any risks resulting from Manufacturing or transport operations. After knowing the required areas, buildings and supporting services and types, we can obtain the prices of buildings, establishments and civil works in and out.
- Search for sources of materials: means primary raw materials and packaging materials with an indication of their source or alternative sources of purchase.
- Furniture and fixtures: In addition to the costs required for furniture and office equipment such as office furniture, restaurant furniture and equipment, computers, telephone system, printers, photocopiers, etc.
- Participation Agreements: In the event of a license or concession agreement, there will be annual Orsum amounts or percentage of sales, production capacity or net profits. The agreement shall specify the responsibility of the licensed entity and its participation in technical management and technical services for installation, operation, maintenance, design rights, drawings and technical know-how With the proposed changes being clarified.
Costs and Financial Preparedness:
It includes the estimation of all investment and operational costs and analysis of financial and economic feasibility of the following project:
- Capital costs: means fixed assets, working capital and operating expenses, which include expenditures on consultancy studies, travel and transportation, costs of
- establishing a company, licenses, etc.
- Sources of funding: include the available costs locally and externally and propose suitable sources, whether fully self-contained or through investment loans or through participation.
- Determination of capital structure (ratio of capital to loans) with estimated cost of financing in light of the terms and conditions of available financing alternatives.
- Determine fixed and variable production costs.
- Development of project financial statements and expected flows showing total income and net income of the project.
- Analysis of financial and commercial feasibility indicators for the project, including commercial profitability, internal rate of return and recovery period.