If you work in a bank, private equity, or investment firm, you are likely already familiar with feasibility studies and their use in properly supporting the evaluation of a proposal. However, a feasibility study is often an unfamiliar tool to business owners and is one that could have a dramatic impact the success of their initiatives. It is important to talk to your clients about what a feasibility study is, how it can benefit them, and how to choose a qualified firm to conduct it.
When done correctly, a feasibility study will clearly lay out the technical and economic feasibility of the business as a whole, or of a project under consideration. The well-executed feasibility study will also include market analysis, management evaluation, and a financial viability assessment that enables your leadership team to more accurately measure the probability of successful outcomes for the business or project. Further, a feasibility study has the potential to provide a business with a roadmap for successfully navigating potential challenges. In short, a feasibility study is an excellent way to identify opportunities while simultaneously mitigating risk.
Read on to see how to talk to your clients about how a feasibility study can benefit their business initiatives and feel free to share it with colleagues!
Why Do You Need a Feasibility Study Expert?
A feasibility study is required for businesses seeking to raise funds or apply for loans over a certain amount (i.e., $5 million for the USDA). It will be used by potential equity and/or debt investors to answer basic questions about your business and to give them an indicator as to the likelihood of its success. So, the short answer is, if the business is seeking a USDA loan then they have to have one!
That said, these studies are not just for loan purposes and can be an excellent resource for internal planning purposes, identifying obstacles and opportunities that may not have been initially foreseen. This is an invaluable asset as the feasibility study helps you unveil the different ways your business can grow and identify the risks that must be mitigated. It illuminates the likelihood of your project’s success while considering relevant factors, including economic, market, technical, financial, and management constraints.
The study further helps you convince investors and /or banks that your project is worth investing in, as it enables you to address how and where a project can be done, with detailed assessments of viability. Additionally, as mentioned before, should you be applying for a USDA Business and Industry loan and grant, a feasibility study conducted by a qualified firm will be required for your application. It can provide a detailed analysis of the technical capabilities, financial viability, which supports your business in identifying market growth opportunities for the specific product you will be developing, as well as assisting in the exact target market selection process, including market segmentation and positioning. A feasibility study is a great way to refine your outcome-driven innovation, as it helps you to examine your project with tremendous depth and insight prior to initiating the endeavor.
It is also important to note that who you choose to conduct the feasibility study is critical. The USDA, in particular, has requirements that feasibility study analysts must meet. Should you choose an unqualified provider, the study may be rejected. Further, it is important to understand the level of depth provided in each firm’s feasibility study. Some firms will provide the basics needed and nothing further. While this may be sufficient to obtain funding, the study will give little insights to further assist your business.
Why to choose August Brown for Feasibility Study?
At August Brown, we pride ourselves on the depth and quality of our feasibility studies. We have assembled a team with decades of experience across a variety of industries in order to best support our clients. This also allows us to conduct our feasibility analyses with unmatched analytical rigor. In addition to the core analysis mentioned above, we build compelling financial models with Monte Carlo simulations that display realistic outcomes, meticulously hone in on the risk factors, and offer risk mitigation insights that will smoothen the diligence process of investors before a funding or acquisition event. The depth and insight provided by our feasibility studies can offer a clear roadmap to any business looking to assess the viability of a project. With an August Brown feasibility study, you can be sure your clients are getting the highest quality analysis available. We further support this with our post-transaction services, which work to implement continuous improvement initiatives that will continue to enhance the value of the firm. To learn more, contact our offices today at office@augustbrown.com or just go ahead set up your free strategy session with our team.
FAQ’s
What is a feasibility study and why is it important for business owners?
A feasibility study assesses the technical and economic viability of a business or project, helping business owners identify opportunities and mitigate risks.
How can a feasibility study benefit a business initiative?
A well-executed feasibility study provides market analysis, management evaluation, and financial viability assessment, enabling accurate measurement of the project’s probability of success and offering a roadmap to navigate potential challenges.
Why is a feasibility study necessary for businesses seeking funds or loans?
Feasibility studies are required by potential equity and debt investors to evaluate the likelihood of a business’s success and answer basic questions about its operations. They are particularly necessary when applying for loans over a certain amount.
Can a feasibility study be useful for internal planning purposes?
Absolutely. Feasibility studies help businesses uncover unforeseen obstacles and opportunities, refine project outcomes, and identify risks that need to be mitigated. They provide valuable insights for internal planning and growth strategies.
Why is it important to choose a qualified firm to conduct a feasibility study?
A qualified firm ensures compliance with specific requirements, such as those imposed by the USDA. An unqualified provider may result in rejection of the study. Additionally, choosing a firm with depth and quality ensures a more thorough analysis and valuable insights beyond basic requirements.
What sets August Brown apart as a provider of feasibility studies?
August Brown offers depth and quality in their feasibility studies, backed by a team with extensive industry experience. Their rigorous analysis includes comprehensive financial models and risk mitigation insights. August Brown also provide post-transaction services to enhance the value of the firm.
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