Feasibility study; It is the evaluation with necessary research from both technical and financial perspectives during the decision-making process of an initiative or project. Possible problems and threats are investigated and it is tried to predict whether the investment will reach the desired goal and whether it will bring profit.

The main purpose of a feasibility study is; It is to help the final decision makers to make the right decision by examining all aspects of an investment idea and making comprehensive analyzes and evaluations accompanied by relevant data and information.

What is a Feasibility Study and Why Is It Important?

Ideas and projects are meaningful and valuable to the extent that they can be implemented. The healthiest way to evaluate whether an idea or project can turn into a realistic, viable, sustainable and profitable investment is through a correct feasibility study about that idea and project.

The main purpose of a feasibility study is; It is to help the final decision makers to make the right decision by examining all aspects of an investment idea and making comprehensive analyzes and evaluations accompanied by relevant data and information.

In this article, a brief information will be provided about the method followed in the feasibility studies conducted by us as PAROJE Investment Consulting, which issues are included, the main headings of the feasibility report and the contents of these headings.

Although the volume and financial size of the project planned to be invested vary according to various parameters such as whether it is a greenfield investment or an M&A purchase, the sector in which the investment will be made and in which country it will be made. In a feasibility study, a comprehensive report will be prepared on the issues detailed under the main headings below and will be presented to the investor to help him make the final decision.

1. General View of the Sector to which the Investment Project Belongs

In this section, the conditions of the sector to which the investment project is related, both on a global and national scale, are analyzed in the light of the most up-to-date data. While making the said analysis, the current financial size of the relevant sector, the performance of previous years, export and import data, new investments made in recent years, mergers and acquisitions in the sector are evaluated on a global and national basis. While the aforementioned studies are being carried out, previous reports prepared by reliable institutions on the relevant sector, articles published by the academic world, news and comments made by the world’s leading media organs are examined in detail. In addition to these studies, the study is deepened in the light of the data obtained from the field by conducting one-on-one interviews with the leading representatives of the sector. This section also includes evaluations and forecasts regarding the growth potential of the sector and other expectations for the next five years.

2. Competition Conditions in the Industry and Analysis of Competitors

It is not a rational behavior to make an investment decision without having enough information about the current competitive conditions of the sector in which the investment is planned. The first step in making a comprehensive competitive analysis is to know the competitors in the sector well and to determine the necessary strategies to compete with these competitors. In order to determine the said strategies and take action, it is necessary to have sufficient information and data on the strengths, weaknesses, market shares, production costs, marketing methods, R&D and innovation capacities of the competitors both in terms of production and sales and marketing. In this part of the feasibility study, various evaluations are made about the market dynamics that have an impact on sectoral competition, as well as the regulatory and supervisory institutions and the legislation related to the sector.

3. Production Planning

If the subject of the feasibility study includes a production idea, the selection of the factory establishment location (land cost, legal permits, infrastructure quality, etc.), the supply of raw and auxiliary materials, the employment conditions of white and blue-collar workers, the public incentives provided to the investment region and the sector, and All factors that may directly or indirectly affect production, such as supports, supply, logistics and distribution channels, energy supply and costs, and thus unit and total production costs, are examined in detail. In addition to all these issues, detailed information and analyzes are included on issues such as the optimum installed capacity of the enterprise, the actual capacity usage and total production amounts for the first and subsequent years, the selection of machinery and equipment and their procurement costs, work flow and production scheme.

4. Marketing Planning

In order for the goods and/or services produced by the business to be sold in the targeted markets, it is essential to analyze the characteristics of the market, the factors affecting the demand, the taste, preference and purchasing power of the target customer group, the price elasticity of goods and services, and the prices of substitute and complementary goods and/or services. In this section of the report, considering the unit production costs, the most appropriate market entry price of the product should be evaluated, the channels of reaching the customer and distribution, the advertising and promotion activities of the product, the prices of the competitors’ products and other marketing and sales strategies that are important apart from the price. is given.

5. Human Resources, Management and Organization Planning

Issues such as departments (production, marketing, financial affairs, etc.), the duties and responsibilities of these departments, their relations with each other, the quality and quantity of the personnel to be employed in the departments are included in the feasibility report by adding the work flow and organization charts.

6. Economic and Financial Analysis

One of the most important functions of a feasibility study is to make the necessary calculations by considering the benefit and cost analyzes of the planned investment project with an accurate and realistic approach. In this context; Issues such as the minimum capital required for the realization of the project, financial resource planning (equity and external financing) and financing cost, expected return on investment and investment return rate/duration, net present value analysis are calculated in accordance with international methods and standards. The photograph that emerges as a result of the data and analyzes obtained from the calculations in question is extremely effective and decisive when making the final decision.

7. Risk Analysis and Risk Mitigation Measures

In the last part of the feasibility study, realistic analyzes and evaluations are made about the risks that the company may face, taking into account both global and national macroeconomic developments and expectations, as well as developments and expectations regarding the sector in which the investment will be made. Recommendations are made on how to eliminate the risk factors and what steps should be taken.

Thanks to the feasibility study conducted by PAROJE Investment Consulting, you will evaluate all the opportunities and risks related to the country and sector you plan to invest in, with a holistic perspective, and make the best and most accurate decision.