If you intend to carry out any kind of economic activity, including the construction or development of an industrial unit, you are applying for feasibility studies and preparing a justification plan, in fact, you will need extensive investigations before implementing your plan. Due to the wide range and different aspects of the issues investigated in an economic and industrial investment, the report resulting from this investigation should be prepared in a systematic and specific format and its calculations should be done based on accepted standard methods so that it can be used for various decisions in The case of this investment can be reviewed and accepted by everyone. This analysis and report, which is called a justification plan or a feasibility report, is the most important tool in helping to make a decision about an investment.
What are feasibility studies?
As mentioned, feasibility studies are comprehensive studies about an investment that answer the basic questions of investors about it before starting the implementation phase. Usually, the result of feasibility studies is a complete report on the findings of these investigations, which is called a feasibility report or a justification plan.
What items are reviewed in the justification plan?
Feasibility studies are a comprehensive review, and this comprehensiveness is because there are many questions in the minds of investors regarding the implementation of the plan. As its name suggests, perhaps the most important question is the feasibility of a plan. But keep in mind that usually the answer to this question is whether it is economic or not, whether it is economically attractive or not, whether it is possible to finance it or not, or whether there is an attractive market for selling its products or not, or in Comparing with other plans, does it have advantages or not? These are the main questions about the plan. Basically, carrying out feasibility studies clarifies many issues regarding the implementation of the plan and its exploitation. Some of these questions, which are actually the main topics investigated in feasibility studies, include the following:
1- Subjects, calculations and financial forecasts:
One of the most important questions in private sector investments and projects that are created for profit and wealth production are financial issues. These topics include extensive calculations in different parts of the plan and forecasting for different periods. These topics include the answers to these questions. Therefore, when you carry out a feasibility study for your plan and prepare a justification plan, you have accurately calculated how much capital is needed to implement the plan, what are the uses of this capital, where are the sources of this capital, and what is the investment return of the plan. What effect will the time value of money have on the project numbers in the form of expected profits from capital providers? How much is your annual profit, how much are your annual expenses and working capital, what is the status of accounting and financial indicators and…
2- Technical issues:
Keep in mind that feasibility studies are extensive and integrated reviews. This means that the answer to the questions of the financial sector depends on conducting technical studies and… and vice versa. The meaning of the technical part is the investigations about the facilities for the production of goods or services in the plan. Also, the facilities related to investment, construction and implementation of the plan, for example, the details of the construction of the required buildings, supply of facilities, supply of raw materials, production processes and product development, manpower, logistics, etc.
Market topics:
One of the most basic issues that occupy the minds of investors is the market for selling their products after the implementation of the investment. Complete reviews and information about markets and potential customers, market traction, competitors, sales records, marketing methods, market segments, factors influencing sales… are reviewed in the feasibility report. In this case, in addition to providing complete information to the applicants, plans to enter the market are suggested and reviewed.
Schedule and implementation considerations:
In the justification plan, the implementation schedule of the desired plan, as well as the requirements and executive considerations related to it, are considered with details and different levels of work failure.
rest of Information:
Complete information about the product specifications, the advantages of the project implementation, the conditions of the project implementation site, technical issues including maintenance and repairs and waste, the expertise of manpower, the flow of materials and production and support processes, etc. in the explanatory plan. Expressed.