How does a financial/economic feasibility study work?
How does a financial/economic feasibility study work?

1. Develop a detailed plan for the project idea:
   It is important to develop a plan that explains the project idea and the main goals that you seek to achieve through this project, so that the team can pursue and achieve them.
2. Evaluate the market situation:
   Try to search for competitors who offer similar projects, then try to study their plans and discover their strengths, and how they were able to succeed in building these projects.
3. Identify project risks:
   It is very important to consider the problems that you may face during the management of your project and may hinder its success, so that you can address and avoid them early. Among the risks that you may face are:

Project cost risks.
Equipment and machinery cost risks.
Worker wage risks.
Expenses and fees risks.
Raw material costs risks.
Marketing costs risks for the project.
Competition risks.
Risks of development and new technology.
Risks of changing customer needs.
Sudden economic and legal risks.

4. Calculating the cost of the project:
   Projects differ from each other, but their material cost may frustrate its success, as there are several points that affect the financial plan that the company will follow, such as:

Do the company’s resources reach you from inside or outside the company.
The cost of the project.
The risks that may cost you a lot of money.
Where will the break-even point be in the project (the break-even point is the stage at which the project cost and revenues become equal).
It is very important in the financial study stage to make sure to conduct a preliminary study and a detailed study. What is the benefit of diversifying economic feasibility studies?

The merchant cannot rely on preliminary studies only, even if they are correct, because they only include general outlines of the project idea, but the subject must be studied more deeply so that you can make final decisions regarding the establishment of the project.