Real Estate Feasibility Study

It is important to conduct a real estate feasibility study to examine the possible outcome either positive or negative for a real estate project before investing money, effort and time into it.  This study also deal in consideration for legal, technological and economic issues as well as other factors which are important for the completion of a real estate development.

There are five (4) steps in conduction a real estate feasibility study such as market analysis, location analysis, competition analysis and risk analysis.  During market analysis, the space supply and the development of space demand as well as the space vacancies should be examined.  Also, the assessment of supply and demand, vacancies, space and rent should take into consideration. The second step is the location analysis.  Location analysis includes the geographic dimensions as well as geographic structure and population structure.  It also assesses the employment and economic development.

In competition analysis, relevant competitive real estate should be identified.  You can prepare a checklist of criteria so that you will estimate the degree of completion of your goals and results respectively. While risk analysis is the identification of the risk such as the development risk and liquidation risk.  Examples of these risks are completion risk, cost overrun, financial risk, market and location risk.  Through identifying of risk, you can make a decision immediately to avoid problems to occur.

Kinds of Feasibility Study

Feasibility study is written as an evaluation to determine if the proposed project is feasible. It will assist and find out the probable market for the products as well as probable income.

  1. Real Estate Feasibility Study – It includes the testing of geographic location for real estate development project.
  2. Technology Feasibility Study – It is necessary to know if the technology needed for the project is available or exists.
  3. Market Feasibility Study – It is the study of market studies in certain location such as the demands of the customer or client.
  4. Resource Feasibility Study – It study how much time is available to complete the project or build a new system as well as the type and amount of resources needed.
  5. Operational Feasibility Study – It is include the work practices and procedure if the current organization will be supported by the new system or new project.
  6. Legal Feasibility Study – It is to know if a proposed project has a conflict to legal requirements.
  7. Cultural Feasibility Study – The proposed project should be evaluated for the impact on legal and general culture.

8.    Economic Feasibility Study – It is to determine if the proposed project is profitabke.

Business Franchising Tips

Franchising is allowing one party to another party the right to use its trademark or trade name  as well its business system and processes.  Business owner offer their business franchising to expand their business at a fast pace. Franchisee or franchisor is the one who owns the overall rights and trademarks of the company and allows its franchisees to use these rights and trademarks to do business.  The franchisee charge a franchisee fee for the rights to do business under the franchise name.  Also, the franchisor collects an ongoing franchise royalty fee from the franchisee.
Business franchising is considers one of the safest and risk free ways to start a business but it cost a lot of money.  These amounts of money are worth it if you choose a right business franchise according to your interest.

The following are some tips before franchising a particular business

  • Research the best franchise.  It is important to do a research because there are thousand of different business franchises.  Ask existing franchisees and customer to gather information and seek advice from friends, relatives and colleagues to determine the reputation of the business you want to franchise. Also, research for the local market to know the demands of the products or services you would like to offer.

 

  • Choose a franchise that you will enjoy.  Most business is successful because the owner of the business is very passionate.  If you are interested in your product or services, you will learn rapidly.  Being an expert to your business is important to running to any business.

 

  • Make sure that your franchise has a good profit model.  If there is a good profit model, it is easy to start up, run and maintain a successful business.  Business with reputation and strong brand names usually have a stronger profit model since customer pays higher price to receive best and trusted product or services.

 

  • Look for Integrity.  It is important that the business you want to franchise has integrity. It means that if your business is with high integrity, your reputation will grow and shines.

 

  • Make sure to understand contract clearly before signing it. Understand the terms and conditions.

10 Types of Feasibility Studies

Feasibility study is written to know if the project or business is possible to implement given a certain circumstances. It will show strengths and weaknesses before the project is planned and budgeted for. Through feasibility study, company can save time and money as well as other resources in the long run by preventing projects that are not feasible.

The following are types of feasibility study:

  1. Marketing Feasibility Study – demonstrate the target demographic.  If there is enough consumer in the market place.
  2. Operational Feasibility Study – evaluates if the system will operates will.
  3. Resource Feasibility Study – measures if there is enough resources are available such as the facilities to be used.
  4. Real Estate Feasibility Study – distinguishes if there is available land or property required to undertake the project
  5. Cultural Feasibility Study – knows the impact on local and general cultures.
  6. Schedule Feasibility Study – recognizes if the company has available time to complete the project
  7. Technical Feasibility Study – identifies if the company have technology that deals with the project including the processes and procedures needed for the success of the project
  8. Legal or Ethical Feasibility Study – reminds the legal implication and ethical consideration of the project
  9. Economic Feasibility Study – knows if the company has enough financial resources for the project.
  10. Comprehensive Feasibility Study – it looks all aspects of feasibility study including marketing, cultural, economic, real estate and many more.

Restaurant Feasibility Study

Before putting up a restaurant business, it is important to write a feasibility studies to analyze the current situation if it is possible to have a successful restaurant business.  Feasibility study is an effective tool to evaluate a business if it is feasible.

Some factors to consider are location, competition, price value strategies and population. Also, feasibility study evaluates terms of lease, rental rents, tax projections, cost, sales, and special assessments.

Restaurant feasibility study includes the financial analysis of the restaurant’s projected income and operating expenses.  It should provide a market analysis with ROI to be used as a basis for business plan.  It also included the capital budget expense, sales projections, labor costs, detailed profit and loss statements as well as the break even analysis.  Other items to be included are the working capital requirements, equipment and fixture costs, payback forecasts and analysis, pre-opening budget and all general costs estimates cost.

Restaurant feasibility study is written to evaluate the potential of having a restaurant in a certain place based on extensive research and investigations.  It is usually used for the reason of having potential investors of the restaurant to make an investment decision.
To sum up, restaurant feasibility study will definitely study the following elements such as the potential location, marketing figures, existing competition, industry, cost and expenses, and organizational structure.

Business Plan Benefits

Some thought that writing a business plan is a waste of time but it has a lot of benefits.  But there are numerous advantages and benefits of writing a business plan.  It helps to identify the potential problems and opportunities the business might have. Also, your business plan can be shared to your potential partners as well to your advisers and can be a source of funding.

Business plan will have impact on how your business will works throughout its life.  The components of business plan includes the business name, mission statement, product or service details, business vision, marketing strategies, financial plan as well as contingency plan. Make sure to use a simple and concise language which relevant to the field only when necessary so it’s easier for others to read.  You don’t need to write a formal business plan to reap the benefits but think the business plan as a list of methods and objectives to achieve your business goal.

Your business plan is a written document which describes your business together with its objectives and strategies you have.

To summarize, a business plan has the following benefits:

  • Clearly define your business objectives
  • Helps to get advice from entrepreneurs
  • Make it easier to ensure that all aspects are in track
  • Know exactly your financial planning as well as source of funding
  • Plan the growth of your business as well as the capital requirements
  • Identify the weak areas of your business as well as the strengths
  • Describe that all aspects of the plan are cohesive
  • Serve as reference to  your course of action

Economic Feasibility Study Analysis

Economic feasibility study is used to assess and determine the economic benefits to the company or organization that the proposed project will provide.  It shows the cost and benefit analysis in order to compare the total expected cost of each option against the expected benefits if the benefits outweigh the cost. It should have an expected return on the investment.

Cost and benefit analysis is different from financial cost and benefits.  The accounting tools including depreciation and capital charges are not included in an economic analysis.

Economic feasibility analysis is a method of knowing whether a business or project is worth the time and cost investment.  It is used to determine if the idea is cost effective.  Some organization or company use economic feasibility analysis in their decision making regarding business. It is conducted if they are able to adopt a new technology, constructing new facility or investing in a new property.

There are some things that might be considered in an economic feasibility analysis such as current market, the needs of clients or customers and success of similar projects or ventures. It will determine how much time it will take to achieve the desired results. Then, it will know if there is a demand for the things that a new project or new business will provide most especially if it is a service or a product for sale.

Technical Feasibility Study

One of the major components of a project feasibility study is technical study.  In case of product proposal, a technical study identifies whether the product could be produced at the highest possible quality level with minimum cost.

Factors to be considered in technical study

  • Appearance of the product such as physical, mechanical and chemical properties should be illustrated
  • Data flow or detail flow charts should indicate the material and energy requirement during the manufacturing process
  • Production schedule and plant size such as the production capacity and number of days that the project will operate per year and possible yearly production
  • Machine requirement such as machine specification and capacities as well as machine price and auxiliary equipment will also consider. Also include the availability of spare parts and repair services
  • Raw materials including the current and potential sources and cost of raw materials should also be determined
  • Location of the plant as well as the plant layout and structure
  • Waste disposal and utilities such as electricity, fuel, water and supplies.

Technical study in feasibility study can be an excellent means for trouble shooting and long term planning. It a method use of how the products and services will progress through your business to reach the target market. Other basic things need in technical study includes labor, materials, technology, and transportation.

Operational Feasibility Study

Operational feasibility study is written after analyzing the technical, economic and scheduling studies.  It should determine if the proposed project feasibility study will be implemented.  It will measure the proposed project if it can solve the current problems and satisfies the requirements identified during the analysis phase.

During operational feasibility study, social issues, external and internal issues also analyzed including manpower problems, manager resistance, organizational difference, policies and rules, social acceptability, legal aspects as well as government regulations. Operational feasibility study always measure all aspects needed

An operational feasibility study will determine if the proposed solution can be implemented without any hassle such as staffing. Through out the operation, anticipated operational risk should be identified as well as positive result including customer satisfaction to weigh if the propose project or study will still pursue.

In terms of computer upgrading or computer programs a solution, operational feasibility study is projected the proposed system if it can solve the current problems with the use of manual operation. Management or employee should also ready to accept the change. The proposed system also measure if it can provide reliable services as well cost effective information including accurate reports and if really benefits the company.

Marketing Feasibility Study

Marketing Feasibility study is written in order to know and identify the potential market and market competition. It is use as marketing tool to identify possible problems and obstacles for the implementation of new project or laughing new products or services. It should identify how things done including the sales projection and cost of the project.

Market feasibility study is used as assessment if the proposed business is going to be successful in terms of marketability. Such marketability includes the geographic location since market feasibility study also explains the importance of the business in the selected area. Proposed business proposal will be implemented based on the market feasibility study since it will evaluate the viability of a business proposal whether it will be success or failure.

Some elements of market feasibility study are current market including the market competition as well the expected future market potential.  Also, it included the prospective client and sources of income.

Market feasibility study is done through research such as having a questionnaire and surveys to know the status of the prospective client to know the exact need of the people in the area as well the demand of a certain product or services. It is a collection of information about the possible market that can be used in deciding how a product or services will be priced, delivered and marketed. In addition, don’t forget to collect information about the strengths and weaknesses of the competitors.