Feasibility Study Services In UAE
MAK provides Feasibility Study Services in the UAE, assisting you in evaluating the likelihood of success or failure for your business venture. Our feasibility study delves into critical aspects such as market scope, HR structure, financial viability, and other operational facets of your business. At MAK, you will receive a thorough analysis of competitive factors, along with assessments of demographic, economic, legal, financial, and technical risks. Our team of experienced feasibility experts at MAK excels in crafting meticulous business plans and conducting comprehensive feasibility studies, culminating in detailed feasibility study reports.
Why Feasibility Study?
The UAE has emerged as a rapidly growing economy, providing an ideal environment for businesses to thrive. However, the success of your venture hinges on the conducive environment and the operational approach you adopt. It is crucial to analyze factors such as funding availability and identify potential obstacles to prepare and move forward. Whether you are a newcomer or an established player, you may sometimes struggle to recognize and address these critical areas. This is where the importance of Feasibility Study Services for your organization becomes evident.
A feasibility study involves a comprehensive analysis of various factors, including technical, financial, and legal aspects of a project. It aims to determine the likelihood of successfully completing the project. Organizations, whether new or established, utilize feasibility study services in the UAE to identify and mitigate potential positive and negative outcomes associated with a project.
In business management, a feasibility study is a vital process. MAK’s feasibility study services in the UAE encompass a thorough analysis to grasp the complete functioning of a business project. This involves a detailed assessment of opportunities and obstacles at each phase of the business before embarking on the actual procedures. The goal is to formulate relevant strategies for the growth of your business.
Objectives of Feasibility Study
Conducting a feasibility study is a substantial step in business administration, serving various purposes such as:
- Gaining a comprehensive understanding of all aspects related to the project, concept, or plan.
- Identifying potential challenges that might hinder the smooth implementation of the project.
- Evaluating the worthiness of undertaking the project through a thorough investigation.
- Determining the required capital for initiating and establishing the business.
- Preventing the company from entering into risky ventures without proper consideration.
- Projecting the anticipated benefits stemming from the investment.
Importance of Feasibility Studies
- It empowers a business to make informed decisions regarding its location and operational strategies.
- It aids in recognizing potential obstacles that could impede the smooth functioning of the business.
- It assists in calculating the required funding to initiate and establish the business.
- It guides in formulating marketing strategies to convince investors that investing in a specific project or business is a prudent choice.
How to Conduct a Feasibility Study?
- Solicit feedback on the new concept from suitable investors.
- Examine and inquire about your data to ensure its coherence.
- Commence market survey research to enhance data collection.
- Compose an organizational, operational, or business plan.
- Formulate a projected income statement.
- Develop an opening day balance sheet.
- Make an initial “go” or “no-go” decision on whether to proceed with the plan.
Different Areas of Feasibility Studies
The different areas of feasibility studies are mentioned below:
1. Financial Feasibility Study
When business proprietors conceptualize a new project, their initial step involves conducting a feasibility study to ascertain its viability. A comprehensive feasibility study encompasses an examination of the market, analysis of technical and production aspects, and consideration of economic factors.
This study assesses the economic feasibility of the envisioned endeavor by scrutinizing start-up budgets, operational costs, cash flow, and forecasting future performance. The outcomes of a financial feasibility study play a crucial role in determining the financial feasibility of the proposed project and projecting the rate of return on invested capital.
The foundational steps of a Financial Feasibility Study involve:
a. Recognises the Start-up Expenses
As the initial step in preparing the financial feasibility analysis, MAK experts identify the costs required to initiate the project. MAK experts concentrate on and assess the following areas:
- Purchase cost of land and building
- Acquisition of equipment
- Authorizations and licenses
- Credits necessary for office space occupancy
- Initial purchases for resources
- Legal and accounting fees for incorporation
- Office furniture and supplies
- Utilities
- Employee salaries
- Advertisement costs
- Insurance premiums
While many of these are upfront costs, they demand careful consideration before the business commences its operations.
b. Concoct Profit and Cash Flow Prognoses
Following the identification of start-up expenses, MAK formulates the anticipated sales, expenses, and cash flow statement to evaluate the financial feasibility of the projected endeavor. In-depth budget analyses are crafted at this stage and are subject to periodic revisions based on the progress of the work.
The cash flow prognosis delineates the funds required for start-up and pinpoints the sources of income.
c. Judges the Return on Invested Assets (ROI)
We assess the potential for negative cash flows in the initial period by utilizing cash flow projections, profit forecasts, and sales projections. If the generation of internal cash flow is deemed inadequate, we devise solutions to address this shortfall.
The determination of the project’s financial viability hinges on the projected profit on the invested capital. This evaluation enables us to understand how the project will attract investors and the overall financial return it will yield.
The estimation of financial feasibility employs various common approaches, some of which are outlined below:
Net Present Value (NPV) Approach:
In the NPV approach, a percentage rate is applied to discount future cash flows to their present value. If the NPV of the discounted cash flows exceeds the initial investment cost, the project is considered viable and should be accepted.
Internal Rate of Return (IRR) Approach:
The Internal Rate of Return Approach employs a similar method to calculate the NPV of cash flows. It identifies the discount rate that equates the NPV of cash outflows and inflows to zero. IRR serves as a metric for comparing the attractiveness of different projects.
Payback Retro (PR) Approach:
The payback retro represents the time required for the project’s profits to recover the investment expenses. The PR approach does not incorporate the time value of money, which is a factor in assessing IRR or NPV for a venture.
2. Market Feasibility Study
In conducting market feasibility analyses, MAK carefully considers the goods or services industry, the existing competition in the market, and the potential customer base. These evaluations serve as crucial factors in determining the anticipated sales of the company.
- The significance of a Market Feasibility Study lies in:
- Assessing a given project’s competitive standing in a specific market.
- Ensuring there is demand for the proposed project within that market.
Areas of concentration:
We conduct a thorough market study to identify the type of product that is both desirable and competitive within the market. Our focus encompasses:
- Defining the Primary Market Area
- Investigating market trends
- Examining demographic trends (population-related) within the specified market
- Analyzing economic trends (household counts) within the specified market
- Conducting an on-site evaluation of the designated location
3. Mechanical Feasibility Study
The mechanical feasibility study involves an examination of the technical aspects of the support systems crucial for the seamless operation of the business. This study comprises essential details for the smooth functioning of the business, including:
- Delivery mechanisms for Products or Services
- Transportation methods
- Labor delivery processes
- Material and other Technology delivery methods
4. Executive Feasibility Study
In the Executive Feasibility Study, MAK directs attention to the following aspects:
- The professional background of the business experts
- The requisite professional skills for the business experts
- The legal framework of the business
- The organizational structure of the business
Why MAK?
MAK Accounting and Bookkeeping Services LLC stands as a prominent provider of Feasibility Study Services to businesses across the UAE, offering innovative strategies to enhance your business operations. With a customer-centric approach, we prioritize the satisfaction of our clients, ensuring they are not overwhelmed by their business challenges.
In addition to delivering feasibility study services in the UAE, we extend our expertise to Business Services, Accounting & Bookkeeping Services, Auditing Services, Tax & VAT Filing Services, and Due Diligence Services for business leaders in the UAE.
Should you require any of our services or seek further information, please feel free to get in touch. Our experts are ready to provide a one-hour free consultation to address your queries.