Publish Date: 1394/11/13
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FAQ

I need a feasibility study plan in a week. Can you accomplish it?

We go the extra mile for our clients but there is almost no way to complete a project in such a short timeframe. A typical feasibility study plan takes between three and six weeks provided the required documents are available. Moreover, if the project is technically more involved, the deadline needs to be extended such that it may take months to get through it. All in all, getting the required documents for a feasibility study is a time-consuming process on its own; however, the information provided by the applicant or the firm's inside knowledge can help further a project. 

 

What do you think is a decent idea for investment? What are its features?

That what represents a good idea for investment derives from two factors, namely circumstances and investor. Circumstances refers to the three parts of a feasibility study. Will the project be successful by merely going to implementation? Many an idea was appealing some time. Since the market was void of competitors and this allowed a product to sell in large quantities.  Those ideas have been put into practice today and the products have sorted themselves out, and if you are willing to enter that market you will have to compete with them. As for certain products, we are facing a saturated market i.e. in the domestic market, supply is either equal to demand or so close to it. From this perspective, the yesterday's good idea is no longer so today. This the project "A" was successfully carried out the other year is no good reason for a similar project to be successful today. Here "market studies" arrives on the scene as an issue that matters a lot. You have to take a look on the market size to see if it is large enough to let a new producer get in. 

From market perspective, a good idea is when there is no more producer or provider for a certain product or service. That is, if the idea is new, the producer will enjoy a competitor-free market but here a second perspective opens up: what technical condition is the project in? The newer an idea the better it will be in terms of market; however, it is likely to go through a higher technical risk. One of the biggest problems of a knowledge-based scheme is of technical risk. In fact, since the project has not been implemented in the country so far, it involves certain know-how and experts and must be given some thought. From technical angle, we also have to turn our attention to technology type. Upon arriving new technologies, the old technologies are no longer of use and consider dated. For example, audio cassettes were produced at a time in Iran when they had almost reached the end of their lifecycle and CDs & DVDs had taken their place. Accordingly, the idea was way off base. For another example, developments in brick production make the energy consumption reduce drastically. Normally, old technologies lose their competing power after elapsing some time. Given the escalation of technology's advancement, a plan should definitely enjoy up-to-date technology. 


From fiscal point of view, a decent idea is one that generates more profit. The IRR, the ROI and NPV are good criteria. We should bear in mind, however, to calculate correctly. Sometimes, sellers of machinery make up the figures for the sake of their sale. Here referral to a reliable advisor for accurate calculation is recommended. For example, if the wastes are not included, or the raw material/asking price is offered a bit lower/higher, can influence the ROI. From financial viewpoint, an ROI higher than the bank interest, makes the plan feasible. Naturally, the higher the ROI, the more feasible the plan will be. Moreover, the question here arises is if the business idea tailors to financial and executive power as well as the interests of the inventor. That is, personality, background, relations, experiences of an investor do count for a lot. 


How do I know Sepinud Shargh is a good match for my business?

As investment consultants, we can give advisory services to almost any legitimate business regardless of its size or scale. Offering investment ideas, winning the permits, market study, feasibility study, land allocation, purchasing machinery and ultimately implementing projects are some of the things we carry out. There is no question we may not be the best fit regarding every business type or certain industries. We would be glad to know your project situation and if it turned out unsatisfactory for you, your information will remain confidential with us. We also can give you a referral to some competent advisor. 


What are the goals of a feasibility study plan?

Feasibility studies usually pursue different goals. They differ in terms of their purposes, severity and details. Some of the types are as follows:

a.FS for the applicant himself: the purpose is, in effect, to make the investor aware of what technical/fiscal/market situation the project is in. in other words, the applicant wants to know how much the return on investment will be for an investor. How are the technical dimensions? What place will a product or service make for itself in the market? What risks may the project be confronted with? How much is the least amount of investment for the project? The applicant is now about to make up his mind as to whether he should have the project implemented or not. 


Under such circumstances, it is important to analyze true market information by means of right methods and minute details. Before the investor is faced with heavy losses in reality, he thinks he can analyze every dimension of the investment issue with just a paltry sum. It is at times essential that one go to more details for the sake of a precise examination. For example, some field research may be required as part of a market study or some visits to be paid to the machinery manufacturing factory or the product manufacturing unit in order to minimize the technical risks of the project.


Type 2: feasibility study to take banking facilities or to attract investors

A feasibility study is sometimes intended to finance a project through taking facilities or attracting foreign investment or domestic participation. In such cases, the applicant or client is not only positive about executing the project but also has mastery over different dimensions of the project; nevertheless, he embarks on preparing an FS so that the financing source (the bank/investor) can take a clear view of the project. Obviously, the feasibility plan must be formulated by a competent advisor. In addition, the intended format of the bank or of the investor must be observed. Nowadays, some formats are specific to certain banks and they recognize merely FSs designed in that format while others do not prescribe a specific type and accept FSs of different format. 


Type three: the feasibility study to be granted with a piece of land by Natural Resources Organization

Acquiring a piece of land from especial economic/free zones for industrial projects, or from seaports organization for the purpose of providing port services or industrial operations are of the cases an FS is required for. Such FSs are of different quality with regard to the respective authorities. Some organizations are so strict that they only accept a bankable FS; though, the target of land rent/aid would be attainable at some organizations with a pre-feasibility study alone.



Type Four: Feasibility Study to Obtain Permit

The ministry of industries and business and the ministry of agricultural jihad are of the ministries where the obtaining of an establishment permit (principle in agreement) is subject to submitting a scheme. However, a prefeasibility study would be acceptable and full details are not demanded. Even so, it may incur extra expenses if written poorly. Supposing the power consumption for a project is extremely high, the ministry of industries and businesses will force the applicant to pay for the power transformer or in a reverse situation when the power consumption is estimated lower than the required, it may lead to redoing the job, permit amendment or waste of time. 



We have some confidential information which shall not leak out. Do you sign a non-disclosure contract?

Of course. Keeping the clients' information secret is a given in professions like consultation. Secrecy is so important to be embodied in Sepinud's Charter of values. There included a clause in every agreement in accordance of which the advisor shall be duty-bound not to divulge the clients' information and also be able to obviate every concern. Nevertheless, a separate pact can be sealed if it comes to the push. 

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How does a techno-economic plan differ from a feasibility study plan?

Both are known as "feasibility study" by which it is meant an investment/business idea to be looked into from three different angles, namely market study, technical study and financial study. In the literature of investment, a feasibility study is usually perceived as if an investor or the compiler of the plan (advisor) is trying to provide acceptable explanations as to make it viable by any means even if there is no justification for the scheme in reality. While a feasibility study must remain neutral as with a positive/negative result and play it fair. 

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