It often happens to be unable to the investors from the implementation of the investment project was due to the technical, legal or economic reasons. If these investors had commissioned experts - and consultants to prepare a complete feasibility study of the project, they often hold them high expenditures may turn out that the project is useless. The alternative to this is to do a preliminary feasibility study before the detailed study objective is to make sure that there are no fundamental problems impeding the implementation of the investment project.
The initial feasibility study does not require deeply careful and detailed examination as is the case in the detailed feasibility studies which leads to intolerance of a large expense . And moving the initial feasibility study to clarify the following information:
- Estimate the products of the project, and this requires the description of market trends and current consumption rates, consumer tastes. etc.
- The availability of key factors of production, and this requires a study of raw materials that would be needed for the project of availability and quality. Also employment which will depend upon the project in terms of the extent to which its efficiency and levels of wages, etc.
- The identification phase which need special focus in detailed study (the market, production, finance etc).
- Estimate the required and the cost of operating the size of investment.
- Estimate the net profit expected from the project.
- Summary of the problems that could be facing the project, and the types of risks that could result. This requires economic, social and political environment in which the study of the project will be established.
- The estimated costs of the detailed feasibility study.