Hesham Khalafallah
Over my years in consulting and project development, and later after founding Heaven International for Project Management & Consulting in Kuwait in 2019, I have met many investors who were excited about a project idea and convinced it would succeed before testing it against the numbers. Some went ahead, only to discover too late that the market was smaller than expected, or that costs were far higher.
There is another type I always warn against: the investor drawn in by easy financing, who picks a project as a way to obtain funding rather than because it is a real opportunity, and then prepares a feasibility study whose only purpose is to win the lender’s approval. In that case, the financing itself turns from an opportunity into a burden, because the project was never honestly tested from the start.
This is where the real value of a feasibility study lies.
A feasibility study is not a formality
Some investors treat a feasibility study as a document required to obtain financing or a license. But a real study is a decision-making tool, and perhaps the most valuable thing it can tell you is: “Don’t start now,” “Start smaller,” or “Change the location or the target segment.”
The questions a study answers
A good feasibility study gives clear answers to questions such as:
• Is there real demand for the product or service? And who exactly are the customers?
• Who are the competitors? And what will set your project apart?
• What resources does the project need in terms of location, equipment, staff and licenses?
• How much capital does the project need? And when will it start making a profit?
• What are the expected risks? And how can they be managed?
The cost of a study versus the cost of a mistake
Some investors see the cost of a feasibility study as an extra expense. But the right comparison is between the cost of the study and the cost of a wrong decision that could wipe out the entire capital. A good study that uncovers a single error in pricing, market size or location saves many times its cost.
A study builds trust with partners and lenders
When an investor walks into a bank, a funding body or a meeting with a potential partner carrying a clear, well-structured study, they speak the language of numbers, not enthusiasm. This improves their chances of securing financing and partnerships, and cuts many discussions short.
When do you need a new study?
The need for a feasibility study is not limited to new projects. It also applies to:
• Expanding to a new branch, city or country.
• Adding a new product line or service.
• Entering a partnership or an acquisition.
• Restructuring an existing project that is facing difficulties.
Conclusion
A feasibility study is the stage where you test your idea on paper before testing it with your money. It is an investment in the right decision, not an extra expense. If you have a project idea or an expansion plan, I would be glad to discuss it with you and identify the type of study that suits it.
