It may sound obvious, but determining the feasibility of an upcoming real estate or construction project sets you up for success. Doing the preliminary research and analysis brings an understanding of the potential challenges, feasible solutions and depth of the impact to your organization. Real estate and construction projects are a huge commitment to any organization or institution. It is worth your while to understand the feasibility of a complicated project. So, where do you begin?
Your project management team will lead the effort while getting input from internal stakeholders and industry consultants.
A feasibility study is an analysis of how successfully a project can be completed, accounting for all factors that affect it: economic, technological, legal and scheduling factors. The goal of a feasibility study is to place emphasis on potential problems that could occur if the project is pursued. The study will determine if, after all significant factors are considered, the project should be pursued; and if so, how the project should be pursued. The feasibility study allows a business or institution to address where and how it will operate, potential risks and the necessary funding to complete the project.
Before the project gets started. Clients use feasibility studies to determine potential positive and negative outcomes before investing considerable time and capital into it.
The project management team will compile the report from a variety of resources. Insights from the clients are the primary subject matter. Understanding project goals, priorities, budgets, schedules, internal and external resources, etc. is critical to the accuracy and reliability of a feasibility study.
Then, the PM team will look to a host of external factors and track down information from consultants, agencies, municipalities, etc. External factors that should be detailed in a feasibility study include:
- Environmental impacts (EIA)
- Planning permissions needed from local municipalities
- Other legal/statutory approvals needed
- Need/availability of the re-use any existing facilities or equipment
- Site conditions
- Appraisals, geotechnical studies, assessment of any site contamination, uses of adjoining land, easements and restrictive covenants, environmental impacts, etc.
- Assessment of operational and maintenance issues
- Availability of services
- Procurement options
It is absolutely critical to understand if your project is feasible before you start. You want to understand the viability of the project as a whole, and each aspect of the project.
A feasibility study will cover all potential threats and specific concerns about the project. It will provide an in-depth outline of various scenarios examined, and the implications, strengths and weaknesses of each. While the decision whether to proceed may still be a difficult one, given the many, many factors explored in the study, the accumulation of information will empower all decision makers to be able to make an informed, educated go/no-go decision.