Feasibility studies have become quite common and necessary to explore the project’s scope. They provide insight into the market of the project, as well as highlight cost, investment, profitability, and loss. It is an opportunity for the authorities to develop insight into the ground realities and strategies to maximize their success.
Feasibility studies can lead to the approval or rejection of the project. Due to this, it is even more important or austerities to present the perfect picture and let the stakeholders decide their fate. Unintentional mistakes in feasibility studies can lead to bigger issues during the project lifespan. So, make sure to avoid them at all costs.
Keep scrolling down into the details of this article to learn and explore pitfalls you must avoid in feasibility studies and ensure the effectiveness of the reports.
Top 6 Pitfalls to Watch Out For in Feasibility Studies
Feasibility studies hold significance in earning a higher reputation, sponsorships, and investments for a project. However, it is highly dependent on the quality and authenticity of the report too. Overly highlighting or shadowing a few aspects may offer your timely profits but will cause a loss in the long run. So, you must avoid deliberate and unintentional pitfalls in feasibility studies.
Here are the major pitfalls you must watch out for in feasibility studies to boost their impact and authenticity.
1. Improper Sample Handling
Improper sample handling is the first and foremost pitfall you must watch out for in feasibility studies. Collecting the samples is the first step which also requires a great deal of expertise. The second and most important step is handling the samples. You need to explain and manage the sample as well as prepare reports to extract strategies from that. However, most organizations fail at sample handling and do not know how to put it to use. Due to this, they consult feasibility study companies in UAE and let experts manage and interpret the samples for their ease.
2. Underestimated Future Losses
Underestimated future losses are another notable pitfall to avoid in feasibility studies. Identifying the losses and developing strategies to lower them is one of the basic objectives of feasibility studies. However, some people deliberately underestimate their future losses, thinking that it will actually keep the losses minimal. High or low potential losses will not specifically impact the reputation of the project. You must avoid the wrong estimation as it will hinder developing strategies to mold the situation in your favor and actually lead to a loss in the long run.
3. Overestimated Investment Income
Overestimated investment income is another significant pitfall of feasibility studies you must avoid at all costs. The estimation of investment income will shed light on the investments you can secure to establish the foundation of your project and keep it running. You may develop project scopes and schedules in light of the investment income. Overestimating the investment income will cause a significant blow to your project as you might fail to get as much investment as you have planned. So, keep your estimations realistic and limited to enjoy the results.
4. Unrealistic Operating Expense Expectations
Unrealistic operating expense expectation is the next common pitfall of feasibility studies you must avoid. The operating expense of the project can increase due to the ever-rising inflation. On the other hand, inflation may not hit your project area, due to which the high estimation of the operating expense will be problematic too. Deliberately keeping the expense expectations high or low will put a question mark on the reputation of your project. So, avoid such tactics or mistakes.
5. Incomplete Tax Analysis
Incomplete tax analysis is another major pitfall of feasibility studies. The government authorities have clear and predefined tax policies. Before starting any project, you must ensure proper tax analysis and plan accordingly. The tax laws at the local and state level may vary, so pay attention to all related aspects. An incomplete tax analysis will leave you with a poor estimation of cost expense, failure in tax payments, and government sanctions. Avoid sabotaging the progress of your project even before starting it, and pay proper attention to feasibility reports.
6. Unrealistic Project Schedule
The unrealistic project schedule is the last and most crucial pitfall in feasibility studies. For instance, you are taking on a construction project. Apart from doing the paperwork, you will have to construct a building on the ground, which is dependent on several factors. Overlooking little details can make you set an unrealistic project schedule. Due to this, you will be unable to stay true to your words and earn monetary and reputational loss. You can hire feasibility study companies and let experts craft realistic schedules and ensure project success.
Are you falling prey to feasibility study pitfalls?
Feasibility studies require market knowledge and professional expertise. You are bound to commit mistakes if you lack in these areas. Consult and get professionals on board for realistic and progressive feasibility studies which ensure the success of your project.
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