Business Feasibility Analysis
BUSINESS FEASIBILITY ANALYSIS
Feasibility refers to the state or degree of an activity or project being easily done or accomplished. It is synonymous with the practicability or possibility of a proposed project. A feasibility study is therefore an analysis and evaluation of the potential that lies in a proposed project to give full assurance to the decision makers. As part of the study, it is required that one determines if a given project is technically feasible, feasible within the estimated cost, relevant to the current market size and will be profitable since the main aim behind any business venture lies in earning profits. It is performed so as to uncover the strengths, weaknesses, opportunities and threats exhibited and presented by an existing or proposed business. They are always conducted and especially in situations where large sums of money are at stake.
Abstract
The average construction project suffers cost overruns and its completion often takes longer than expected. This causes the owners to incur unnecessary costs and inconveniences in the process. To do away with this kind of scenario, the concept of construction companies came to life. This is whereby a company’s aim is to assemble all the required tools for a stated project into a single package to be sold to the consumer. It mainly helps developers, large companies and individual real estate owners. It does this by taking charge of the entire construction project and managing it from the onset of ground-breaking to its completion. The company then obtains a certain percentage of the total fee as payment for the service. This co-responds to the overall organizational goals which are aimed at ensuring completion of any undertaken project within a specified duration of time and bound by a specified budget.
In this case, I am taking over a family construction business and I conducted the feasibility study as follows.
History
Dating back to the nineteenth century during the industrial revolution, construction was one of the most crucial aspects of development and it was manifested in new kinds of transportation structures as well as more efficient building structures. However, soon after, following the rapid increase in population, there was an urgent need for major development of infrastructure to support the needs of the generations. This gave rise to advances in science and technology that ensured the construction developments took place much faster and with utmost efficiency. Formal education in the sector was also introduced so as to ensure that there were standards that governed the construction projects. (Upton)The Business Idea
These technological advances that have continued up to date formed the main support framework in the establishment of Block by Block Associates on 14th July 1969. Its aim was to create buildings and structures ranging from commercial houses, residential houses, bridges, office parks, excavations, demolitions, large scale paint jobs among others from plain ideas to be formulated by the clients within a specified duration of time and bound by a specified budget.
Organizational goals
• To manage large government or private owned development projects ensuring a smooth transition to its final stages.
On receiving a project, the company will proceed to carry out the following; purchase a suitable piece of land if it’s not already available, have the site surveyed by a land surveyor-who will assess various parameters of a designated tract of land to ensure that it can support the proposed structure giving maximum stability while also demarcating all the necessary boundaries. This is then followed by ensuring that a structural draft or design of the building is prepared by the architect. When it is ready, they see to it that the bills of quantities prepared by a quantity surveyor. This is basically an estimate of all the required materials and cost of labor. When all this is done, the actual putting up, alteration or repair of the structures is done by masons who are overseen by a foreman. All these constituents of the taskforce are provided by the company and are all included in the contract. This is a highly effective technique since a developer is able to accurately plan with minimal interruption to the ongoing project. It also enables potential home owners to attend to other matters without affecting the project.
• To provide counsel to prospective customers and developers.
• To guarantee client satisfaction and prompt completion of a project within the stipulated time.
• To provided services of the highest professional standard.
• To go by the client’s instruction unless instructed otherwise.
Industry Related Issues
The construction sector plays a key role in industrial growth since it requires very many different materials. They include cement, ballast, stones, sand, timber, glass, metal, tiles, roofing materials, plumbing equipment and electrical wires just to mention but a few all of which are sourced out of various industries. Through this interaction, it is evident that it contributes greatly to the total revenue earned by the concerned industries. It then goes on to contribute greatly to a country’s GDP through the income that gets earned by the workers on site while creating investment opportunities. This would therefore do well in any developing or already developed economy.
Target Market & Customer Related Issues
The general construction sector is one of the most flourishing in the present day world. The industry is very large and is not able to sometimes to meet the demands of all clients. This therefore presents an array of opportunities for a construction company. Their choice of customers depends on the size of their assets since it directly influences the size of project they are able to take up and see through to completion. For an average construction company, of not so large magnitude, the ideal market would be individuals looking to own homes and business people looking to build or restructure building premises. It is a very high risk business and the client selection must be done under high scrutiny to avoid incidences of customer dissatisfaction. In this case, we intend to mainly handle real estate of residential nature and rental units.
Founder(s) Related Issues
As we may all already know, anyone equipped with the relevant knowledge in a certain field is always in a better position to lead and take part in making of executive decisions. With this being said, I feel that I am a capable manager of the company since I am a qualified Quantity Surveyor by profession with 7 years experience. Within my job, I have overseen construction projects; both private and government owned and prepared bills of quantities to indicate the costs of materials and labor costs. I am fully registered with the National Association of Architects and Quantity Surveyors. The founder, my now retired father is a civil engineer by profession. Through the years, some of his skills have also been passed down to me through apprenticeship since I have been a junior associate for the past five years. With such experience at hand, I am confident that I am well equipped to tackle various challenges that may be presented to me.
Financial Issues
This is one of the factors that directly influence whether a contract will be fulfilled within the agreed time and budget. For this to be achieved, the company has to already have some savings to cover for unexpected losses. Losses are incurred where there is an understatement of the required amount. Some individual and some institutional contractors do not have in house competence required to execute the respective tasks to the desirable degree of satisfaction. Some also face the additional challenge of not being able to finance the employment of competent staff (Collins and Porras)Investing in machinery and equipment also cuts costs for renting them when required. They may include machines such as cranes, mixers and tractors. Some of these assets are not owned by the company at the moment. Their acquisition would therefore be a boost in the right direction ensuring that the organizational goals are achieved.
Overall Business Potential
Conclusively, taking into consideration all the aspects that would influence the potential price gain of the business, I feel confident that in this current economy, this business will be able to attain much more stability and flourish. As we all understand, housing is one of the human basic needs. It therefore ensures that our services will continue being relevant to the customer. With the growing need for expansion and modification of older structures, I am confident that this business choice is not only suitable but it also has a high capability to generate some substantial revenue while meeting all the organizational goals.
Work Cited
Bobrow, Edwin E. “Pioneering New Products: A Market Survival Guide.” New York: Homewood, 1987.
Collins, J. C. and J. Porras. “Building your company’s vision.” Harvard Business Review 74.5 (1996): 65-77.
Larcker, David F. and Brian Tayan. “Corporate Governance Matters: A Closer Look at Organizational Choices and Their Consequences.” Organizational Strategy, Business Models and Risk Management (2011): 21-53.
Upton, Dell. “Architecture in the United States.” Oxford: Oxford University Press, 1988. 153.
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