The predevelopment phase contains many moving parts that come together to get a project off the ground. But, before construction can begin, your team needs to know if the project is viable in the first place. Among all the entitlements, contractor bids and design meetings, project owners should consider adding feasibility studies to the planning process.
Feasibility studies shed light on your project plans and can illuminate potential pitfalls that would hinder progress towards the finished development. Aside from highlighting challenges, these studies also provide solutions that can help the project move forward.
Here’s a closer look at the purpose and importance of feasibility studies, the steps involved in commissioning them and how to leverage them into a successful development.
What is a feasibility study?
Simply put, a feasibility study determines whether project plans are possible. When a project owner comes up with an idea, they have to make sure the team can execute it within the allotted time, budget and resources. Feasibility studies also determine whether the project will earn the necessary approvals and comply with local regulations.
A feasibility study can save a development team precious time and money. These studies highlight potential flaws in the project plans before shovels hit the ground. It’s important to identify these pitfalls early in the development process so your team can adjust the scope of the project. In other words, feasibility studies help you solve problems before they arise.
Components of feasibility studies
The types of feasibility studies a team might conduct depend on the size, location and circumstances of the project. Complex projects usually require more feasibility studies because there are so many factors to take into consideration.
Regardless of the scope of a development, feasibility studies across almost every project share some of the same key components. Consider assessing these six essential factors in your project’s feasibility studies:
- Equipment and technology: Project teams conduct feasibility studies to determine whether they have access to the necessary resources to get the job done. Certain projects may require specialized machinery or computer software to implement construction plans. This section of the feasibility study will assess whether required technologies are available. If not, the team will either find a way to acquire them or adjust the project plans based on readily-available resources.
- Finances: Feasibility studies provide valuable insight on how your budget measures up to project demands. Before starting construction, you’ll want to know if you have enough money in the budget to pay for materials, labor, equipment and approvals. The collected data can provide an accurate estimate of how much you’ll pay for certain resources. It’s important to get these numbers ahead of time so you can identify places to cut costs if you go over budget.
- Permits and approvals: Every project must comply with building codes from its local jurisdiction. In some cases, a project owner might have to apply for easements, rezoning or utility permits. A feasibility study will determine whether it’s possible to acquire the necessary permits and approvals for the project to move forward. If there’s a chance local officials could deny an application, it’s better to learn this now and avoid legal action during or after the construction process.
- Labor availability: In order to complete a project on time, project owners must make sure there are enough skilled laborers available in the workforce. Aside from subcontractors, project owners will also have to secure designers, consultants, architects and engineers. A feasibility study can assess the current labor market to see if there are enough workers to contribute to your project. Understanding the labor market will help you avoid delays later in the project lifecycle.
- Project timeline: Part of the predevelopment phase involves setting an estimated completion date. Before putting shovels in the ground, the team should know whether it’s possible to complete the project within the desired timeframe. Feasibility studies assess many factors that influence the project timeline, such as supply chains, approvals, the labor market and changes to the project plan. After analyzing the results, your team might find it necessary to push back the completion date so contractors aren’t rushing through the project.
- Unique circumstances: Projects have their slight differences, and those differences will determine the need for additional feasibility studies. For instance, your local jurisdiction might require an environmental impact assessment to see how the project would affect the soil, groundwater, air quality and so on. Other feasibility studies exist to assess how well a project would fit into the surrounding community. Identify what makes your project unique, and consider whether these factors would benefit from a feasibility study.
Refine project plans with feasibility studies
Developmental teams rarely stick to their original project plans. It’s perfectly normal for a project to evolve throughout the planning process. Study results might be less than favorable, but that doesn’t mean you need to scrap the project altogether. Feasibility studies identify shortcomings in the original plans, allowing you to discover solutions you never would have encountered otherwise. If anything, feasibility studies make your project better than before—especially when you have the affiliated expertise of Sandbox Development Consultants on your side. Contact us today to discuss feasibility studies.