Feasibility Studies

A feasibilty study or report is usually undertaken by an independent individual or other third party to determine the strengths and weakness of an existing business organization, a proposed venture or other special opportunity. They focus upon and center around the question if a projected or other proposed enterprise, merger, acquisition or undertaking will
be financially and economically absorbed into the ongoing overall stream of business and commerce. If not, then what changes or alterations need . to be made to the project or venture in order to obtain acceptance. If such acceptance is not available or cannot readily be achieved then what projected changes or alterations could occur in the overall economy that would allow the proposed venture to become acceptable. In addition, the study seeks to determine and analyze if the new or proposed project will yield a positive cash flow and a projected rate of return to its owners.

A properly structured feasibility analysis (usually investigated, analyzed and prepared by a well seasoned Economist) will seek to provide solid historical insight into the industry or sector of the business or project under analysis. An overall outline of why this business or undertaking would add some special or unique features to an industry or sector in order to be or become acceptable, a listing of existing (or potential) competitors, source and use of funds, a budget, costs analysis, pro forma or existing financial statements, details about the project or potential project, an outline of the services or products the venture is seeking to manufacture or offer, the educational and business backgrounds of the Senior Management and Board of Directors, projected sales and marketing plans and other laws, rules and regulations that could come into play to affect the business and its economic / financial results are all major segments of such a study. In general a Feasibility Study is prepared and offered to those who might back, finance or support the venture before the technical development of a specific project is undertaken, as such additional efforts and output often cost significant sums.

Two (2) solid examples of feasibility studies that were undertaken by Lehrer Financial and Economic Advisory Services of special mention are –

  • The question, if a proposed hotel in Crested Butte, Colorado would be absorbed into that skiing community and would be profitable in nature, and
  • The question, if a proposed Assisted Living Facility just outside of Seattle, Washington would be profitable.

Feasibility Studies are almost always prepared on an agreed upon flat fee basis and are structured for the business owner to utilize the report’s output with several financial institutions to obtain the necessary financing for their proposed project. The fee includes multiple originals in order for the client / developer to work with several financial institutions at the same time for maximum efficiency and cost effectiveness.

Dr. Lehrer has been involved in banking, finance, economics and corporate dynamics for over thirty (30) years. When combined with his broad-based education, background, and prior assignments, he is well prepared to undertake such engagements and they are undertaken in an effective and cost-efficient manner.