The feasibility study must contain several key elements, namely:
§ The idea of the project: The nature of the project is determined in this step, whether (industrial – services – trade etc.). A simplified concept of the project is given and the environment it is intended for.
§ The need for the project: In this item the most important reasons for initiating this project. This item should be supported with statistics such as the number of similar projects in the area.
§ Basic raw materials for the project: There should be mention of the basic raw materials needed for the project, and where can it be purchased from.
§ Products: The products or services made or provided by the project must be mentioned.
§ Technical elements of the project: This should include several elements:
§ Stages of Manufacture: A detailed explanation of how the manufacture of any product will be done. Taking into account the balance of raw materials involved in manufacturing, and the quantities required for production.
§ Space and location: A description of the site where the project is located and the required space and the equipment for its establishment.
§ Service requirements of the project: This shows the needs of the project in terms of services such as water (square meters), electricity (kilowatts per hour), telephone and fuel (liters), it should be calculated and estimated in the form of money each month.
§ Machinery and equipment: The description of each machine or equipment needed for the project and power used for each (kilowatts) and whether the equipment is going to be domestic or imported. What spare parts required for the them and the price of the machines.
§ Raw materials needed for the project: The detailed description of each piece that goes into production, and packaging and the amount used, whether by weight or by the number of pieces.
§ Employment: A description of the type of employment required for the project. A description of the job duties, job titles and wages must be stated.
§ Working hours: Whether it is a one shift (8 hours) or two (16 hours) or three (24 hours).
§ Products: To be described, named and determined by the quantity as well as specifying the price of each item.
§ Packaging: The quality of materials used should be determined in packaging, with the addition of a poster showing all product data (product name and logos, if any). Also, the name of the producer, address and the name of the natural ingredients, additions and date of production and shelf-life should be on the packaging.
§ Quality: Quality elements should be prepared for the project’s products. Beginning with cleanliness of premises to the health of the employees depending on the type of the project.
§ Marketing: To disclose intended marketing schemes such as participating in various exhibitions or taking the wholesale approach.
§ Financial and economic study: One should prepare a budget for investment costs. Investment costs are split between direct costs and indirect costs. Direct costs are the raw materials, intermediate raw materials, wages and salaries. Indirect costs are electricity, fuel, maintenance, spare parts, marketing expenses, rental of premises and insurance on the buildings. Also, the value of annual depreciation is considered as indirect costs and is calculated as follows: 5% depreciation on buildings and installations; 10% on machinery; 10% on fixtures, fittings and furniture; 20% on transportation; 10% on establishment and testing; and 10% as an emergency reserve.
From the above, it is found that the fixed capital is: land - buildings and facilities - machinery and equipment - equipment, fixtures, fittings and furniture - means of transportation - establishment and testing costs – and the emergency reserve).
The working capital on the other hand is: raw materials and intermediate raw materials - wages and salaries - electricity and fuel - and maintenance and spare parts - marketing expenses - rent of buildings - securing buildings and equipment. And it is linked to capital cycle (monthly - bi-monthly etc.). Annual profits are calculated as follows:
Total annual sales / Total direct and indirect cost.