Feasibility Study includes a basic demographic and needs analysis, financial questionnaire/Proforma statement and report. It is based upon conversations with you, an exchange of information and a review of current industry trend data. We furnish you with an “Assumptions Form and Sample form to identify financial values to be used in the study. The revenue figures are based upon identified factors (assumptions) and industry trends. The costs are based upon averages. Local data and your equity/expected rate of return are from you
Demographics are organized in three zones (either distance or time of travel). The first zone is the market to control. The second zone is the intermediate market which you can competitively impact. The third zone is the extended market, usually with other centers having a greater influence. The “target market” is then identified. As a note, we normally discount the population with lower income bracket from the study. A feasibility report usually includes the following:
· Market Research
o Demographic data relating to the proposed site.
o Area market data
o Competition and their potential impact on your project/location.
· Market Definition and Analysis
o Review/analyze population reports and other pertinent data
o Identify market demands and opportunities
o Prepare projections to assist in defining the market response
o Determine if the target market can support the proposed size/investment.
· Assumptions/Investment Goals
o Review key financing / operational assumptions and develop other pertinent material in order to present realistic forecasts of probable results for investors
o Identify key pricing assumptions/goals for the project
o Review initial assumptions for facility/business response
· Program and response
o Assess demand relationship between activities (bowling, movies, and games) and services such as food and beverage.
o Compare ratios of bowling lanes to population.
o Evaluate food and beverage services using prevailing market data.
o If project visitors are used, careful consideration of the role of the project in the community and the characteristics of the project visitors must be undertaken.
o Program activities by venue and allocate square footage required in the project.
· Operational/Operating Proforma
o Generate operating Proforma (best/worst/likely scenarios)
o Application of relevant industry standards and our hands-on project experience to assist in financial forecasting
o Provide a ROI estimate
o Identify those factors that can make the investment viable.
Feasibility studies have three stages- preliminary, draft and final. The service levels and fee ranges depend upon the product you need. We perform a “rough take” at the preliminary stage and submit the initial results to you. Should you determine to proceed, we complete the study. Should you determine the project is not feasible at that point, you exposure is limited to the fees/costs to that point.
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