When faced with a business opportunity many persons tend to focus on the positive outcomes.
At Captiva Africa we will work with business executives to take a realistic look at both the positive and negative aspects of the project and ultimately seek to answer the question: does the idea make commercial sense. The objective of a feasibility study is to determine if a business opportunity is possible, practical and viable.
Our recent experiences with SMEs indicate that knowing when and how to conduct feasibility studies will help many owners make critical decisions to select the right opportunities. Our teams of BDAs have assisted businesses carry out feasibility studies before embarking on capital projects or expanding into new areas.
We assist business owners and executives address amongst other things the following critical issues:
- What type of product or service is proposed and what are the commercial implications thereof for sales, marketing, volume, quality and seasonality?
- What are the number, capacity, location and level of technology in competing firms?
- Where applicable what are the prospects for sourcing of the raw materials?
- What are the cost and logistical implications for the production and distribution of the product?
- What are the facility requirements for the project in terms of site and should this be leased, rented or purchased?
- What are the funding requirements for the project and the payback period for the investment?
- What is the optimal legal structure of the project and such contractual agreements as the production contracts, sales contracts and marketing agreements?
At Captiva Africa we encourage clients to carry out feasibility studies even when they feel the project is commercially viable. This is because the study forces the entrepreneur to put the idea on paper and assess whether those are realistic. It forces the owner to begin formally evaluating which steps to take next. Where necessary we collaborate with sector experts to provide objective analysis of the proposed venture.
In one of our recent engagements for a multinational seeking to set up operations in East Africa in the clean energy sector, the Captiva Africa team assisted the client determine amongst other things the regulatory environment for the project, the most ideal sites for the plant, the adequacy of the local sources of raw materials, opportunities and prospective partners for collocation of the plants, the availability of large scale industrial anchor clients and the opportunities and protocols for public private partnerships.
The Captiva BDAs went further to set up and facilitate early stage discussions between the client and various prospective partners, key suppliers, anchor customers and relevant regulatory agencies in the sector.
Captiva Africa has also recently carried out feasibility studies for businesses in water in Kamwenge and Kyenjojo districts in Uganda and businesses in sanitation in Mukono district on the outskirts of Kampala.