Financial Feasibility
How could this business financially perform on an ongoing basis?
A financial feasibility study seeks to answer the question “how could this business financially perform on an ongoing basis”. The first part of a financial feasibility study is a market assessment – a thorough review and analysis of a specific geographic market for a given concept. In the case of a financial feasibility study, many details for the development should be known to be as accurate as possible. Useful are first ideas around content, concept, size, layout, operating hours, length of stay, and target markets. Following the market assessment, some of this may be tweaked and the our reports will outline to you how we think you might fine-tune the given concept or any areas of risk we may see that can be addressed in its development. Our market assessments will give you an idea as to the level of attendance we find can be reasonable expected for the development. To do this, we also look at reasonable levels of pricing and per capita spending at the venue.
The second half of a financial feasibility study builds a hypothetical Profit & Loss account for the development. Usually this includes a look at the first five years of operation, although this varies depending on the client’s requirements.
If the client requires it, the third part of a financial feasibility study can assess cash flows and warranted investment levels for the development, which may help steer the further development of the concept and design, and be the first step towards understanding lending requirements.
Project examples:
Bungalow Park, Dinant – Belgium: Confidential Client
On behalf of the owner, the possibility of re-developing an existing downmarket bungalow park veering towards closure, to an upmarket product was assessed. The market clearly showed a lack of demand for a higher priced product, but by investigating various funding options, including access to various grants, the development costs for the developer could be brought down making the project feasible and sustainable in the long term.
Leisure & Entertainment Strategy, London – UK: Knight Dragon
Margreet led the team commissioned to develop a strategy around the incorporation of a visitor attraction, a film studio and a casino in a large mixed use urban development in central London. The advice set out a strategy around the visitor attraction, it’s market positioning and target markets, and likely financial outcomes, based on a discussion around the client’s exit strategy. We also advised on the positioning of the Film Studio and projected financial results, and the demand there may be for a casino development in the same urban development.
As a second phase, the incorporation of hotel accommodation products was evaluated, and advice was provided regarding the type of accommodation best suited to the larger development, the sizing of these, the amenities required, the market positioning and possible branding, with a view to the client’s exit strategy. Particular attention was given to the opportunity of developing multiple hotel developments that could share back of house facilities to create greater efficiencies of scale.
Review of Business Plan FEC, Doha – Qatar: Majid Al Futaim
We conducted a review of the business plan for a Family Entertainment Centre in Doha. The review included a critique of the methodology and benchmarks used within the business plan. Specific areas that were addressed were the market sizing, penetration rates, visitor attendance, pricing levels and operational costs.
Strategic Tourism Master Planning, Kingdom of Saudi Arabia:
Margreet worked for Ernst & Young from 1998 until 2003. During this time her responsibilities included advising the Saudi Arabian government on organisational structure and framework for tourism organisations to be established in Saudi Arabia on national, regional and local levels in both public and private sectors; project and financial management for a project to develop tourism strategy for the Kingdom of Saudi Arabia, including a 20-year tourism master plan and a 5-year action plan (both in London and Riyadh).