Since the dawn of time, humanity has had a constant need for construction and building. In light of the increasing urban renaissance and the urgent need for continuous infrastructure development, all of this has made construction company projects successful.

To begin, we must first do Feasibility study for a contracting company Within the required level and specialization, contracting companies operate in various construction fields, from building works and interior and exterior finishing of buildings, residential apartments, commercial institutions, and malls, and are also active in the field of infrastructure, road paving, and many other countless works.

The contracting field is very profitable and profit margins are high compared to other projects, but working in this field, in particular, requires a well-thought-out decision and it is not advisable to enter the field randomly. Just as the profit margins are high, in case of loss, they will also be high. Therefore, a comprehensive and well-studied feasibility study must be conducted to ensure success and avoid the investment risks of this project.

The most important factors that contribute to the success of a contracting company:

• Preparing a preliminary plan for the field in which the company will operate and an approximate figure for the capital allocated for investment.
• Market study and areas where construction activities are active, and gathering data on competitors.
• Get advice from experienced people in the field, as this helps you closely investigate market conditions.
• Conduct a comprehensive and integrated feasibility study for the project, including all required financial and technical details, based on accurate accounting figures, and this study will be the primary reference for deciding whether to launch the project or not.

Steps to conduct a feasibility study for a construction company:

A feasibility study is a series of specialized and interconnected studies carried out before investing in or starting a project. It covers the project's entire lifecycle, from inception to liquidation, to ensure the project's viability in achieving optimal returns and results.

The importance of conducting a feasibility study for a construction company:

• Evaluation of the scientific and practical evidence for the suitability of a construction company.
• The project owner was presented with the real-world situation through precise figures and details, to help them make the right decision.
• Providing a complete data system for the project through its technical, financial, and marketing study.
• Feasibility studies help in estimating the basic costs of a project, expected returns, and the payback period for invested funds.

A feasibility study for a contracting company includes a set of steps:

1. Determining company size and the projects it can undertake.
2. The company's appropriate business field in the market.
3. Selecting the necessary labor and equipment.
4. Compare the companies in the market and the projects offered for work.

Company size and the projects it can undertake:

A feasibility study places the investor in view of the actual market and its requirements, and also familiarizes them with the appropriate company size according to the financial amount they have available to start investing, and the projects they can tender for or contract to execute upon company establishment.

The company's business area in the market:

Determining the activity based on the investment amount and existing experience, as the contracting field is diverse and includes, in addition to construction and building, other contracting works such as landscaping, plumbing, carpentry, blacksmithing, decoration, air conditioning, maintenance, and operation.

Selection of necessary labor and equipment:

These two determinants are among the most important components of contracting companies, as they are the primary operating elements for contracting companies. When establishing the company, you will need to purchase some information and know other information about the equipment you will rent, as well as the labor that will join you and the work system of employment or by projects. All of these are key determinants that you must know all the details of before entering the market.

Compare companies in the market and projects available for work:

In all projects, you need to identify competitors in the market so that you can launch and compete strongly on both price and quality. Additionally, knowing the projects available in the company's labor market will help you determine many things that will help your project succeed.

Financial Study for a Contracting Company

• Expected investment costs for a contracting company.
• Sources of financing for investment costs and their consequences.
• Determine the capital cost elements required for recovery.

Expected capital expenditures for a construction company:

Determining the projected capital or investment expenditure for a project, which represents the cost of what will be spent and is not recovered within a single financial period, thus including all amounts from the inception of the idea until the commencement of operations for a contracting company.

Sources of funding for investment costs and their consequences:

Project funding typically comes from multiple sources. When a contracting company undertakes a project, self-funding might not be sufficient, or it may be necessary to approach lending institutions or banks for a loan. In such cases, it's important to consider that with self-funding from owners, the opportunity cost of investing these funds is lost, or the benefit of using them in another venture is missed. As for obtaining a loan, there is an associated interest cost to be repaid over the payment period.

Identify the capital cost elements subject to recovery:

All investment costs incurred during the company's setup period must be recovered during the operating years, including real estate, working capital, and equipment. This period is called the payback period.

Marketing study for a contracting company:

The marketing study relies on collecting, recording, and analyzing data related to the contracting company through demand and supply determinants, currently and in the future, for the company under feasibility study and its competing companies. It also involves identifying marketing channels, budget, and marketing strategies to be followed during the company's operational period.

The Importance of Marketing Studies for a Construction Company:

• Determine the expected demand and projects in the market.
• Determine a suitable and competitive market price.
• Identify marketing channels used for promotion and advertising.
• Determine the appropriate budget for launching a construction company in the market.

Feasibility study experts at Feasibility Study Site can help you with a feasibility study for a ready-made contracting company:

You can start by preparing Feasibility study Simple for your project in a self-service manner using the Jadwa-Tech service, and the system will automatically perform the financial analysis.

• As an alternative option, especially since you may face significant difficulties in gathering the aforementioned data, you can contact the technical support team, who will always be ready to answer all your inquiries and will guide you through everything you need to know about your project.

Contact us through this form for our specialized feasibility team to prepare a feasibility study for your project via the following link:

https://bit.ly/2WdZH7M

• Or through our website. Start By preparing your project feasibility study by clicking here.

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