What the idea owners or investors should know before starting the construction or development of their factory.

Usually, an industrial project starts from an idea plus financial support. The drivers of this idea can be increase in profit, power, credit or development of market share, increase in quality, increase in customer satisfaction or other reasons like that. The most dangerous action at this stage is to turn your idea into a project without going through logical steps and in the words of Mr. Daniel Kahneman, only based on quick thinking.

The most routine action to approach a correct and valuable decision is to prepare a feasibility study (FS) plan. In preparing the FS plan, we have three main phases, technical studies, market studies and economic studies. But the important point is in the order of doing this study

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In other words; First, you have to see what is going on the real market, then go to the technical issues and finally the economic issues. The mistake that many investors and idea owners make is that they either don’t do market research first, or if they do, it’s not done correctly.

Suppose we want to produce a certain type of brick using the waste materials of the coal processing plant. We may know all the equipment and its prices and the costs of building and setting up the factory, and according to economic studies, we have come to the conclusion that the Return of Investment (ROI) of this project is also a good figure, for example, 3 years. The main thing that we have to deal with at the beginning is what we will end up with, selling the product! Yes, after all, all this design and supply and construction of the factory is for the sale of the product that has been produced. If we cannot sell the product, why did we spend so much?

The correct market research that we do at the beginning of the work tells us before starting the work whether it is possible to sell this product and if so, at what price?

In the next post, more information about market studies will be provided.