Stop 'Nailing Down' your Feasibility Analysis
Development Managers talk often about signing off on a feasibility, or firming up the numbers. Often this becomes a problem as once the feasibility is ‘signed off’ or the numbers are ‘firmed up’ then its put in the bottom drawer and forgotten. They then wonder why an element of the project got away from them financially.
Your Feasibility Analysis must become a “Living Document" from the inception of the project through to completion of construction and handover.
But is your Feasibility Analysis covering everything it needs to cover?
The Feasibility Analysis is the cornerstone of any property development or investment. At Rosel Sherwood we have developed our bespoke software with understanding that the strength of any feasibility analysis lies in two key components –
1. The comprehensiveness and accuracy of the inputs and;
2. Its use as a ‘Living Document’
In the first instance the inputs must be comprehensive. Feasibilities that offer a simple percentage of construction cost to cover large components such as ‘consultants’ or ‘finance’ are high risk and are open to financial manipulation. These may be sufficient for high level assessment to see if a project is worth looking into further, but after that they provide little value and increased risk. Our detailed approach allows for individual cost centres to be analysed in ‘Fee Compartments’ that align with actual consultants scopes of work and are able to be confirmed through competitive market analysis.
The ‘Living Document’ approach is perhaps the most important. Once a detailed feasibility and cash flow has been completed in Due Diligence then often it is forgotten. Our analysis of ‘Fee Compartments’ allows a co-ordinated full project life cycle cost control centre that keeps track of variations, changes in scope, and aligns with project programing changes, to provide real time snapshots if the projects performance at any time.
Download a copy of our internal comprehensive Feasibility Analysis Check-List, by going to our website by clicking the link below.