The biggest nightmare of any manufacturer is what if their product turns out to be a failure.
Sometimes products get rejected in the market right after the launch. And this does not happen because the product is bad, but because of the weak groundwork. Despite being the most critical and important factor, industrial zoning and utility costs are ignored by the manufacturers. That is why a feasibility study becomes a must if you want security in your business.
Why manufacturing feasibility matters
Many think that manufacturing is just about producing products. But manufacturing also includes the market you are targeting and the price of the product. And that is where the feasibility study comes in. It gives a prior idea of whether your product is legally, financially, and operationally fit for the market or not.
If you ignore feasibility planning, you may face the following obstacles:
- Legal roadblocks
- Unexpected cost overruns
- Delays in production
- Long-term losses
So let’s learn in depth about the two most important pillars of business planning: zoning and utilities.
Understanding industrial zoning
Industrial zoning laws help you analyze a particular area to see if it is fit for your business. because not every area is suitable for building a factory.
Below are some basic questions that your feasibility study must answer:
- Is it legally allowed to manufacture in that zone?
- Are there any sort of strict rules related to noise, pollution, or operational hours?
- Are special environmental or safety clearances needed?
- Is the area suitable for the access of heavy vehicles?
Doing industrial zoning can save you from notices, fines, or forced relocations. And this can save you from expensive mistakes that can sink your whole business. A feasibility study makes sure that your factory location follows all the legal requirements and rules.
Utility costs: the silent profit killer
Never misunderstand utilities as a one-time expense. They are basically recurring costs and have a huge impact on your profit margins.
The following are some major utilities:
- Electricity used for machinery, lighting, and automation.
- Water for cooling, cleaning, and processing.
- Fuel for boilers and other heating systems.
- Proper disposal of industrial waste.
- And these utility costs sound very low, but even a small fluctuation in this can have a huge impact on the annual profit margin.
So a good feasibility study does the following:
- Comparison of utility costs in different locations
- Check reliability and supply consistency
- Discover charges in peak hour and penalties
- Estimate future price increases
If the major expense is going into utility costs, then there is no point in low land cost.
Zoning and utility work together.
Zoning and utilities do not work in isolation; they are very much interconnected.
Let’s understand by following these instances:
- An industrial zone that is legally approved would obviously have better infrastructure.
- Industrial parks often provide you with subsidized power.
- Poorly maintained zones come with expensive private arrangements.
- So, feasibility studies focus on a broader perspective, and they try to look at things together rather than in isolation.
Why a feasibility study is nonnegotiable
A feasibility study gives you the real picture before you invest.
It helps you in:
- Avoiding illegal locations
- Estimating all the expenses with accuracy
- Reduce risk and hesitation in investment
- Plan consistent growth
It helps you to make better decisions that help your business to survive in the long run.
Conclusion
The success of any business does not just depend on the product. It also depends on the area you are operating from and the utility cost. And the problem arises when you overlook these factors.
Hence, a detailed feasibility study service can save you and your business from sinking. And it is a must for the survival of your business. So before you build a factory, build feasibility!
