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10 Essential Feasibility Study Questions for Investors | UAE & KSA Guide – Ghalib Consulting
A feasibility study isn’t just another report—it’s the financial, operational, and strategic blueprint that determines whether your project will soar or stumble. In the competitive and fast-evolving markets of the UAE and Saudi Arabia, a superficial analysis is a direct route to risk. For investors and entrepreneurs, the difference between a profitable venture and a costly misstep often lies in the depth and honesty of this pre-launch assessment.
At Ghalib Consulting, with our deep expertise in financial modeling and feasibility studies for the Gulf region, we’ve identified the ten critical questions that every investor must demand answers to. This checklist is your safeguard, ensuring your capital is deployed into ventures built on data, not just intuition.
1. Is There a Real, Quantifiable Market Demand?
“Build it and they will come” is a dangerous fantasy. The first question your study must answer goes beyond identifying a gap—it must quantify it.
- What to Look For: The study should define your Target Addressable Market (TAM) and Serviceable Obtainable Market (SOM) with clear data. It must analyze market size, growth projections, competitor market share, and customer purchasing behavior. For KSA’s Vision 2030 projects or Dubai’s diversification drives, does your project align with macroeconomic trends?
- Red Flag: Vague statements like “high demand” or “growing market” without supporting data from credible sources like national statistics bureaus, industry reports, or validated surveys.
2. What is the True Financial Viability?
This is the core of the study. It’s not just about total cost; it’s about sustainability and return.
- What to Look For: Detailed financial projections including:
- Start-up Capital Requirements: All initial costs (CAPEX and OPEX).
- Operating Costs: Realistic monthly and annual running expenses.
- Revenue Forecasts: Conservative, base, and optimistic scenarios.
- Key Metrics: Calculation of Net Present Value (NPV), Internal Rate of Return (IRR), and a clear Payback Period.
- Red Flag: An IRR that is unrealistically high or a payback period that seems too short without robust justification.
3. Are the Cost Estimates Comprehensive and Realistic?
Underestimating costs is the most common reason projects fail. Your study must leave no stone unturned.
- What to Look For: A line-item breakdown of all costs: licensing, construction/fit-out, technology, inventory, salaries, utilities (a key cost in the GCC), marketing, and a substantial contingency reserve (typically 10-20%). For UAE & KSA, it must factor in regional specifics like agency sponsorship costs (KSA) or tourism fees (UAE).
- Red Flag: Rounded, lump-sum figures or missing categories like pre-operating marketing or regulatory compliance fees.
4. What is the Competitive Edge and Strategy?
Entering a market like Dubai or Riyadh without a defensible position is commercial suicide. The study must dissect the competitive landscape.
- What to Look For: A SWOT analysis (Strengths, Weaknesses, Opportunities, Threats) and a clear articulation of your Unique Value Proposition (UVP). How will you compete? On price, quality, innovation, or customer experience? It should outline a clear market entry and growth strategy.
- Red Flag: The claim of “no competition,” which almost always indicates poor market research.
5. Is the Proposed Location and Setup Optimal?
For retail, hospitality, or logistics, location is everything. For tech, it might be talent access. The study must justify the “where” and “how.”
- What to Look For: Analysis of footfall, accessibility, proximity to suppliers/customers, and alignment with target demographics. In KSA, does it leverage a economic zone? In the UAE, does it benefit from a freezone’s incentives? It should also cover logistical needs, technology infrastructure, and scalability of the physical/virtual setup.
- Red Flag: A chosen location based solely on low cost without considering customer accessibility or brand alignment.
6. What are the Regulatory and Legal Hurdles?
The GCC has robust and specific regulatory frameworks. Navigating them is non-negotiable.
- What to Look For: A detailed review of all required licenses, permits, and regulations. This includes entity structuring (LLC, Freezone, Branch), 100% ownership rules (especially in KSA sectors), tax obligations (Corporate Tax in UAE, VAT, Zakat), and industry-specific regulations from authorities like the DED, SAGIA, or the Saudi Ministry of Investment.
- Red Flag: A study that treats licensing as a minor footnote.
7. What are the Tangible and Intangible Risks?
A study that doesn’t identify risks is fundamentally flawed. The goal is not to scare, but to prepare.
- What to Look For: A dedicated risk analysis section. This should cover market risks (demand shifts), operational risks (supply chain, staffing), financial risks (interest rate changes, cost overruns), and regional risks (policy changes, economic diversification shifts). Critically, it must propose specific mitigation strategies for each major risk.
- Red Flag: A generic “risks exist” statement with no mitigation plan.
8. Does the Management and Operational Plan Add Up?
A great idea with a weak team will fail. The study must assess the “who” and the “how.”
- What to Look For: An outline of the organizational structure, key management roles, and their required expertise. It should include a recruitment plan and address talent availability in the region. The operational plan should detail daily processes, supply chain management, and key partnerships.
- Red Flag: Unrealistic assumptions about owner involvement or a lack of identified key hires for specialized roles.
9. What is the Execution Timeline?
Time is money, and delays destroy profitability. A credible study provides a realistic road map.
- What to Look For: A phase-wise project timeline or Gantt chart. It should map out the pre-launch (planning, approvals, setup), launch, and post-launch phases with realistic timeframes for each milestone, acknowledging potential bureaucratic delays common in initial setup phases.
- Red Flag: An overly optimistic timeline with no buffer for unforeseen delays.
10. What is the Final Go/No-Go Recommendation and Why?
The study must conclude with a definitive, data-backed verdict.
- What to Look For: A clear, unambiguous recommendation. This conclusion should synthesize all the above analyses—financial, market, operational, and risk—into a final assessment. It should state under what conditions the project is viable.
- Red Flag: A wishy-washy conclusion that doesn’t give the investor a clear direction.
Conclusion: Your Feasibility Study as an Investment, Not a Cost
In the ambitious economic landscapes of the UAE and Saudi Arabia, opportunities abound, but so do pitfalls. A rigorous feasibility study that answers these ten questions is not an expense; it is your first and most crucial investment. It transforms uncertainty into a calculated risk and provides the strategic roadmap to guide your venture from concept to profitable reality.
Before you commit your capital, commit to due diligence. Use this checklist to evaluate your next feasibility study. If it falls short, it’s a sign to dig deeper.
Ready to build your venture on a foundation of clarity and confidence?
The experts at Ghalib Consulting specialize in crafting data-driven, comprehensive feasibility studies tailored to the unique dynamics of the UAE and KSA markets. We don’t just write reports; we provide the strategic insight you need to make confident investment decisions.
📞 Contact Us Today for a Feasibility Study That Answers the Hard Questions.
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