Financial feasibility

This is the final step in feasible analysis. The most important issues to consider at this stage are total
start-up cash needed, financial performance of similar businesses, and the overall financial
attractiveness of the proposed venture. Financial feasibility gives an idea of overall flow of money from
investors to buyers.

When we taking the analysis of Portable Reaper Binder Machine, it seems good for this new venture.

Factors of production:
There are many factors involve in this project for example;

 Labor
 Production plant
 Equipments
 Product management team
 Product Design

Start up cost:
As a new venture and first entry in market, keeping in view market sustainability we are plane to
develop and introduce twenty (20) products in market. So by taking in view the production factors, each
product costs sixty thousand (60,000 rupees).

After production there should be appropriate system of suppliers and maintenance and advertisement
for the stability of new venture so, for this an additional amount of 3 lacks (3, 00,000 rupees) is
reserved. So total start up cost is about to fifteen lacks (15, 00,000 rupees).

Entities cost
Fabrication cost (20 machines) 12,00,000
Advertisement 50,000
Supply system /distributor 1,50,000
Maintenance and others 1,00,000
Total 15,00,000

The seed money that gets a company off the ground comes from the founders’ own pockets. There are
three categories of sources of money in this area: personal funds, friends and family, and bootstrapping.
Personal funds source is chosen which is divided on members contributing in this venture.

Financial Performance of other same business:

Although there is good scope for this venture in Pakistan but unfortunately there is no well settled firm
or organization in this respect. So all the harvesting equipments are imported from other countries like
china and costs very much. So financial performance of this venture will be good enough to satisfy.

Operational cost:
This is also a major issue for a new venture so, a deep analysis is required. Basically Portable Reaper
Binder Machine is being developed for overcome the financial problems of poor farmers so, operation
cost must be low.

So for this reason this product is designed much efficient by compromising on

 Size of machine
 Cutting capacity (how much area harvest in specific time)

To satisfy the customers.

By an estimate, this machine costs of ten thousand rupees per acre which is much less as compared to
other harvesting machine.

Future projected cost:

It includes future cost needed to promote and spread business keeping in view

 Demand and supply

 Costs (Opportunity cost, Variable cost, Fixed cost, Book cost etc)

Future cost also depends upon the economy condition of country, international market revolutions and
present conditions of country. So we have following assumptions which effects future projected cost of
venture.

Assumptions:

1. If the Pakistan’s economy will gain strength over the next two to three years, and that’s an
underlying assumption driving our sales projections, so it affects the projected cost.
2. Natural disasters like flood, earthquake etc also influence future cost.
3. Political instability
4. Change in tax policies, rules and regulations of country.

So all these assumption affects the economical conditions of country and also vary the projected cost of
venture.