The team at Wert-Berater, Inc. provided a USDA (United States Department of Agriculture) Compliant Feasibility Study as of September 2024 in accordance with RD Instruction 4279 B Appendix E for the Cement Manufacturing Plant at 9377 County Road 128, Floresville, Texas 78114 in Wilson County.
The lender requested a complete feasibility study based on the business plan provided by the client. The USDA Compliant Feasibility Study was completed in about 3 weeks from engagement.
Due to confidentiality agreements details concerning the project are not available for public. The contents of the feasibility study were developed in accordance with the following statement of work:
USDA Feasibility Study Requirements
RD Instruction 4279 B Appendix EUSDA Guide for Completion of Feasibility Studies
Executive Summary
Economic Feasibility
Market Feasibility
Technical Feasibility
Financial Feasibility
Management Feasibility
Depending on the program, other sections may be required
Executive Summary
Introduction/Project Overview (Brief general overview of project location, size, etc.); Economic feasibility determination/opinion; Technical feasibility determination/opinion; Market feasibility determination/opinion; Financial feasibility determination/opinion; Management feasibility determination/opinion; Recommendations for implementation, including an overall conclusion as to the business’ chance of success.
Economic Feasibility
Information regarding project site; Availability of trained or trainable labor; Availability of infrastructure, including utilities, and rail, air and road service to the site. This includes an economic overview nationally, state level, and county level. Also included is a demographic overview and traffic counts and other pertaining items related to the business type.
Market Feasibility
This is a critical part of an USDA Feasibility Study. USDA Grant and Loan underwriters use this section to determine your market share, and how well your enterprise can be accepted into the market. Generally, they ask we follow the appropriate USDA guide for this section as follows:
Information on the sales organization and management; Nature and extent of market and market area; Marketing plans for sale of projected output - principal products and byproducts; Extent of competition including other similar facilities in the market area; Commitments from customers or brokers - principal products and byproducts. Adequacy of raw materials and supplies. Projected total supply from members and non-members. Projected competitive demand for raw materials. Procurement plan and projected procurement costs. Form of commitment of raw materials (marketing agreements, etc.).
Each project is different, thereby we modify this section to accommodate a complete analysis of the market and competitors. Items included in the competitive analysis include information from Dun & Bradstreet, Moody's Analytics and ArcGIS Business Analyst to estimate the market area capacity for your venture.
Technical Feasibility
Again, we as asked to use the USDA Guide RD Instruction 4279-B or the appropriate USDA Feasibility Study Guide for this section as follows:
Suitability of the selected site for the intended use including an environmental impact analysis. Report must be based upon verifiable data and contain sufficient information and analysis so that a determination may be made on the technical feasibility of achieving the levels of income or production that are projected in the financial statements. Report must also identify any constraints or limitations in these financial projections and any other facility or design-related factors which might affect the success of the enterprise.
Report must also identify and estimate project operation and development costs and specify the level of accuracy of these estimates and the assumptions on which these estimates have been based. Project engineer or architect may be considered an independent party provided neither the principals of the firm nor any individual of the firm who participates in the technical feasibility report has a financial interest in the project and provided further that no other individual or firm with the expertise necessary to make such a determination is reasonably available to perform the function. Commercial Replication. Risks Related: Construction, Production Regulation and Governmental Action.
Financial Feasibility
In this part of the USDA Feasibility Study, all assumptions related to the development of the pro forma statement are identified and explained. These items are market driven. We located financial statements through various sources that are used by USDA Loan underwriters whereas industry financial ratios are provided.
If your business is an expansion of your existing business, we gather your balance sheet and financial statements as historical support for future plans as well.
Based on information gathered in the process of the Economic, Market and Technical Feasibility sections of the study, we can then identify and use market indications to develop the pro forma statement such as prices, rents, vacancies, usage rates, etc. Operating cost are also compared with your historical figures, or market indications from sources that evaluate hundreds of actual financial statements.
Then a 10-year pro forma statement is developed. In the USDA Feasibility Study, a monthly pro forma is presented based on seasonality, if any for your business. The EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) is then evaluated by way of financial analysis including:
USDA Feasibility Study Financial Analysis:
Pro forma (10 years)
Discounted Cash Flow Analysis (DCF)
Structure of the Assets and Liabilities
Net Assets (Net Worth)
Financial Sustainability Analysis
Key ratios of the company's financial sustainability
Working capital analysis
Liquidity Analysis Financial Performance
Overview of the Financial Results
Profitability Ratios
Analysis of the Business Activity (Turnover Ratios)
Labor productivity
Key Ratios Summary
Rating of the Financial Position and Financial Performance
Bankruptcy Test
Calculation of the Final Rating of the Financial Condition
Management Feasibility
This section includes a discussion concerning the adequacy of management (experience, training, and education of management). Discuss continuity of management (is there a continuity of management plan and is there depth of management?). Evidence that continuity and adequacy of management has been evaluated and documented as being satisfactory. Discuss motivation and character of management. Risks Related to: Applicant as a company (i.e. development-stage) Conflicts of interest or appearances thereof.
Publisher Details: Truck Stop Feasibility Study: SBA Feasibility Study Consultants: USDA Feasibility Study Consultants: Wert-Berater, Inc.
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Donald Safranek
1.888.661.4449 ext. 7
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