The Impact of Feasibility Studies in Starting Up a New Business
This project report studied the Impact of Feasibility Studies in Starting a New Business, A Case Study of Selected Firms in Enugu State. The study examined the content of a feasibility study, the relationship between a feasibility study and a new business, ascertained the relationship between feasibility study and business performance among business firms in Enugu State, and identified people’s attitudes towards carrying out feasibility studies before starting a new business. In studying the above objectives, the researcher adopted the historical and survey research method, which helped them evaluate existing practices as well as suggests a way of overcoming flaws observed in the prevailing norms. To do this, the researchers used a sample of the total population; hence, out of a total population of 1538, only the sample of 193 respondents was studied using non-probability sampling. The method of data collection used by the researchers is the questionnaire method. In the process of the study, the researchers made the following findings; the level of awareness of the respondents regarding the use of feasibility studies in the course of starting up a new business is very low, and this has affected their understanding of its importance and its use. And that the respondents are ready to use it if they know it is vital in starting a new business. Nonetheless, the researchers recommended a massive awareness campaign to the masses to create the requisite awareness of the uses of feasibility studies and the need to embark on it before starting up a new business. Finally, the researchers recommended further research, especially “The Importance of feasibility studies in Setting up a New Business or Project.
This chapter focuses on what forms the background of the study, the statement of the problem, the purpose of the study, its significance, research questions, the scope and limitations of the study, and the definition of terms.
1.1 Background of the Study
For over a decade now, the Nigerian economy has been in dire economic doldrums either due to a global economic meltdown or other unknown reasons.
The continued economic crunch has highlighted the need for feasibility studies before any project. Nevertheless, within the above date range, many new businesses that were set up crumbled and withered away for many reasons, including a lack of proper and a solid foundation. When a business like a building lacks a solid foundation, it is bound to crash, if not immediately, at its inception very soon. This situation, therefore, calls for a very good business plan before one sets up a new business.
The researchers believe potential business owners must undergo a proper feasibility study to make a very good business plan. A feasibility study involves examining the costs and potential benefits of a project or a business to ascertain whether it is feasible, viable, and profitable to undertake such a venture. If this proper study is done, it will reduce the unnecessary risks and wastages incurred by inexperienced businesses. The feasibility studies, when undertaken, will show whether a proposed business opportunity will succeed or fail after careful consideration of alternatives against the firm’s objectives has been made. This will help the owner to minimize unnecessary wastage of time, resources, and energy in embarking on such a venture instead of channeling them to any other venture that will be more profitable.
1.2 Statement of the Problem
The rate at which business fails in Enugu State is becoming very alarming. This is mostly because it concerns small-scale businesses. Yet people still set up businesses only to watch them wither away without any profit. This continuous trend in businesses needs to be questioned; were feasibility studies prepared before starting the business? Were the feasibility studies and their provisions well implemented? Most businesses have failed due to their promoters’ lack of proper planning foresight. According to Louck (1989:5), “to start a business is very easy, but to stay in business is very difficult. Everyone who goes into business wants the business to stand, grow and succeed, but often, it does not work exactly like that. What is to be done for one to sustain his/her business? Is there anything that can be done for a business to be sustained? Can feasibility studies and reports make or help businesses to stand and thrive? It is based on the above questions and more that the researchers undergo this research work entitled” The impact of feasibility studies in starting up a new business” (a case study of selected firms in Enugu State) to find answers to the questions.
1.3 Purpose/Objectives of the Study
This study aims to examine and x-ray the usefulness of feasibility studies when starting up a new business.
The specific objectives of this study include:-
(i) To identify the causes of business failure among businesses.
(ii) To identify the extent of feasibility studies as a tool for investment or business opportunity selection among business firms.
(iii) Identity the content of a feasibility study.
(iv) To ascertain the relationship between feasibility studies and business performance among business firms in Enugu State.
(v) To relate feasibility studies with setting up a new business.
1.4 Significance of the Study
This research will highlight feasibility studies’ relevance to a new business. The work will immensely benefit those who want to go into or establish a new business, especially entrepreneurs and private individuals (the young graduates of higher institutions) who may wish to establish businesses of their own to become self-reliant or self-employed.
Nonetheless, the work will help to minimize business failure among businessmen and women, an incidence that had led many to frustration and depression, which has over time now succeeded in letting many into crime and other social vices such as prostitution, armed robbery, drug addiction, and trafficking to mention but a few.
Apart from contributing to the existing literature on this topic, it will be of immense use to anyone who may like to undertake further studies on this topic or any other related issue or topic.
Finally, the researchers also hope that the adoption and implementation of the findings and recommendations of this study will no doubt help significantly in boosting our economy through business success engendered by the use of feasibility studies among business firms.
1.5 Research Questions
The research questions in this study include the following:
(i) Are people aware of using feasibility studies in business analysis?
(ii) Do people know that using feasibility studies is necessary for the successful operation of the business?
(iii) Do people know that using feasibility studies can minimize the risk of sustaining losses in business?
(iv) Is there any relationship between feasibility studies and business performance among firms?
(v) What is people’s attitude towards conducting a feasibility study before starting a new business?
(vi) What is the relationship between moribund firms and feasibility studies?
1.6 Scope/Delimitation of the Study
The study centers on the impact of feasibility studies in starting up a new business. The relationship between feasibility studies and a new business is paramount to the researchers. For many reasons, the researchers limited the scope of the study to some selected firms in Enugu State.
1.7 Limitations of the Study
The study does not go beyond the relationship between feasibility studies and a new business, and due to time constraints and lack of funds, it did not go beyond the confide of Enugu State.
Nevertheless, even though some other prospective project owners and investors may find it useful, it is mainly conducted with a special focus on business firms in Enugu State.
1.8 Definition of Terms
For easy understanding and appreciation of this work, the researchers considered it pertinent to define the following terms as they are bound to be used consistently. Such terms include:
(i) Feasibility Study: This is a closer examination of a project or business’s costs and potential benefits to ascertain whether it’s feasible, viable, and profitable to undertake such a venture.
(ii) Work/Study: This refers to the material that contains everything about this work/research.
(iii) Feasibility Report: A written documented plan or blueprint of operation of a business/project.
(iv) Business: This is an establishment where goods are produced, bought, and sold (an organization undertaking these activities).
(v) A New Business: This is a newly established outfit where goods and services are produced, bought, or sold in exchange for money.
(vi) Feasibility or Feasible: Something that is possible or likely to be achieved.
(vii) Viable: Something that can be successful.
(viii) Profitable: Ability to give somebody an advantage, money, or useful result.
Copyright © 2023 Author(s) retain the copyright of this article.
This article is published under the terms of the Creative Commons Attribution License 4.0
If you like this article, see others like it:
- The Impact of Feasibility Studies in Starting Up a New Business
- Funding Language Education for Sustainable National Development in the 21st Century
- Application of Time Management Strategies to the Administration of Public Senior Secondary Schools
- The Effect of Marital Problems on the Education of Children in Nigeria
- Causes of Immorality Among Students