JAAFAR MUHAMMAD BELLO PGS/02/23202624 M. Sc.

COMPUTER SCIENCE

KEBBI STATE UNIVERSITY OF SCIENCE AND TECHNOLOGY ALIERO

DEPARTMENT OF GENERAL STUDIES

SCI-801 ENTREPRENEURSHIP STUDIES

ASSIGNMENT

By

Jaafar Muhammad Bello

(PGS/02/23202624)
Department of Computer Science

ASSIGNMENT QUESTION

Feasibility study is so important to be carried before engaging into a business,

discuss!

1st July, 2024

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JAAFAR MUHAMMAD BELLO PGS/02/23202624 M. Sc. COMPUTER SCIENCE

TABLE OF CONTENTS

TITLE PAGE .............................................................................................................................................. 1

ASSIGNMENTQUESTION ......................................................................................................................... 1
TABLE OF CONTENTS............................................................................................................................... 2
INTRODUCTION ....................................................................................................................................... 3
THE CONCEPT OF FEASIBILITY STUDY ..................................................................................................... 3
WHAT IS A BUSINESS FEASIBILITY STUDY ............................................................................................... 3
WHY IS IT IMPORTANT TO CARRY OUT FEASIBILITY STUDY BEFORE STARTING A BUSINESS? ............... 4
CONCLUSIONS ......................................................................................................................................... 6
REFERENCES ............................................................................................................................................ 6

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JAAFAR MUHAMMAD BELLO PGS/02/23202624 M. Sc. COMPUTER SCIENCE

INTRODUCTION

The amount of risk in a business or business operation can be reduced particularly by

providing information about the circumstances and facts that influence the likelihood of a
recommended course of action succeeding or failing through conducting a thorough study
and figuring out in advance what has to be done and when. Feasibility study is something that
is done to get a business ready for the future and make sure that choices about how to use
resources to achieve goals are wisely made.

A feasibility study is a tool for examining a project's possible outcomes. Even though
some businesses face unfair competition, lack of technological know-how, poor policy
implementation and inadequate market research slow down industry development
(Chukwukaand Igweh, 2024).

In spite of support from government for businesses especially small and medium-
sized enterprises through numerous programs (e.g NGCARES programme) and
entrepreneurship development, and the accessibility of modern technology, businesses in
remote areas have not been performing creditably well. Thus, the goal of this assignment is to
examine the importance of performing feasibility studies before starting a business.

THE CONCEPT OF FEASIBILITY STUDY

According to (Ndebbio, 2007) as cited by (Chukwuka and Igweh, 2024) Feasibility

analysis involves assessing the surrounding conditions of a business, in order to identify
potential dangers and opportunities, as well as the likelihood of success of the planned
enterprise, in order to persuade potential investors or financiers (Ndebbio, 2007). The
purpose of a feasibility study is to give a general overview of the main problems associated
with a business proposal. Finding any "make or break" problems that might keep a company
from succeeding in the marketplace is the goal (Echetama et al, 2016). Stated differently,
feasibility study also referred to as workability or viability study establishes the viability of a
proposed business idea (Chukwuka and Igweh, 2024).

WHAT IS A BUSINESS FEASIBILITY STUDY?

A business feasibility study can be defined as a controlled process for identifying

problems and opportunities, determining objectives, describing situation, defining successful

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JAAFAR MUHAMMAD BELLO PGS/02/23202624 M. Sc. COMPUTER SCIENCE

outcomes and assessing the range of costs and benefits associated with several alternatives
for solving problems.The business feasibility study is used to support the decision-making
process based on a cost benefit analysis of the actual business or project viability (A.
Thomson, 2005). The feasibility study is conducted during the deliberation phase of the
business development cycle prior to commencement of a formal business plan. It is an
analytical tool that includes recommendations and limitations, which are utilised to assist the
decision-makers when determining if the business concept is viable (Druker 1985, Hoagland
and Williamsom 2000, Thomson 2003c, Thomson 2003a). Before making an investment,
prospective investors, business owners, bankers, suppliers, and others use feasibility studies
to make sure a business idea is sound technically, financially, socially, economically, legally,
and profitably (Chukwuka and Igweh, 2024).

A comprehensive feasibility study contains five key domains: Technical feasibility,

economic feasibility, legal feasibility, operational feasibility and scheduling feasibility. These
are sometimes encapsulated by the abbreviation TELOS.

WHY IS IT IMPORTANT TO CARRY OUT FEASIBILITY STUDY BEFORE STARTINGA

BUSINESS?

The following range of paragraphs states the reason(s) why it is very important to carry out
feasibility study before setting up a business.

Numerous Researches such as (A. Thomson, 2005) and (Chukwuka and Igweh, 2024)
states that only one in fifty business ideas are actually commercially viable. Therefore a
business feasibility study is an effective way to safeguard against wastage of further
investments or resources (Gofton 1997, Bickerdyke et al. 2000). If a project is seen to be
feasible from the results of the study, the next logical step is to proceed with the full business
plan (A. Thomson, 2005).

The research and information uncovered in the feasibility study will support the
business planning stage and reduce the research time. Hence the cost of business plan will
also be reduced (Chukwuka and Igweh, 2024).

A feasibility study provides the stake holder with varying degrees of evidence that a
business concept will in fact be viable (Hoagland and Williamson 2000, Thomson 2003c,
Thomson 2003a, Wickham 2004).

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JAAFAR MUHAMMAD BELLO PGS/02/23202624 M. Sc. COMPUTER SCIENCE

Potential investors such as bankers, suppliers, and others rely heavily on feasibility
studies to make sure that a business idea is solid technically, financially, socially,
economically, legally, and commercially before making an investment (Chukwuka and
Igweh, 2024).

With the help of feasibility study, an entrepreneur may determine whether or not they
are meeting their goals and if not, changes need to be done (Nigeriabusinessinfo.com, Feb,
2004).

Inegbenebor (2006) and Ifechukwu (2006) as cited by (Chukwuka and Igweh, 2024)
view an environmental analysis skill as the capacity to look at the environment from a variety
of angles, including geographical angle, social aspects, government assistance, and
regulations, Examining the target market (consumers), the product's fit for the target market,
the competitive landscape (weaknesses and strengths), the price structure, product delivery
and extension services, and other factors are all examples of market analysis skills. Although
there are additional areas, a well-prepared feasibility study addresses all of the above criteria
(Echetama et al., 2016).

According to a research carried out by (Chukwuka and Igweh, 2024) where

questionnaire is used to collect primary data from Small and Medium scale Business owners
in Asaba of Nigeria, questions concerning the need for feasibility study such as “Does the
feasibility study on the existing competitors prior to commencement of business gives room
for profit?” shows that 35 respondents said absolute yes (AY), 52 respondents said yes (Y), 5
respondents undecided (U), only 19 respondents said NO while 0 respondents said absolutely
no (AN) out of the total 111 expected responses. This proved that feasibility study is so
important before commencing a business (Chukwuka and Igweh, 2024).

In the same vein another question from same questionnaire “Feasibility study on
existing competitors prior to set up helps location of the business for a successful venture”
proved that feasibility study on business location is very crucial before commencing a
business because 46 respondents strongly agreed (SA) 51 respondents agreed (A) 0
respondents undecided (U), 10 respondents do not agree (D) while only 19 respondents
strongly disagree (SD) (Chukwuka and Igweh, 2024).

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JAAFAR MUHAMMAD BELLO PGS/02/23202624 M. Sc. COMPUTER SCIENCE

CONCLUSIONS

Based on the reasons provided in the section above and opinions from owners of
Small and Medium Enterprises (SME) we can see that the role of feasibility studies in the
success of business cannot be overemphasized. Therefore feasibility studies should be done
in a very careful way so that the implementation will yield positive result and lead to the
success of business.

REFERENCES

1. Alan Thomson “Entrepreneurship and business innovations” the art of successful

business start-up and business planning 2005.
2. Bickerdyke I. Lattimore, R. and Madge, A. “Business Failure and Change;” An
Australian Perspective. Canberra, Productivity Commision Research Paper. 2000.
3. Chukwuka Ernest Jebolise, Igweh Florence Konye , “Feasibility Studies And
Entrepreneurial Success Of Small And Medium Scale Businesses In Asaba” Nigerian
Journal of Management Sciences Vol. 25(1) February 2024.
4. Echetama, F. C., Obi, C., & Joel, A.-D. (2016). Effect of feasibility study on the
growth of SMEs in Imo-State: a study of selected SMEs in Owerri Zone”.
International Journal for Research in Business, Management and Accounting, 2(2),
10-19.
5. Gofton L. “Business market reserch” London Kogon page.
6. Hoagland, H. and Williamson, L. “Feasibility study” Kenturkey, university of
kenturkey.
7. Thomson, A. “Business feasibility studies” Dimension of business viability. Perth,
Best Entrepreneur. 2003a.
8. Thomson, A. “Overview of Business plan” Perth, Best Entrepreneur. 2003b.
9. Thomson, A. “understanding the proof of business Concept” Perth, Best Entrepreneur.
2003c.
10. Wickham, P. “Strategic entrepreneurship” Essex, Pearson Education.