Why you should begin business with good feasibility

So now you are ready to start that business you’ve been dreaming of. And you feel you have all that is required to make the business succeed.

The money is ready. The passion is there. You have seen other people running the same business and they are doing just fine. You have even read some books on the particular business, and with your self-confidence and positive outlook, nothing can simply go awry. Right? Wrong. Have you done a comprehensive feasibility study of the business before venturing into it?

Though a seemingly insignificant aspect in the whole process, a good feasibility study contributes in no small measure to the success of a business. It is simply one of the strong components at the foundation-laying period.

“The purpose of a good feasibility study is to enable a business take off from an advantageous point,” explained Mr. Abiodun Oladapo, the chairman, LCCI SME Group. “This is achieved by examining the viability, weaknesses and strengths of the business.

A feasibility study can be done on an existing or proposed business. It is just like someone wanting to build a house. If the person truly desires a solid house that can stand the test of time, he/she needs an architect and a builder that will plan and design the house, as well as make necessary suggestions on how to go about constructing the building in such a way that will not only meet the aesthetic need, but also ensure it is well built. So, any business that is worth the effort requires a feasibility study.”

Interestingly, Oladapo said only a small percentage of Nigerians bother about getting a feasibility study before going into business. The majority just relies on gut instincts and the money they have set aside to start the business, while others just look around to see what business is thriving and then go for it.

He said: “Some people don’t even have a clear idea of the kind of business they want to go into. Yes, they are serious about starting a business and want it to succeed, but they don’t usually do their homework well before jumping into it. And this is why some businesses suddenly collapse, shortly after take off.

The mere fact that a friend or neighbour is doing well in his/her business does not mean you will also succeed if you go into it. You don’t know what information or plans that person put in place when starting that business. Things don’t just work that way. A lot goes into establishing a successful business.

“This is where feasibility study comes in, as it relies on existing information concerning the specific business and then use that to project into the future.

Before going into a business, you have to determine your market; you have to consider the materials needed and the labour. What kind of staff do you require to effectively market your business? How do you retain your employees? What kind of training and exposure do they need to perform well and achieve set goals? How do you capture and satisfy your target clients? How prepared are you to tackle and overcome difficulties that are likely to come up along the way? All these issues and more a good feasibility study addresses and offers possible solutions.

“The idea is to establish all the facts about a particular business, so that the person going into it has a good grasp of what it is all about, and is well informed on the available options and how to go about making wise choices. The aim is to help establish a business that has a high chance of succeeding.”

Is the success or otherwise of a business tied directly to a good or bad feasibility study?

Oladapo said this is not strictly so, as there are other factors that can influence the fate of a business. These can come in the form of political, natural, economic, as well as unforeseen circumstances, all of which are capable of dictating the direction a business takes.

“In as much as a feasibility study is essential for a good business, these factors can also have a say. For instance, a government policy that has been favourable to a particular business might be changed overnight. And in a twinkle of an eye, a thriving business starts experiencing a setback, which can ultimately derail it, if care is not taken.

“Another example is a farmer that was looking forward to a bumper harvest based on a good planting season, but then there occurred a heavy downpour that washed away all his crops. This is a natural disaster nobody can do anything about.

“But all this notwithstanding, a good feasibility study takes into account such problems and tries to propose a Plan B that can be easily adopted, when confronted with such circumstances, so that the business can bounce back as soon as possible. A good feasibility study gives a detailed outline of a business, its prospects, challenges and how to go about tackling them, if they occur.”

Just like in other fields, where there are quacks and charlatans, Oladapo explained that it is important that a professional be commissioned to do the feasibility study.

He said: “Because many people don’t bother about feasibility study before starting a business, much is not known about this aspect of business and the professionals that handle it, where they can obtain a good feasibility study and how to go about it generally.

“Being a small aspect of the document required to start or review a business, a feasibility study can also be done by professionals that are into formatting business plan. Anyone that can do a business plan can also undertake a feasibility study. Interested people should just ensure they contact seasoned professionals that can do a good job, when trying to obtain one.

“However, it should be noted that a feasibility study is not only for new businesses. Even existing businesses need to be reviewed periodically and continually to enable them stay afloat.

“For instance, what obtained when a business was started 10 years ago are not likely to be the case currently. So, to be on top of their game and ensure that their businesses flow with whatever dynamics are playing out, business owners need to constantly do a review to reposition their businesses and give them a good chance of surviving.

“This is more so with the harsh economic situation in the world today. A good businessman/woman needs to be abreast of what is happening in the business environment so as to be proactive and strategic. A lot is needed for a business to survive and stay strong now than before.

“So, for existing businesses, continual review is the answer, while new ones can have a solid foundation with the help of a good feasibility study.”