small Business Feasibility Study: how to get started

table of Contents:
introduction
what is a feasibility study and why do you need one?
steps to prepare a feasibility study for a small business
practical examples of small business feasibility studies
introduction:
in the world of entrepreneurship, a feasibility study is one of the most important steps to ensure the success and sustainability of a small business. it is not just a piece of paper, but a roadmap that enables you to understand all aspects of the project before starting it, and helps you identify challenges and opportunities. in this article, we will learn how to prepare a comprehensive feasibility study for your small business, from evaluating the idea, through market and cost planning, to risk analysis. through thoughtful steps, we will guide you on how to make sure that your project is not just a dream, but a viable idea,and a fe asibility study is the first and essential step to establishing a successful small business. this study aims to evaluate the project idea from all aspects to ensure profits and avoid risks. in this article, we review how to prepare a feasibility study for a small business in practical and organised steps.

1. what is a feasibility study and why do you need one?
a feasibility study is a comprehensive analysis that aims to assess the feasibility of the project and its economic, technical, and financial feasibility.
why do you need a feasibility study?
determine the feasibility of the idea: it helps you ensure that your idea is feasible and meets the needs of the market.
reduce risks: it shows potential challenges and helps you make plans to avoid them.
attract funding: it is a powerful document to convince investors or banks to fund your project.

2. steps to prepare a feasibility study for a small business
a) Analyse the market
analysing the market is the first step in understanding the environment surrounding your project.
define your target market:
who are the potential customers?
what are their ages, interests, and income levels?
analyse supply and demand:
what is the demand for your product or service?
who are your current competitors and what are their strengths and weaknesses?
study future trends:
is the market growing or stabilising?
what new opportunities can be exploited?
b) technical evaluation
the technical assessment aims to identify the resources required to implement the project.
location and equipment:
where will the project be operated?
what equipment or tools are needed?
human competences:
how many staff will be required?
what skills do they need?
legal procedures:
are there permits or approvals required to operate the project?
c) financial planning
financial planning is one of the most important elements of a small business feasibility study.
cost estimation:
fixed costs: such as rent, equipment, and licences.
variable costs: such as raw materials and employee salaries.
predict the revenue:
what is the expected sales volume?
what are the potential profits?
analyse the break-even point:
when will the project start to cover its costs and make a profit?
d) risk analysis and contingency planning
identify potential risks:
changes in raw material prices.
emergence of new competitors.
challenges in attracting customers.
develop plans to deal with risks:
establish relationships with multiple suppliers to avoid material shortages.
optimising marketing strategies to face the competition.

3. practical examples of feasibility studies for small businesses
a) Small coffee shop project
market analysis: growing demand for coffee in urban areas, with a focus on the youth.
technical evaluation: choosing a location near universities or offices, and purchasing equipment such as coffee machines and chairs.
financial planning: estimate the cost of rent and equipment and project revenue from the sale of coffee and side drinks.
risks and contingency plans: facing the competition by offering promotions and additional services such as free internet.
b) small fashion design business
market analysis: growing demand for customised fashion for events such as weddings and events.
technical evaluation: purchase sewing and design equipment and hire experienced designers.
financial planning: estimating production costs and pricing the costumes to cover costs and achieve a profit margin.
risks and contingency plans: coping with demand fluctuations by diversifying products such as daily wear.
c) online store project for selling accessories
market analysis:
increasing demand for online shopping, especially among youth and women.
high demand for handmade or locally made accessories due to the preference for unique and distinctive products.
technical evaluation:
create an online platform or use ready-made websites such as Shopify or Etsy.
secure suppliers to manufacture or design accessories in-house.
ensure an efficient shipping system to deliver products to customers.
financial planning:
estimate the cost of setting up the online store, purchasing raw materials, and photographing the products with high quality.
predicting revenue by analysing the volume of demand and the right price for each item.
risks and contingency plans:
facing the competition by offering unique products or exclusive designs.
optimise digital marketing to increase awareness of the store through social media.

d) organic Shop Project
market analysis:
increased consumer awareness of the importance of healthy food and organic products.
demand for organic products from health-conscious groups such as athletes or families.
technical evaluation:
choose a location near residential areas or local markets.
collaborate with local suppliers to obtain fresh products such as fruits, vegetables, and organic grains.
provide proper storage equipment to maintain the quality of the products.
financial planning:
estimate initial costs such as rent, shop fitting, and purchasing costs from suppliers.
calculate revenue by analysing the number of expected customers and average spending.
risk and contingency plans:
overcome the rising cost of organic products by offering special offers and savings packages.
ensure continuity of supply by collaborating with multiple suppliers to avoid product interruptions.

in conclusion, a feasibility study is the cornerstone of any small business endeavour. by conducting a thorough feasibility study, you can evaluate all aspects of the project financially, technically, and market-wise, helping you make informed decisions that minimise risk and maximise profits. proper planning is not only about defining the business idea, but also about strategising for challenges that may arise in the future. therefore, always make sure you are fully prepared with clear data and analyses before starting any project.
if you feel that preparing a feasibility study is complicated or you need help, we are here to support you. don’t hesitate to reach out to us via WhatsApp or call us for a free consultation or assistance in preparing a comprehensive feasibility study for your project. our team of experts is always ready to provide solutions that suit your needs and ensure you get off to a strong and successful start.

read more: feasibility Study vs. Business Plan: what’s the difference?