1.1 Introduction
A feasibility study is a means for investigating a business possible outcome, but most entrepreneurs are unaware of this before starting a business. A feasible business venture is one that will meet the founders’ objectives and aspirations, generate sufficient cash flow and profits, and be able to withstand the risks it will face while remaining viable over the long term.
According to Hofstrand (2009), the venture can be a start-up, an acquisition of an already-existing business, an expansion of its current operations, or a new venture for an already-existing business (Hofstrand, 2009). As such, the feasibility study is not the only step in the process of assessing and refining a business idea. Additionally, positive organizational performances result when this business idea assessment and development are in line with the organization’s goals and objectives.
As a prelude to other parts of this study, this chapter will discuss the background upon which this study was initiated, the statement of problems that led to this study, the Aim and Objectives of the study. Others are Significance of the study, Scope of work, Research hypothesis and questions, Limitation of the study and Definition of terms.
1.2 Background of Study
The Nigerian economy has been in severe economic straits for more than a decade, either as a result of the global financial crisis or for other, as of yet unknown, reasons. The necessity of conducting feasibility studies prior to starting any project has been brought to light by the ongoing economic downturn. However, a lot of newly established businesses within the aforementioned time frame failed and withered away for a variety of reasons, one of which was a lack of a suitable and strong foundation.
The failure of many business organizations and projects in Nigeria today can be attributed, not to assumptions based on false information, but rather to the promoters’ inability to critically address the issue of uncertainties and the organization’s inability to conduct a thorough analysis of its performance in relation to goals and objectives. Regardless of the size of the business, uncertainty is a daily phenomenon that all businesses must deal with in order to attract and retain customers, encourage them to spend, and ultimately turn a profit.
Researchers believe a potential business owner should do a proper feasibility study before creating a very good business plan. A feasibility study looks more closely at a project’s or business’s costs and potential benefits to determine whether it is feasible, profitable, and viable to move forward with the venture. If a thorough investigation is conducted, it will lessen the needless risks and waste that inexperienced companies incur. Once options have been carefully weighed against the firm’s goals, feasibility studies can be conducted to determine whether a proposed business opportunity will succeed or fail. This will enable the business owner to focus their time, money, and energy on other projects that will yield greater profits rather than wasting them on this one. Positive organizational performances result when this business idea assessment and development align with the organization’s goals and objectives.
A business venture that meets the founders’ objectives and aspirations, generates sufficient cash flow and profits, and can withstand potential risks is considered feasible. It also has the potential to remain viable over the long term. The venture may involve the launch of a new company, the acquisition of an already-existing company, the expansion of current operations, or the creation of a new venture for an already-existing company (Hofstrand, 2009). Thus, evaluating a business idea and developing a business plan involve more steps than just conducting a feasibility study.
Therefore, in Nigeria where the research was carried out, the activities that was conducted is to know the Impact of Effective Feasibility Study on Achievement of Organizational Productivity.
1.3 Statement of Problems
Investigation revealed that the rate at which business fails in Rivers State is becoming very alarming. This is mostly as it concerns small scale businesses. Yet people still set up businesses only to watch them wither away without any profit.
Numerous studies have shown that failing to conduct an adequate feasibility study before starting a business leads to the failure of many firms. The feasibility study resembles a multi-branch tree. It has multiple facets, including market, managerial, and economic aspects, among others. With time, these elements are evolving.
Businesses are prevented from realizing their full potential by organizations’ incapacity to evaluate every facet and anticipate probable future changes. One of the biggest obstacles preventing businesses from reaching their goals is the dynamic nature of the business environment. Because it is constantly changing, strategic planners frequently forget to update their plans to account for these changes.
1.4 Aim and Objectives of Study
The aim of the study is to examine the Impact of Effective Feasibility Study on Achievement of Organizational Productivity using Shopping Mall, Port-Harcourt, Rivers State as a case study. In achieving this aim, the following specific objectives were laid out as follows:
- To identify the extent of the use of feasibility studies as a tool for investment or business opportunities choice among business firms;
- To identify the causes of business failure among businesses;
- To relate feasibility studies with setting up a new business.
- To identity the content of feasibility study; and
- To ascertain the relationship between feasibility studies and business performance among business firms in Rivers State.
1.5 Research Questions
The study came up with research questions so as to be able to ascertain the above stated objectives. The specific research questions for the study are stated below as follows:
- Are people aware of the use of feasibility studies in business analysis?
- Do people know that the use of feasibility studies is necessary for successful operation of business?
- Do people know that the use of feasibility studies can minimize the risk of sustaining lose in business?
- Is there any relationship between feasibility studies and business performance among firms?
- What is the relationship between moribund firms and feasibility studies?
- What is the attitude of people towards carrying out a feasibility study before starting up a new business?
1.6 Research Hypothesis
In order to pursue the objective of this study, the following generalized statements have been designed to guide and aids in obtaining the result for the experiment to be conducted. For this work, the null hypothesis will be represented with H0 while the alternative hypothesis will be represented with hypothesis H1.
Hypothesis One
- H0: People with poor educational background are not aware about the utilization of feasibility studies in business analysis
- H1: People with poor educational background are aware about the utilization of feasibility studies in business analysis
Hypothesis Two
- H0: There is no significant relationship between feasibility studies and business performance among firms
- H1: There is significant relationship between feasibility studies and business performance among firms
Hypothesis Three
- H0: There is no significant factor influencing the attitude of people towards carrying out a feasibility study before starting up a new business
- H1: There is significant factor influencing the attitude of people towards carrying out a feasibility study before starting up a new business
1.7 Significance of Study
The importance of feasibility studies for start-up businesses will be emphasized by this study. Anyone looking to start or expand a business will find great value in the work, particularly entrepreneurs and private individuals (fresh college graduates) who want to start their own businesses to become independent or self-employed.
Nevertheless, the work will contribute to reducing business failure among men and women in the business sector. This has resulted in a great deal of frustration and depression among these individuals, which has over time led to a rise in crime and other social vices like drug addiction, prostitution, armed robbery, and trafficking, to name a few.
Furthermore, it will be extremely helpful to anyone who would like to conduct additional research on this topic or any other related issue or topic, in addition to adding to the body of knowledge already available on the subject.
Lastly, the researchers hope that by using feasibility studies to help business firms succeed, the adoption and application of the study’s findings and recommendations will undoubtedly contribute significantly to the growth of our economy.
1.8 Scope of Study
The scope of the research is focused on the Impact of Effective Feasibility Study on Achievement of Organizational Productivity using Shopping Mall, Port-Harcourt, Rivers State as a case study.
1.9 Limitations of the Study
During the course of this study, there were some problems encountered which stood as limitations to the research work. Some of the limitations include:
- Time Constraint: The time frame given to accomplish this project was very short due to school academic calendar and it was carried out under pressure which made the researcher not to implement some necessary features.
- Research Material: availability of research material is a major setback to the scope of the study.
- Financial Constraint: Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet, questionnaire and interview).
- Initial Cooperation Delay from Respondents: A particular limitation of this work came as a result of the respondent refusal to offer their cooperation at the initial time they were contacted. This contributed in making the success of this research study difficult.
1.10 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 in the work. Such terms includes:
Feasibility Study:
This is a closer examination of the costs and potential benefits of a project or business to ascertain whether it’s feasible, viable and profitable to undertake such a venture.
Work/Study:
This refers to the material that contains everything about this work/research.
Feasibility Report:
It is a written documented plan or blueprint of operation of a business/project.
Business:
This is an establishment where goods are produced, bought and sell (an organization that undertake these activities).
A New Business:
This is a newly established outfit where goods and services are either produced bought or sold in exchange for money.
Feasibility or Feasible:
It is something that is possible and or likely to be achieved.
Viable:
It is something that can be successful.
Profitable:
It is the ability to give somebody advantage, money or useful result.
Economic Aspects:
This is concerned with the organization of the money in the industry and trade of a country, region or society.
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