Feasibility Study for a Business Startup

Feasibility Study for a Business Startup Greentick

For any startup business, the feasibility study can be essential, as the generation of ideas is not just enough to start a venture. The business idea can always be better if it goes under a careful examination of the entrepreneurial opportunities. Any business idea should stand the scrutiny from techno-economic, financial, and legal perspectives. In simple terms ‘Feasibility Study’ is a process to identify whether the business idea will work or not. In addition, entrepreneurs can identify if there exists a sizeable market for the proposed product/service. Therefore, it is effective to realize the investment requirements and generate the funds. Additionally, it assists to develop technical know-how to convert the idea into a product/service. Furthermore, the feasibility study can involve the examination of the operation. financial, HR, and marketing aspects of the startup business.


Similarly, the feasibility study focuses on various aspects of business sustainability. This familiarizes entrepreneurs with product/service feasibility, financial feasibility, market feasibility, location feasibility, manpower feasibility, etc. Some of the essential dimensions under the feasibility study are the following:


Market Analysis

The market analysis facilitates to estimate of the demand and market share of the proposed product/service in the future. This increases knowledge on consumption patterns, availability of substitute goods/services, competition, and so on. For the market analysis, the startup businesses collect a wide variety of information from the market which allows broader estimations. Entrepreneurs also carefully segment the market according to criteria like geographic scope, the demographic, and psychological profile of the potential customers. It is important to understand consumer preference, potential demands, the strategy of competitors, and the practices of distributors/retailers. For this purpose, startup businesses can discuss with consumers, retailers, distributors, or suppliers.


Technical/Operational Analysis

The technical or operational analysis is conducted to assess the operational capability of the startup business. This dimension under the feasibility analysis includes identification, qualification, and evaluation of projects inputs such as materials and machinery items. Entrepreneurs can ensure the right kind and quality of inputs available at the right time and cost throughout the project life. Likewise, this analysis includes product specifications in terms of physical features, functional features, and can compile with standards such as BIS, ISI, and ISO, etc.


Financial Analysis

A proper financial analysis can be effective for startup businesses to assess if the future project is financially viable or not. It can also allow the investors to evaluate the returns that will provide them from their investment. Financial analysis plays an important role as it can facilitate identifying the cost associated with the land, building, plant & machinery. It can even provide preliminary cost estimations that can ease while conducting a market survey, preparing feasibility reports, calculating expenses, registering, incorporating machines, raising capital, and other miscellaneous expenses. Apart from that, the financial analysis includes balance sheet projections, income projections, cash flow projections, break-even analysis, and cost-benefit analysis.


Legal and Administrative Analysis

The legal and administrative analysis assists startup businesses to identify all the administrative and legal issues involved in the project. This analysis includes the selection of forms of companies, registration, and clearances, and approvals from various authorities.


Feasibility Study for Business Startup in Context of Nepal

In the Nepalese context, it is always better to have a feasibility study for startup businesses. In Nepal, entrepreneurs require presenting details of their project plans to banks for business loans. Furthermore, entrepreneurs require details of plans to attract suitable investors. These details of plans are a result of a feasibility study and analysis carried out prior to investment in the business. It is also a guiding roadmap for the purposeful and consistent progress of the enterprise. The government of Nepal as of July 2021 assists businesses with an appropriate feasibility analysis by providing a sum loan of up to NRs. 25 lakhs.



By conducting a proper feasibility study, startup businesses can easily complete a business startup project. Instead of jumping directly into setting a new business project and hoping for the best, a feasibility study can allow project managers or entrepreneurs to examine the possible negative and positive outcomes of the startup business. It can even facilitate investors to figure out how all the legal, economic, technological, social, and other factors fit together, before investing too much time and money. Hence, the overall purpose of a feasibility study is to identify any issues that could prevent startup businesses from being successful in the marketplace.