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FEASIBILITY STUDY AS A TOOL FOR ENTREPRENEURIAL SUCCESS (A CASE STUDY OF SELECTED PRIVATE SECTOR ORGANIZATION IN IMO STATE OWERRI)
Business feasibility study is a systematic study of ascertaining the feasibility of a business one is intending to venture into. The ultimate outcome of any feasibility study is a go/no go decision you either move forward or you don’t based on objective assessment of the situation. A feasibility study represent the first time in a project development process that the pieces are out together to create a technically and economically feasibility concept. This feasibility study serves as an analytical tool to present the basic assumptions of a project, idea, shows how result vary when assumption change and provide guidance as to critical element of a products.
1.1 BACKGROUND OF THE STUDY
Feasibility study as a tool for entrepreneurial success have been widely studies and discussed various scholars in the world over. Matson (2002) states that feasibility study as a tool for entrepreneurial success is but one part, although an integral one in the development process of a business project. Whether this project is the creation of a new one or the expansion of an existing one into a new venture, the project cycle is similar. Matson reaffirmed that feasibility project planning process shows how a successful business will operate under an explicitly stated set of assumptions. These assumptions include:
a. The technology used (the facilities, types of equipment, manufacturing process etc) and
b. The financial aspect of the project (capital need, volume, cost of goods, wages, etc).
According to Rose (2001) stated that it takes time to succeed because success is merely the natural reward of taking time to do anything well. Rose reaffirmed that feasibility study helps us determine where we are and also how we will know when we have arrived.
Okereke (2003) believes that every rational decision to make a new investment is preceded by an investigation of the economic feasibility of the project, whether or not this is carried out in a formal manner the larger the project, the greater the investment. The more formalized will be the investigation. Okereke reaffirmed that the investor would want to assure himself that the market exists or can be developed, that the local service vital to the project can be assured, that the overall costs for plant equipment, labour and raw materials inputs will be of a certain order. Most importantly he will seek assurance that income will exceed cost by a merging sufficient to reinforce the inclination to undertake the project.
Business development sources in Maine (2002) state that feasibility study as a determinant of entrepreneurial success has three objectives to be met in order for the study to be of value;
i. To learn more about your prospective clients needs.
ii. To clearly define the product or services that you wish to offer these clients (in other word find a need and fill it).
iii. Determine how much revenue this product or service will generate feasibility study is indeed a tool for business success, a useful tool and valid for many kinds of project.
Evaluation of a new venture, both from ones to establish business in the most common application. Feasibility studies can help groups/firms determine whether to expand existing services, build or remodel facilities change method of operation and new product, or even merge with another business. A feasibility study can assist decision makers whenever they need to decide among alternative development opportunities.
This analytical tool operate under an explicitly stated assumptions, of the technology used (the facilities, types of equipment, manufacturing process etc) and the financial aspects of the project capital needs, volume, cost of goods, wages etc. The feasibility study represents the first time in a project development process that the pieces are put together to create a technically and economically feasibility concept. The study also in these basic assumptions, a feasibility study serves as an analytical tool to present the basic assumptions of a project idea, shows how result vary when these assumption change and provides guidance as to critical elements of a product. It provides project specific information to assist in making decisions. Feasibility studies contain standard technical and financial components. The exact appearance of each study varies, depending on the industry studied and critical factors for that project, the method chosen to conduct the feasibility study and study budget. Developing a new business venture is difficult. Taking a project from the imitation of the idea through the operational stage is a complex and time consuming effort. Most ideas do not develop into business operations. If these ideas make it into the operational stage, the majority of them or then fail within the first six months because most entrepreneurs do not carry out feasibility studies of their projects perhaps the most crucial problem one will face after expressing an interest in starting a new business or capitalizing on an apparent opportunity in an already existing business will be determining the feasibility of one’s idea. Some argues that it is expensive to carry out a feasibility study, while others feel that it is not necessary.
1.2 STATEMENT OF THE PROBLEMS
There are many small scale industries in Owerri Metropolis, but many of these industries are not viable. The entrepreneur enters into business so convinced of their merits that they fail to evaluate their potentials thoroughly. These small scale investors do not appreciate the need for a thorough feasibility study prior to set up. This has lead to the collapse of many small scale industries in Owerri M