EFFECT OF FEASIBILITY STUDIES ON THE ENTREPRENEURIAL SUCCESS OF SMALL AND MEDIUM ENTERPRISE (SMEs)

ABSTRACT

This study examines the effect of a feasibility study on the entrepreneurial success of small and medium enterprises in Benin City, Edo State. Specifically, the study sought to: investigate to what extent the SMEs identify and consider their basic requirements before setting up their businesses; explore the number of SMEs that have knowledge about formal feasibility studies; examine the number of SMEs that carry out formal feasibility studies before start-up; and assess the impact of formal feasibility studies on the performance of SMEs in Benin City, Edo State. Four research questions were raised to guide this study. The study employed a survey research design using questionnaires to gather data from owners of small and medium-scale businesses in Egor and Ovia North East Local Government Area. Analysis of the questionnaire responses involved both descriptive and inferential statistics, including frequency, percentage, Pearson moment correlation matrix, and linear regression analysis conducted using SPSS version 20 software. Results indicate consistent achievement of financial objectives by businesses and a significant influence of formal feasibility studies on business performance. The study concludes that well-executed feasibility studies greatly contribute to entrepreneurial success, with environmental, market, technical, and economic feasibility studies all playing a positive role. Environmental feasibility studies are particularly impactful. Recommendations include government support for effective feasibility studies, prioritization of market feasibility studies by entrepreneurs, and facilitation of technical information dissemination to aid in technology selection for business activities.