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Feasibility study for a Jeddah venture
A feasibility study answers a narrower question than a business plan: should this be built at all? It is the cheaper document, and often the more important one.
- Market, technical and financial viability in one assessment
- Clear recommendation, including "do not proceed"
- Shorter and cheaper than a full business plan
- Typically the first step before a plan or a loan application
What a feasibility study is for
Founders often commission a business plan because a bank asked for one, then discover halfway through that the unit economics do not work. A feasibility study is designed to surface that earlier, when changing course is still cheap.
It answers three questions in sequence:
- Is there demand? Who buys, how often, at what price, and what evidence supports that beyond optimism.
- Can it be delivered? Premises, equipment, suppliers, staffing, licensing constraints, capacity.
- Do the numbers survive? Capital requirement, operating costs, break-even, and the sensitivity that matters most.
The output is a recommendation, not a sales document.
How it differs from a business plan
| Dimension | Feasibility study | Business plan |
|---|---|---|
| Core question | Should this proceed? | How will this be executed and funded? |
| Tone | Analytical, includes a recommendation | Persuasive, built around an ask |
| Length | Usually 15–30 pages | Usually 25–45 pages |
| Financials | Viability tests, scenarios, break-even | Full projections, funding schedule, repayment |
| Timing | Before commitment | Before funding application or launch |
| Cost | Lower | Higher |
If the study says the venture is viable, the plan becomes faster to write because the research is already done. If it says otherwise, you have bought information rather than a document.
The three tests
Market viability. Customer segments, willingness to pay, competitor density, substitute behaviour. Where published data exists it is cited; where it does not, the study relies on structured reasoning and states its limits. I do not invent market sizes.
Technical and operational viability. Can the concept be delivered in the location and format proposed? What space, equipment, staff and suppliers are required? What constraints — utilities, permits, delivery access — could change the cost base?
Financial viability. Capital expenditure, working capital, operating costs, break-even volume and price. Sensitivities on the two or three assumptions that most affect the outcome.
What the deliverable looks like
- A short executive summary with a clear recommendation.
- Market assessment with sources and stated limitations.
- Operational requirements and cost implications.
- Financial viability model in Excel.
- Break-even analysis and sensitivity table.
- Risks and the conditions under which the venture would work.
- An appendix listing what was assumed and what was not verified.
Where the study touches licensing, permitting or sector-specific regulatory requirements, those points are flagged for verification against the relevant authority's published guidance rather than asserted from memory.
Remote research, stated honestly
I do not have a Jeddah field team and I do not pretend otherwise. Primary research — intercept surveys, site visits, supplier meetings — is something you or a local partner would need to arrange. My contribution is structure, secondary research, competitor analysis, financial modelling and an honest reading of what the evidence supports.
For many early-stage decisions that is enough. For a capital-intensive project with a large site-dependent cost base, local verification matters, and the study will say which assumptions need it.
When to skip it
If the business is already operating, or the model is well understood and the only missing document is a plan for a lender, a feasibility study may be unnecessary. I will say so in the scoping call rather than sell you a document you do not need.
What a good recommendation looks like
A feasibility study should end with one of three positions, stated plainly:
| Recommendation | What it means | What follows |
|---|---|---|
| Proceed | The evidence supports the investment at the assumed cost base | Move to a business plan and funding application |
| Proceed with conditions | Viable if specific things are true — a rent ceiling, a confirmed supplier price, a licensing approval | Test the conditions before committing capital |
| Do not proceed | The numbers do not work at a realistic cost and volume | Stop, or change the concept and retest |
A study that ends with "further research is needed" has not done its job. There is always further research available; the point of the exercise is to make a decision with the evidence at hand.
The conditions test
The most useful output for most founders is the second row. It tells them what would have to be true, and therefore what to negotiate before signing anything.
Examples:
- the venture works if rent stays below a stated figure;
- it works if the supplier price holds for the first year;
- it works if the licensing process takes less than a stated number of months;
- it works if the fit-out comes in within a stated budget.
Each condition is a negotiating instruction and a walk-away trigger. That is more actionable than a single verdict.
How it interacts with the plan
If the study is positive, the plan reuses the research and the model, which reduces the cost of the second document. If it is conditional, the plan is written on the assumption that the conditions are met, and the conditions are recorded in the risk section. If it is negative, the plan is not written — and the money saved is the study's return.