Startup Feasibility Study: Steps and a Simple Framework
A feasibility study answers one question before you commit money: can this business work, here, at this price, with this much cash? It covers the market, operations, finances, legal requirements and risks, and ends with a clear go or no-go decision.
1. Market
- Who is the customer, and how do they solve the problem today?
- How many of them can you realistically reach?
- Who are the competitors, and what do they charge?
- Evidence: interviews, pre-orders, a waitlist or a small paid test
2. Operations
- What you need to deliver: location, equipment, suppliers, staff and systems
- Lead times and minimum orders
- What happens when demand doubles
3. Finances
- Startup costs: one-off launch costs, monthly losses until break-even, and a buffer
- Revenue drivers: customers × conversion × price, not a percentage of the market
- Break-even point and cash needed
- Sensitivity: what if sales are 30% lower, or payments arrive 30 days later?
4. Legal and tax
- Company type, commercial registration, licences and permits
- In Oman, VAT registration is mandatory above OMR 38,500 of annual taxable supplies and voluntary from OMR 19,250
- Contracts, leases and any sector approvals
5. Risks and the decision
List the three risks that could stop the business, what would trigger them, and what you would do. Then set a clear rule: go, change the plan, or stop. A good study is one that can say no.
Why ready-made feasibility studies mislead
Downloadable studies use someone else's rent, prices, wages and market. They are useful as a checklist, not as numbers. Build yours from real quotes and your own customer evidence, then turn it into a cash forecast.
Frequently asked questions
Market, operations, finances, legal and tax, and risks, ending with a go or no-go decision.
Can I use a ready-made PDF study?As a checklist, yes. The numbers must come from your own market, quotes and customers.
How long should it take?It depends on the business. What matters is testing the riskiest assumptions with real evidence before spending most of the money.
Does a bank need a feasibility study?Lenders usually want a business plan with financial projections and a cash forecast. A solid feasibility study is a good base for both.
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Written by Akram El-Karrar, CPA, from the work we do for startups every week.