Essay Sample on A Feasibility Analysis of a Business

Published: 2023-04-10
Essay Sample on A Feasibility Analysis of a Business
Type of paper:  Essay
Categories:  Business management Financial analysis Strategic marketing
Pages: 5
Wordcount: 1181 words
10 min read

Scarborough & Connwall (2015) define a feasibility analysis as an opportunity for reviewing choices, asking oneself crucial questions regarding the idea initially conceived and selected, and whether there is a need for modifying it, refocusing, changing dramatically, or even doing away with it altogether. The essay focuses on performing a feasibility analysis of a selected business to determine if it has profit potential. The chosen business for the feasibility analysis is Magnolia Inn, an enterprise in the restaurant industry. The idea is to start the company in a strategic area that attracts more clients throughout the year. The feasibility analysis will entail evaluating the industry and market, product, or service, financial, and entrepreneurial readiness. A conclusion will be made based on the assessment on whether the business idea needs to be modified, changed significantly, or abandoned.

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Industry and Market Feasibility

Karis (2015) noted that the industry and market feasibility of a business is established by assessing the attractiveness of the sector, target market attractiveness as well as market timeliness. For Magnolia Inn, the industry is attractive enough to ensure the growth of the business in the future. The restaurant industry and market are vast sufficient to provide Magnolia Inn with many products and services to offer to the clients. The market is also promising even though the competition is high with other businesses such as holiday centers and campsites providing similar services to Magnolia Inn. In the UK, 23% of tourists pay for hotel accommodations when compared to 47% who live with relatives and friends (Walton, 2013). The percentage for clients who need accommodation is lower, and this affects the growth of the industry. However, Magnolia Inn and other businesses in the sector are changing the trend. By offering new and cheaper services to tourists in the San Francisco Bay area, the industry and market trends are increasing.

Product or Service Feasibility

The product or service feasibility entails evaluating the desirability of the services or products that the business wants to offer in the marketplace (Kampira, 2018). The entrepreneur assesses whether the intended product or service has a high demand in the market and the ability to meet that need with the new business idea. Magnolia Inn will provide various modern hotel services and of high quality, including a restaurant, swimming pool, a bar, an antique theme, fully furnished rooms, and a waiting lounge. There will be bed and breakfast services to the clients who book to use the hotel services at Magnolia Inn. These are services with high demand in the restaurant industry to provide clients visiting the premises enjoy their time within the hotel.

Financial Feasibility

Fyre (2018) stated that the economic feasibility of a business is evaluated by looking at the startup costs, cash flow, operating expenses as well as forecasting the future performance of the new venture. Magnolia Inn will be located in a strategic area that attracts a steady stream of customers throughout the year. Establishing the business in the scenic Half Moon Bay, California provides a serene environment where clients can comfortably stay for their holidays. A steady flow of customers throughout the year means that the business will experience increased business operations that guarantee cash flow throughout the year and in the long run. The startup costs are expected to be fully met through the contribution of the partners and a small business administration loan. The operating expense will cost approximately $21, 000 as initial capital. The average monthly fixed cost is approximated to be $6, 000 for expenses alongside the interest. These are lower expenses for the partners if the business and the targets they have set for the new venture. The target market is also a promising source and a stable flow of income throughout the year. Couples spend on holidays now and then, and it will be profitable for the business in the long run.

Entrepreneurial Readiness

Entrepreneurial readiness for business entails the person's cognitive characteristics of ability and willingness to direct behavior within the venture context (Schillo, Persaud & Jin, 2016). The business owner should have the needed skills, clear perception of the business, social connectedness, and consider the fear of failure. The entrepreneurial intention of Magnolia Inn is clear to offer services that will meet the needs of the targeted market. The business owners have a positive perception of the success of the new venture within the San Francisco Bay area. Magnolia Inn has social connectedness by ensuring that the business is associated with local theatres that encourage tourists to the city. The targeted market population will be reached by subscription through different web services that will offer international exposure for yearly fees. The owners have a clear perception of the business that it will perform when in the restaurant industry. The partners have an understanding of how to run the new venture and ready to take tasks and duties as managers.

Decision and Conclusion

There is profit potential for Magnolia Inn after establishing the new venture in the San Francisco Bay area. The feasibility analysis shows that there is a massive market for Magnolia Inn to tap from the restaurant industry in the area. Due to competition in the sector, Magnolia Inn needs to be modified a little bit to compete effectively with other similar businesses in the industry. Outdoing the competitors will require Magnolia to be unique and reach out to potential customers through proper advertisement. That will boost its market and lower the percentage of the number of people who will spend their holidays in their friends' and neighbors' houses through the provision of top-notch services and amenities.

The business has set out a few rooms that may not be enough for the clients needing services from the hotel. It means that in the future, demand will exceed the supply, and clients will start looking for similar facilities in other hotels. The facilities in terms of room addition will be necessary. Furthermore, a higher number of rooms available for booking will allow businesses to make more sales and the growth of the market. It would also be a good idea to expand the target market for Magnolia inn to include even the locals who may want to spend their time in the greater San Francisco Bay area. Having a single target market may not help the business to exploit all its capabilities to serve as many clients as possible. Thus, it will limit the number of clients to be served in a single day within a given season.


Fyre, L. (2018). The startup: From the opportunity to a feasibility study to a business plan kindle edition. Services LLC

Kampira, A. (2018). Feasibility studies: New product development and launch. Vol. 1, Afregarde Strategy Guide. ISBN 0620787031, 9780620787031.

Karis, C. (2015). Feasibility study for the small business. Business and Economics. ISBN 0990546691, 9780990546696

Scarborough, N., & Connwall, J. (2015). Entrepreneurship and Effective Small Business Management. 11th Edition. Pearson.

Schillo, R.S., Persaud, A. & Jin, M. (2016). Entrepreneurial readiness in the context of national systems of entrepreneurship. Small Bus Econ, 46, 619-637. Retrieved from

Walton, J. K. (2013). Travel writing and tourism in Britain and Ireland. Tourism Management, 34, 248-249. doi:10.1016/j.tourman.2012.06.013

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