AN EVALUATION OF THE ADOPTION OF A TECHNICAL FEASIBILITY STUDY (REPORT) AS A TOOL FOR SUCCESSFUL BUSINESS OPERATION
The topic of this great dissertation is Evaluation of the impact of technical feasibility study as a tool for successful business operation in Enugu Urban.
The survey and historical research methods were used in the study. A total population of eight hundred and sixty (860) randomly selected respondents out of which a sample size of four hundred (400) was selected using yarmane kurmar’s models. But the effective was three hundred and ninety-one (391) respondents who correctly filled and returned the questionnaires.
Questionnaires method were used in gathering data. Also a review of books, newspaper, magazines and periodicals were carried out the “simple percentage analysis” statistical test of proportion used in treating the data and testing the Hypothesis.
However twenty research question was developed for the respondents.
The study concludes that the level of awareness about the uses of technical feasibility studies report in project analysis and appraisal in Enugu urban is well low. This had contributed immensely to its non utilization among majority of respondents.
There’s therefore need to create awareness of its uses among the populace in order to stem the increased business failure, raise optimal allocation of resources, increase efficiency and effectiveness, reduce risk of business failure and sustenance of losses.
Based on the findings , the researcher recommended massive awareness campaign to the relevant authorities or agencies of the government in order to create the requisite knowledge that will aid prospective investors in taking the right decisions., also individuals and organizations should inculcate the habit of patronizing consultants before embarking on any business venture in order to avail them of expert advice.
BACKGROUND OF THE STUDY
Just as the whole world stepped into the 21st centuryand Nigeria dragging her ship without recourse to her teeming poverty strickening populace of over one hundred & forty million (140,000,000) citizen.(2004 National population census). Yet since over three decades now, after independence from the British coupled with military “Zoombie” incursion into politics, the Nigerian economy has been in a dire stress or doldrums. Consequent upon this, many business ventures have submerged or rather closed shops. Many of those that are still afloat had not made any reasonable impact but are experiencing economic degeneration due to multiplicity of factors, among which is lack of proper Technical feasibility studies/report before embarking in the venture.
Prior to this, however, there was such a boom that basically business ventures yielded a satisfactory quantum of demands, such that numerous business and banks were set up without proper planning/research either (short term or long term). Then when structural adjustment program (SAP) was introduced during the time of Nigerian Head of state General Ibrahim Babangida (IBB) during which most business went out of existence.
The continued economic crunch has highlighted the need for technical feasibility studies/report before embarking on any project.
According to the Holy Bible (KJV) (Luke 14 vs 28 –31) for which of you desiring to build a tower does not first sit down and count the cost whether he has enough to complete it? Otherwise, he has laid a foundation and is not able to finish, all who see him begin to mock him saying “the man begin to build, and was not able to finish” or what king is going to encounter another king in war, will not sit clown first and take counsel whether he is able with ten thousand to mock him… against him with twenty thousand?
Again there is this management adage, which says, “Failing to Plan is Planning to fail” the era of rule in business operations is fast becoming ancient history.
In the same vein, the tremendous progress in information communication technology (ICT) and application has made it imperative that one must take stock before embarking on any venture otherwise more prepared contemporaries competitors and rugged business terrain will submerged the venture though their competitive edge and vicissitude in theeconomy. The need for sound and proper planning is accentuated even more by the nature of the Nigerian economy, which has continued running headless by into the woods. Okpara Avenue that used to thriveto business activities has become the shadow of the past. Most of these business outfits there have now been converted to churches at an alarming rate. At Emene industrial Estate the story is not very different as it is now, a ghost of its past. It has also become a known fact that else where the rate of business failure is equally appalling. A visit to Agbani road to Gariki road, Achara layout or timber shade at Maryland will also confirm this. This kept one in a ponder state or wonder, whether, proper feasibility studies, its impact are well carried out before these business ventures were embarked upon.
It is against this background that the researcher wants to embark on this research topic titled “An Evaluation of the impact of Technical feasibility study As a Tool for successful BusinessOperation –A case of selected companies in Enugu urban, Enugu State, Nigeria.
STATEMENT OF THE PROBLEM
It is believed that business entrants, stay and outlives (Kotler 1980) but the rate of business failures in Enugu metropolis is excessively high, irrespective of the fact that “stay in business is very difficult compared to entry” (Louck 1988). The failure of most business is due to lack of proper planning, foresight by the managers and aggressive implementation of business strategies. The mostly affected are the small-scale business, which in most cases is being managed by the owners, who may lack the managerial skill and knowledge.
Most failure and outlive of business in Enugu is not only based by mismanagement of the business activities but by carrying out of ineffective feasibility skill report; thereby leading the business into wrong and negative steps. Businessmen and women in most cases, falls to place feasibility study into consideration, before embarking on some of her business operations. In such case, the success of such business being embarked on is not determined. According to Baumback (1992), the whole idea of a feasibility study report compliment and facilities are important functions in business planning and control.
The major causes of business failure in Enugu urban seems to be lack of identifying the use of Technical feasibility study as a tool for investment selection. This havoc was caused as a result of military intervention in the administration of the nation affairs, which is yet to be placed in order till date .it is because of above problems that necessitated the evaluation of the impact of technical feasibility study (report) as a tool for successful business operation in Enugu urban.
PURPOSE OF THE STUDY
There is every need to inculcate the practice of carrying out feasibility studies for even the smallest of business ideas before diving head long into what may later turn out to be business water-loo. This study aims at finding out how to:
1. Identifying business failure caused by non-use of feasibility studies.
2. Identifying the use of feasibility study as a tool for investment selection.
3. Identifying whether feasibility studies leads to successful performance in business .
4. Examining factors which might hinder the attainment of the postulation of a feasibility study.
The following research questions were posed to guide the study.
1. Are business failure caused by non use of feasibility studies ?.
2. Are feasibility studies used as a tool for investment selection ?.
3. Do feasibility study leads to a successful performance in business ?.
4. What are the factors that might hinder the postulation of a feasibility studies ?.
Responses to the above research question will help to confirm whether the assumption of the researcher as highlighted or emancipated in the problems and hypothesis hold true or not.
SIGNIFICANCE OF THE STUDY
This study will highlight the relevance of the feasibility study and report in successful business operation. This will be of immense benefits to those wanting to engage in new business venture.
It will also help in minimizing business failure since people will see the need to embark on feasibility studies before starting any business venture.
Again, apart from contributing to the existing literature on this topic, it will be of benefits to those that might like to undertake further studies on this topic or related issues.
It is also hoped that the adoption and implementation of the findings and recommendations of this study will no doubt help significantly in boosting our economy through business success engendered by the use of feasibility studies
SCOPE AND LIMITATIONS OF THE STUDY
Osuala (1993) an adequate statement of the problem also defines it very carefully in terms of its scope. The researcher must set forth exactly the bounds of the topic researched. These are the delimitation and limitations.
This study did not study the entire business outfits in Enugu rather a randomly selected few from which reference can be made. It will depend mainly on historical records as data. Nevertheless, primary data would be gathered from Enugu and surrounding suburbs. The study will deal with the evaluation of the role of feasibility studies like writing the report or carrying out the studies itself.
The availability of correct and up to date data is not easy, even when available one still encounters unnecessary bottleneck due to our socio-cultural milieu, bureaucracy and subterranean motives. This constituted an impediment to this research.
The researcher in the course of the work seriously encountered financial and time constraints. Exorbitant transportation cost, high-level risk of traveling and the geographical spread of database constituted limitations in themselves.
DEFINITION OF TERMS
Technical Feasibility Study
A close examination of the cost and benefits of a project to ascertain whether it is feasible, durable and profitable to undertake as a business venture.
Technical Feasibility Report
A written documented plan or blue print of operation of a business project. A business project, business scheme or undertaken with a view of profit.
Economics loss of fund or loss of firm’s productive aggregates from higher level of production in absence of production. Degeneration connotes reduction in level of business performance.
Commitment of fund in the purchase of assets intended to yield future returns
Plan to invest money in the purchase of an asset or a combination of assets intended for installation to yield return to a business concern