What is a feasibility study, and how do you prepare one?

What is a feasibility study?

A feasibility study is the document prepared to decide whether an investment is viable. It brings together the market, the technical requirements, the investment amount, the running costs and the expected cash flow, and answers one question: does this return the money you put in, within a reasonable time?

The key distinction is that it is done before the decision. Its purpose is not to convince you; it is to show you that you are wrong before you spend anything. A study that says “this does not work as designed” has done its job.

Feasibility study vs business plan: what is the difference?

The two get confused because their contents partly overlap. The difference is in the question they ask:

In practice most banks and support programmes want both: the study supplies the numbers, the plan explains how you will reach them. If the numbers are not solid the plan floats free, which is why the study comes first.

What sections does a feasibility study contain?

It varies by sector, but a defensible study covers five analyses:

1. Market analysis. Target audience, size of demand, competitors, price level and seasonality. In food and beverage that means the district's footfall and how full comparable venues are.
2. Technical analysis. Location, floor area, capacity, equipment, licensing requirements and the setup timeline.
3. Financial analysis. Investment budget (CAPEX), monthly running costs (OPEX), revenue model, P&L, cash flow, break-even point and payback period.
4. Risk analysis. What can go wrong and what happens if it does: sensitivity analysis, scenarios, mitigation.
5. Conclusion. The investment decision, and the conditions under which it changes.

The most commonly skipped of these is cash flow. A venue that looks profitable on paper can close in its first months because the till ran dry. Profitability and cash are not the same thing.

How do you prepare a feasibility study, step by step?

1. Settle the concept and the budget. Write down what you are opening and what you can genuinely put in. Choosing the concept to fit the budget hurts less than the reverse.

2. List the investment lines. Fit-out, equipment, furniture, deposit, key money, opening stock, licence fees and at least three months of working capital. See the cost guide for a full list.

3. Build the revenue model. Capacity × turns × occupancy × average ticket. Not a guess: how many seats, how often they fill, how much is spent.

4. Put running costs on a monthly basis. Rent and withholding, staff and employer social security, energy, ingredients, POS and platform commissions, accounting. In Turkey these move during the year with inflation and the minimum wage; assuming them flat is the commonest error.

5. Spread it over 36 months. With the opening ramp, seasonality, price-increase periods and effects such as Ramadan. Annualising a single “normal month” misleads.

6. Find break-even and payback. How many customers a day it takes, and how many months until you are whole.

7. Add scenarios and risks. What happens if rent rises 10%, or occupancy falls 10%. This section is what makes the study defensible.

8. Mark your assumptions. Which figure came from you and which from an industry average. It is the first thing an investor will ask.

Who asks for a feasibility study?

• Banks, to see the project's capacity to repay a loan.
• KOSGEB and similar support programmes, as part of the application file.
• Investment incentive certificate applications, for the investment amount and employment effect.
• Angel investors and partners, to see how their money comes back.
• You. This is the reader who matters most: even if you show it to nobody, working the numbers may change your decision.

The commonest mistakes

• Forgetting working capital. The opening cost gets calculated; the three months after opening do not.
• Ignoring the rent-to-revenue ratio. Rent closes more venues than anything else; past a certain share of revenue the model cannot be rescued.
• Writing one scenario. Modelling only the optimistic case is a wish, not a study.
• Assuming flat inflation. Costs and menu prices do not rise at the same speed, and the gap eats the margin.
• Confusing profit with cash. The P&L can be positive while the bank balance is not.

How does FIZIBI produce this report?

FIZIBI turns the steps above into questions. It asks about your concept, city, floor area and menu prices; where you do not know, it uses an industry average and marks that in the report. A deterministic finance engine computes the 36-month P&L, cash flow, break-even and sensitivity analysis. AI writes only the narrative; every figure in that text is checked against the engine's output, and any paragraph that does not match is discarded.

The output is a 14-chapter report, a 16+ slide investor deck and an Excel model. You can look at the sample report or read how it compares to a consultant and a general AI chatbot.