BUSINESS FEASIBILITY STUDY AND SUSTAINABILITY OF SMES: A STUDY OF ABEOKUTA SOUTH LOCAL GOVERNMENT AREA, ABEOKUTA OGUN STATE

AKINYELE, SAMUEL TAIWO; AKINYELE, ESTHER FEYISAYO; FADEYI, OLUWASEYI OMOWALE

Authors

AKINYELE, SAMUEL TAIWO Dept. of Entrepreneurial Studies, Federal University of Agriculture, Abeokuta, Ogun State, Nigeria Author
AKINYELE, ESTHER FEYISAYO Dept. of Business Administration, School of Postgraduate Studies, Crawford University Igbesa, Ogun State, Nigeria. Author
FADEYI, OLUWASEYI OMOWALE Dept. of Business Administration, School of Postgraduate Studies, Crawford University Igbesa, Ogun State, Nigeria. Author

Abstract

Business feasibility study is an investigation carried out to access the economic viability of any proposed business. Every business establishment has a possibility of success or failure. Therefore, it is the responsibility of a prospective entrepreneur to know very well about the business. This study investigated the influence of business feasibility study and sustainability of SMEs in Abeokuta South, local government area, Abeokuta, Ogun State. The specific objective of the study investigates the effect economic feasibility on business survival; evaluate the relationship between market feasibility and sales growth; and determine the effect of technical feasibility on productivity. In attaining the highlighted objectives, a well-structured questionnaire was administered for information and data collection. A simple random sampling technique was used for the selection of the respondents from the study areas. Total of 104 respondents were selected across the study area. The analysis of data was done using descriptive tools basically to show the distribution of socio-economic characteristics of the respondents, and inferential to estimate influence of business feasibility study and sustainability of SMEs. Regression and Correlation Models and Chi Square Test were employed. This study findings based on test of the three (3) hypotheses in the study, show that there is no significant effect of economic feasibility on business survival (R2=0.128, F cal.= 13.944, P<0.05 at 0.000 significant level); market feasibility has no significant effect on sales growth (R2=0.132, F cal.= 14.460, P<0.05 at 0.000 significant level); there is no significant effect of technical feasibility on productivity (R2=0.187, F cal.= 21.826, P<0.05 at 0.000 significant level). In conclusion, the study reflected that each of these independent variables play a significant role on sustainability of SMEs in a positive way. Based on these findings, the study recommends that following recommendations: investors should pay special attention to the collection of the required and accurate data about the targeted market and analyze the same before making the decision on establishing the business; It is essential that investors must recognize the reasons of the business feasibility, to avoid waste of capital and seek the advice of the processionals and experts in market analysis; Finally, It is believed that when entrepreneurs are involved in the preparation of their enterprise feasibility study it reduces the challenges they face in its implementation. Therefore, SMEs should be encouraged to undertake feasibility study when making investment decisions.