FEASIBILITY STUDIES A REQUIREMENT FOR STARTING A NEW COOPERATIVE BUSINESS IN NIGERIA.
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FEASIBILITY STUDIES A REQUIREMENT FOR STARTING A NEW COOPERATIVE BUSINESS IN NIGERIA.
Chapter one
INTRODUCTION
1.1 Background of the Study
For more than a decade, Nigeria’s economy has been in catastrophic straits or doldrums. The ongoing economic downturn has highlighted the importance of feasibility assessments before commencing on any project.
Feasibility studies involved a more in-depth assessment of a project’s costs and benefits in order to determine whether it is possible, viable, and profitable to pursue such a venture.
The purpose of this study is to inform business owners and the general public about the relevance of a feasibility report in any business initiative, particularly a cooperative business venture.
The impulse to invest can only occur when there is enough money or resources. The need of well-prepared feasibility studies is a prerequisite for beginning a new cooperative firm.
A well-prepared feasibility study can be used to acquire a loan from a bank and attract additional investment. According to Banmbank (2012), it is difficult to wind up a cooperative firm that is supported by solid feasibility studies.
The acknowledged goal is to have the correct commodities at the proper place, timing, and price. He also believes that control is necessary.
The entire concept of a feasibility study complements and helps two crucial functions: business planning and control. Thus, a feasibility analysis determines if a proposed business opportunity will succeed or fail after rigorous consideration of alternatives versus the firm’s objectives. Different perspectives on why people decide to start or join a cooperative group.
Cooperative societies provide an alternate business model for the socioeconomically disadvantaged. It is obvious that the aim or motive for forming a solo trade, partnership, or joint stock company is comparable, but not the same as beginning a new cooperative enterprise in Nigeria.
According to Omuoha (2013), profit is the motivating reason for private businesses, whereas service to members is the motivational drive for cooperatives. The need to choose between investment options emerges regularly in business decisions (Ude 2012).
As a result, you must evaluate your project to see whether it is worth starting a firm. Alternative technologies, industrial equipment, buildings, and other investments are all available for each project. As each option is made, the next challenge is determining which of the several alternatives is the most viable.
1.2 Statement of the Problem
The number of business failures in Enugu state is increasing. According to Louck (2011), “starting a business is very easy; staying in business is very difficult.” Most enterprises fail because their promoters lack sufficient strategic foresight.
This is particularly common in small businesses with an owner and employees. The significance of feasibility studies in the process of founding a new cooperative business cannot be overstated. T
he failure of some cooperative economic ventures raises the question of whether feasibility studies were completed. How effective were the feasibility studies? Were the provisions effectively implemented? What is the nature of staff quality?
The day-to-day running of a cooperative firm is typically handled by people who may lack the necessary skills and technical knowledge.
Against this backdrop, the researcher wishes to pursue the research topic of “feasibility studies: a requirement for starting a new cooperative business in Nigeria.”
1.3 Objectives of the Study
The primary goal of this research is to demonstrate the utility of feasibility studies in the context of beginning a new cooperative enterprise in Nigeria.
The precise objectives include:
1. To determine whether cooperative leaders conduct thorough feasibility assessments before launching a new cooperative enterprise.
2. Identify the causes of business failure in cooperatives.
3. Identify the extent to which cooperatives employ feasibility studies as a tool for investment selection.
4. Determine the association between feasibility studies and business performance in cooperatives.
5. To offer strategies for conducting proper feasibility studies to improve cooperative business performance.
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