CHAPTER I

INTRODUCTION

This chapter focuses attention on what forms the background of the study, statement of the problem, purpose of the study, it’s significance, research questions, scope and limitations of the study and definition of terms.

1.1 Background of the Study

For over a decade now, the Nigeria economy has been in dire economic doldrums either as a result of global economic melt-down or other reasons not known yet.

The continued economic crunch has highlighted the need for feasibility studies before embarking on any project. Nevertheless, within the above date range many new businesses that were set up crumbled and withered away for many reasons of which one of them is lack of proper and a solid foundation. When a business like a building lacks a solid foundation, it is bound to crash; if not immediately at its inception very soon. This situation, therefore, calls for a very good business plan before one sets a new business.

To make a very good business plan, the researchers believe that potential business owner must undergo a proper feasibility study. Feasibility study involves closer examination of costs and potential benefits of a project or a business with a view to ascertain whether it is feasible, viable and profitable to undertake such venture. If this proper study is done, it will reduce the unnecessary risks and wastages incurred by inexperienced businesses. The feasibility studies when undertaken will show whether a proposed business opportunity will succeed or fail after a careful consideration of alternatives against the firm’s objectives has been made. This will help the owner to minimize unnecessary wastage of time, resources and energy in embarking on such venture instead channel them to any other venture that will be more profitable.