why do some businesses fail

Why Do Some Businesses Fail, While Others Go Through with Their Business Plan?

A starting point for any business idea is an analysis of the chosen target market. There is a simple explanation behind it – running a business is all about meeting or creating demand. While business plans focus on developing strategies to get the business going, feasibility studies assess the potential of a business idea in an established market. The restaurant business is no different – it all starts with a concept that develops into a business.

About the reviewer

Alex Silensky, expert business consultant and co-owner of OGS Capital, a leading business consulting firm with expertise in strategic business plan development, due diligence and business feasibility studies.

Which comes first – a feasibility study or a business plan?

Any business begins with an idea. And while sample business plans can be used to help formulate a business idea coherently, a business plan is not where you start. The aim of any feasibility study is to assess the feasibility of a business idea. In simpler words – does the startup have potential? It’s no secret that a majority of startups fail within the first year of opening.

Though, there are many factors that can impact the success or failure of a startup, a feasibility study gives an initial assessment of feasibility. A restaurant feasibility study can begin, after a detailed presentation of a business idea is put together. 

Describing your business vision

A business idea is a lot more detailed than: “I want to open a restaurant!”. To carry out a feasibility study, you have to describe in detail at least the following:

  • What kind of business is being started: a restaurant, a cafe, a food truck empire?
  • Why is the business being started? What demands of the target market will be satisfied, and how will it differ from goods and services offered by its competitors?
  • Whom is the business for, or, in other words, a description of the target audience.
  • What business target does the entrepreneur want to achieve?


To understand if a business is going to work, the feasibility of a business idea should be assessed. It is carried out with a thorough examination of the market. Of course, as the last couple of years have shown, not all potential risks that a startup can encounter can be calculated and identified. A business that tries to save up on the costs of a feasibility study, risks being in the percentage of annually failed startups.

A feasibility study comes before a business plan because it assesses the strengths and weaknesses of the business idea. If the business proposal is deemed feasible, the findings of the feasibility study can be used to improve strategies and tailor the idea to best fit the market. 

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