Feasibility Studies

The purpose is to be capable of a negative answer

A feasibility study that cannot conclude against the project is a marketing document. Its entire value lies in being genuinely capable of saying no.

That sounds obvious and it is routinely ignored, because most feasibility studies are commissioned by somebody who has already decided. The study is then built to support the decision, the assumptions are chosen accordingly, and the conclusion is reached before the analysis starts.

We have concluded against projects, and clients have not proceeded. Those are among the most valuable engagements we do, measured by capital not lost. If you want a document that says yes, there are firms that will produce one; the question is what it is worth when the bank reads it.

Who we do this for

Entrepreneurs launching a new venture, particularly where external funding is involved. Existing businesses considering an expansion — a second location, a new market, a new product line, a manufacturing capability.

Businesses required to produce one: some free zone authorities require a feasibility study or business plan as part of the licensing process, and banks generally require one for project finance. Investors expect one for anything that is not simply more of what already works.

What we actually do

The sequence matters here, so we run it the same way each time:

1. Define the project precisely. Scope, scale, location, timing. Vague projects produce vague studies, and most of the value is in the definition.
2. Assess the market: size, growth, segmentation, and the customer the venture actually depends on. Not a market overview — the specific demand this project needs.
3. Analyse competition, including how incumbents are likely to respond, which optimistic studies routinely omit.
4. Test operational feasibility: premises, licensing, staffing, supply chain, equipment, timelines. This is where projects most often fail, and it is the least glamorous section.
5. Establish the regulatory position — licence type, activity approvals, free zone versus mainland, visa quotas, sector-specific requirements.
6. Build the financial model: capital requirement, operating projections, working capital, break-even, and returns.
7. Test the downside properly, including a case in which the project does not work, and identify what would have to be true for it to fail.
8. Conclude, with the reasoning visible — proceed, proceed with modifications, or do not proceed.

Where UAE projects most often fail

The financial projections are usually not where the problem is. The problems are operational and regulatory, and they are foreseeable:

• Licensing and activity approvals — the intended activity not permitted under the licence sought, or requiring an approval nobody scoped
• Premises — fit-out cost and timeline underestimated, or the location not approved for the activity
• Visa quotas — headcount plans exceeding what the licence and premises support
• Working capital — funded for capital expenditure and launch but not for the months of trading before cash turns positive
• Ramp-up assumptions — a revenue curve that reaches maturity in months when comparable businesses took years
• Sector requirements — healthcare, food, education and financial services each carry approvals with their own timelines

The most common single failure is the fourth. A project funded to open and not to trade runs out of money while doing everything else right, and it is entirely avoidable with an honest working capital calculation.

What a bank or free zone actually looks for

A study prepared for a third party has an audience, and that audience is reading for specific things.

Banks look for debt service capacity under a downside case, a genuine capital contribution from the promoter, security, and evidence that the promoter understands the operational risks rather than only the opportunity. Free zone authorities look for activity alignment with the licence, plausible headcount and premises requirements, and a business that will still exist at renewal.

Investors look for the market claim to be evidenced rather than asserted, the competitive response to be addressed, and the downside case to be real.

What all three discount immediately is a study where every assumption favours the project. Internal consistency and an honest downside carry more weight than an impressive headline return.

The failures we are called in to fix

What we see most often:

• Commissioning a study to justify a decision already made, which produces a document nobody external will credit.
• Market analysis by extrapolation from a global report, rather than assessment of the specific demand this project needs.
• Ignoring competitive response, as though incumbents will watch a new entrant take share.
• Underestimating the regulatory timeline, particularly in regulated sectors where approvals precede everything.
• Funding capital expenditure but not working capital, the most common way a well-conceived project fails.
• A ramp-up curve nobody in the sector has achieved.
• A downside case that is only mildly worse than base, which is not a downside case.

The timing

Before commitment — before the lease is signed, the licence bought or the equipment ordered. A study conducted after those commitments can only tell you how large the problem is.

Where the study is required by a bank or free zone, allow time for questions and revisions; these are rarely accepted first time without discussion. And where a study concludes against a project, allow yourself the time to actually consider that answer rather than commissioning another study.

Deliverables

• A market assessment specific to the project rather than the sector
• Competitive analysis including likely incumbent response
• An operational plan with timelines and dependencies
• A regulatory and licensing assessment
• A full financial model with capital requirement, break-even and returns
• Genuine downside scenarios and the risks that would cause them
• A clear conclusion with the reasoning visible

What we need from you

Nothing exotic, and most of it you already have:

• A clear description of the proposed project
• Any market research or industry data already gathered
• Cost estimates: premises, fit-out, equipment, licensing
• The intended staffing plan
• Pricing intentions and the basis for them
• Details of available funding and its structure
• Promoter experience and track record in the sector
• Details of any regulatory approvals already sought

What it costs

Fixed fee, scoped on the sector, the complexity of the project and whether the study is for internal decision-making or for a third party. Studies for banks and free zones require more supporting evidence and are priced accordingly.

We agree the scope before starting, including — explicitly — that the conclusion is not agreed in advance. Any firm willing to agree the conclusion in advance is selling a document rather than an assessment.

Related

Frequently Asked Questions

Last reviewed 27 July 2026. Rates, thresholds and deadlines change — the e-invoicing provider deadline has already moved once. Confirm current requirements with the Federal Tax Authority before acting, or ask us to check your position.