Business and financial feasibility studies for expansion, new products and acquisitions

The four parts below are the same whether the decision is a second restaurant, a new product or an acquisition. What changes is the weight each part carries.

The SBA's guidance on market research says the competitive analysis should identify competitors by product line or service and market segment and assess characteristics such as market share and strengths and weaknesses. The market section of the study follows that structure so a lender used to SBA material finds familiar headings.

No. They overlap in the financial pages and differ in the question. A business plan describes a business and asks for backing. A feasibility study tests whether one decision should go ahead and can come back with a no.

The SBA's business plan guidance asks for a prospective financial outlook for the next five years, with forecasted income statements, balance sheets, cash flow statements and capital expenditure budgets, and for the first year projected quarterly or even monthly. A feasibility study uses the same four statements for the one decision. When the answer is yes, its financial section can be lifted into the plan.

Most expansion models assume the new site or product works. The Bureau of Labor Statistics publishes a base rate worth setting beside that assumption. Of private-sector establishments born in March 2013, 79.6% were still operating a year later, 50.6% after five years and 34.7% after ten (BLS, published January 12, 2024). The rates vary by industry: ten-year survival ranged from 24.5% in mining, quarrying and oil and gas extraction to 50.5% in agriculture, forestry, fishing and hunting. Of the establishments that opened in March 1994, 18.0% were open in March 2017.

An establishment is a single location, so a branch of an existing company counts. That makes the numbers a fair base rate for a new site, not a verdict on any company. The study uses them as a reasonableness check: if the base case needs the new location to beat the base rate, the report says why, and whether the reasons come from your own track record or from hope. The study does not predict whether the location will survive.

Lenders differ, and the lender sets the documents. For the SBA's 7(a) program the SBA states the maximum loan amount is $5 million, that the borrower must be creditworthy and demonstrate a reasonable ability to repay, and that permitted uses include real estate acquisition or improvement, working capital, refinancing business debt, machinery and equipment, and changes of ownership. The SBA page leaves the list of documents to the lender.

A feasibility study is where repayment ability gets shown. The financial section ties the loan amount to the cost of the project, shows the cash flow available to service the debt in each year and tests it against the downside case. Covenants usually follow the loan, and lender covenant reporting covers the compliance reports afterwards. If the money is for investors rather than a lender, fundraising financial models is the page to read. Finbryn does not submit loan applications or speak for you to the lender.

There is no list price. A study for one site with a settled lease is a smaller job than a three-scenario acquisition model. Four things set the scope: how many scenarios the decision needs, how much of the data is already in your books, how many sites or products are compared and whether third-party reports, such as an appraisal or an engineering study, have to be commissioned first. Finbryn does not produce those reports and treats their results as inputs you supply.

The most useful first question is the date the decision has to be made, because the study works backwards from it. Finbryn confirms the scope and fee in writing before work starts. See pricing for how advisory work is scoped.

Finbryn builds the analysis and financial projections from the assumptions and market data stated in the report. It is not an appraisal, valuation opinion or engineering study, and it does not predict results.

It does not appraise a property or a business, give an opinion of value, certify construction cost or confirm a permit. Those come from an appraiser, an engineer or an authority, and their figures enter the model as inputs with their source named. Projections are projections: the report shows the effect of each assumption, and the decision remains with you.