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evaluating their entrepreneurial ideas, they can make sure their

choices make the best use of those limited resources.

4. To minimize risks while maximizing return

The final reason why idea evaluation is important has to do with

the desire to minimize risks while maximizing returns. Naturally,

one does like to have the least uncertainty (risk) while getting the
largest payback (return) from entrepreneurial decisions and

actions, an entrepreneur puts in the effort to evaluate potential

entrepreneurial ideas, and there is an opportunity to minimize the

level of risk exposure while maximizing the possible amount of

payoff return.

Feasibility Study

“A feasibility study can be defined as a controlled process for
identifying problems and opportunities, determining objectives,

describing situations, defining successful outcomes, and assessing the

range of costs and benefits associated with several alternatives for

solving a problem.”

The information gathered and presented in a feasibility study will help

entrepreneurs to:

i. List in detail all the things they need to make the business

work;
ii. Identify logistical and other business-related problems and

solutions;

iii. Develop marketing strategies to convince a bank or investor

that their business is worth considering as an investment; and
iv. Serve as a solid foundation for developing their business plans.