Specialists to 'Al Riyadh': Ignoring market study and customer needs among top reasons for project failure

Feasibility Study: The First Step Towards a Successful Project

Active commercial records exceed 1.7 million by end of Q2 2025

The small and medium enterprises sector in the Kingdom is witnessing accelerated growth, supported by the targets of Saudi Vision 2030, which made entrepreneurship one of the drivers of economic diversification and job creation. With the ease of launching projects, especially electronic ones, many idea owners rush to implementation, believing that enthusiasm or available funding is sufficient to achieve success. However, specialists affirm that the real beginning of any successful project is a realistic feasibility study that builds decisions on numbers, not expectations.

Al-Juaid: Feasibility study transforms ideas into numbers

Academic and economic writer Dr. Bandar Al-Juaid believes that the reality of small and medium enterprises in the Kingdom has become more mature compared to previous years, and the sector is no longer based solely on individual initiatives but has become one of the main drivers of economic transformation. He points out that the number of active commercial records exceeded 1.7 million by the end of the second quarter of 2025, with more than 80,000 new records issued in a single quarter, alongside continuous growth in e-commerce, technical sectors, and promising activities.

He emphasizes that funding alone does not create a successful project, explaining that many projects falter despite available capital due to business model errors such as inaccurate pricing, overestimation of demand, poor cash flow management, or entering a crowded market without a competitive advantage.

Al-Juaid describes the feasibility study as the tool that moves a project from the enthusiasm stage to the numbers stage, as it tests market size, break-even point, profit margin, cash cycle, project sensitivity to cost changes, and its ability to withstand the first 12 to 24 months.

He notes that some still view feasibility studies as a file to obtain funding or licensing, whereas in reality it is a decision-making tool that helps the project owner determine whether to enter the market, at what size, in what location, and at what cost.

He adds that the most prominent mistakes made by entrepreneurs include overestimating sales, neglecting competitor analysis, confusing revenues with profits, not accounting for zakat, taxes, fees, and localization, and depleting capital on decorations and openings before ensuring there is real demand. He stresses that market and competitor studies have become a necessity, as the question is no longer: Is the product good? Rather: Is there a real need for it? Is the customer willing to pay? And why will they choose this project over others?

He believes that the most growing investment opportunities today are linked to Vision 2030 targets, including artificial intelligence, data analysis, financial technology, e-commerce, logistics services, tourism, entertainment, gaming, digital education, auxiliary health services, and local supply chains.

He also believes that the success of studied projects directly reflects on the national economy by creating jobs, increasing private sector contribution, diversifying income sources, and raising local content, noting that the Saudi economy recorded real growth of 4.5% during 2025, while non-oil activities were the main driver of this growth with a contribution of 2.7 percentage points and a growth rate of 4.9%, in addition to the labor market approaching Vision 2030 targets, with the Saudi unemployment rate declining to 7.2% in Q4 2025.

Al-Juaid concludes by emphasizing the necessity of starting with what the market needs, not just what the project owner prefers, testing the idea at the lowest possible cost, building a conservative financial model, calculating the break-even point, maintaining sufficient liquidity for at least six months, and not expanding before numbers prove the project's ability to growth, not just survive.

Al-Osaimi: Creating an online store does not mean creating a successful project

For his part, e-marketing specialist Khaled Al-Osaimi affirms that the ease of launching e-projects has created a misleading impression among some that success is now within reach, whereas the feasibility study remains the first step to answer fundamental questions such as: Who is the customer? What problem does the project solve? Is there a real willingness to pay? And how can the customer be reached and sustainability achieved?

He points out that the feasibility study for e-projects differs from that for traditional projects, as it includes additional elements such as customer acquisition cost, conversion rates, user experience, digital advertising, payment gateways, shipping, returns, and cybersecurity—elements that may determine the project's success or failure.

He adds that one of the most common mistakes is starting to build the store or brand identity before ensuring there is a real market need, explaining that the platform is not a project in itself but merely a sales channel, while the real challenge lies in attracting, convincing, and retaining the customer.

He believes that market testing should precede investment, through a landing page, a limited advertising campaign, pre-orders, or launching a prototype, because the customer's willingness to pay is the real indicator of the idea's viability.

He also warns against neglecting many indirect costs such as content creation, campaign management, payment gateways, shipping, returns, customer service, and technical subscriptions, emphasizing that complete reliance on paid advertising may make the project fragile if it does not have a distinctive product and a good purchasing experience.

Al-Osaimi points out that AI tools can help organize ideas and build prototypes, but they do not replace market research or testing with real customers, confirming that real data remains the basis for decision-making.

He concludes by affirming that backing out of a project after discovering its lack of feasibility is not a failure but a correct investment decision, because stopping a futile idea at the beginning is far less costly than continuing a project that consumes time and money without real indicators of success.

Al-Saadoun: Feasibility study is a road map, not a funding document

Entrepreneur Fahad Al-Saadoun believes that the feasibility study represents the road map for any project, and its absence or reliance on ready-made studies of unknown sources may lead to early failure, because they do not reflect market reality or customer nature.

He emphasizes that every project needs a feasibility study, but the level of detail varies according to the size of investment and risk; small projects may suffice with a simplified study, while larger projects need integrated professional studies.

He points out that the most common mistakes include relying on optimistic sales forecasts, neglecting competitor analysis, and ignoring working capital, noting that understanding consumer behavior has become essential, especially with the rapid changes brought about by technology and social media platforms, which may alter the nature of demand even within the same city.