The first few years of a start-up business are the most critical. If it can't create enough momentum at this stage of its life, chances are, it won't last long. The Australian Bureau of Statistics reports that an average of 44 small businesses close up shop every day. Aside from rising energy costs and labour costs, lack of local government support is also cited as a small business killer.
Ensuring the survival of any small business involves taking these risks into account even before you open up shop. This is where a feasibility study comes in, a formalised paper on the viability of a business at a given location. While you can conduct your own feasibility study, businesses often call upon economic analysts for this task.
You can create a basic premise by detailing four aspects of your business: the product/service, local market, price, and long-term plan. Each aspect hosts a number of questions, determining the nature of your product/service, your preferred supplier, average income of the target market, possibility of offering discounts, and so on.
The results of the study should tell how profitable your leased location is. However, it's not a surefire indication of what to expect in running a business. You have to be ready for unforeseen circumstances like an abrupt economic downturn, even if the feasibility study says otherwise.