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Feasibility Study & Financial Projections for a Dubai Business
Last reviewed by the Exiloz tax team against the UAE legislation in force on that date. Tax law moves, confirm any figure against tax.gov.ae before you act on it.
A bank funds the model, not the dream
A feasibility study answers one question, and a bank, an investor and a sober founder all ask it the same way: does this make money, and when? Everything else in the document — the market read, the operations plan, the three financial statements, the break-even, the sensitivity — exists to answer that one question with evidence instead of optimism. Get it right and you have a fundable case. Get it wrong and you have an expensive lesson wearing a nice cover page. If you would rather not handle this in house, this is what our budgeting and forecasting covers.
Most feasibility studies fail for the same reason: they are a business plan wearing a spreadsheet. Beautiful narrative, hand-wavy numbers. A UAE bank reviewing your facility, or an investor writing a cheque, reads the numbers first and the story second. So build the numbers to survive scrutiny.
Market and operational assessment
Before any model, two questions. Is there real demand, and can you actually deliver it? The market side sizes the opportunity: who buys, how many, at what price, against which competitors, in which Dubai catchment. The operational side is the reality check founders skip: premises, licence, staff, suppliers, capacity, the lead time to open the doors. A model built on a market that is not there is fiction with decimal places. This is where you kill a bad idea cheaply, before you have signed a lease you cannot walk away from.
The 3-statement model
The heart of the study is three linked statements. The profit and loss shows whether the business is profitable on paper. The balance sheet shows what it owns and owes at a point in time. The cash flow shows the money actually moving, and it is the one that decides whether you survive. Profitable businesses fold every year because they run out of cash before the profit arrives. The three must tie together: profit flows to retained earnings on the balance sheet, working capital and financing flow through the cash statement. If they do not reconcile, a lender's analyst will spot it in minutes, and your credibility leaves with the number.
Break-even: the number everyone circles
Break-even is the first number a banker circles. It is the point where revenue exactly covers costs: zero profit, zero loss. Below it you are burning cash; above it you are building it. The maths is simple. Take your fixed costs and divide by the contribution each sale makes after its own variable cost. What matters is not only the number but the timing. Break-even in month 4 is a very different conversation from break-even in month 30.
Worked example: a Business Bay cafe
Say you are opening a cafe in Business Bay. Monthly fixed costs, covering rent, salaries, the trade licence amortised and utilities, come to AED 45,000. The average customer spends AED 40 and costs you AED 15 in ingredients and consumables, so each cover contributes AED 25. Divide the fixed cost by that contribution and you need 1,800 customers a month to break even. That is 60 a day, every day. Suddenly the question is not 'is a cafe profitable' but 'can this location put 60 paying customers through the door daily', and that you can actually test.
Sensitivity: what if you're wrong
Every projection is a guess dressed up as a number. Sensitivity analysis admits that and asks the useful follow-up: what if you are wrong? Drop the average spend from AED 40 to AED 32 and the same cafe needs about 75 covers a day instead of 60. Push the rent up 20% and break-even climbs again. Run three cases, a base, a conservative and a pessimistic downside, and show the business still stands up in the middle one. That is what turns a projection from a sales pitch into a risk assessment, and it is exactly what a credit committee wants to see.
What a lender or investor actually wants
My stance: it is not a formality
Founders often treat the feasibility study as a box to tick for the bank. That is backwards. The first person it should convince is you. If the model only works when every assumption breaks your way, the bank is doing you a favour by saying no. A feasibility study done properly is the cheapest mistake you will ever make: a few weeks of honest modelling against a few years of a lease you cannot service. Build it to find the flaw, not to hide it. Our budgeting and forecasting and CFO advisory teams build models that survive a credit committee, not just impress a founder.
Build a Feasibility Study That Gets Funded
Exiloz builds the market read, the 3-statement model, the break-even and the sensitivity a UAE bank or investor actually reads. See our CFO & compliance advisory or talk to a Dubai consultant.
Frequently Asked Questions
What is a feasibility study?
A feasibility study tests whether a business idea makes commercial sense before you commit money to it. It pairs a market and operational assessment with a financial model, profit and loss, balance sheet, cash flow, break-even and sensitivity, to answer one question for a bank, investor or founder: does this make money, and when?
What is a 3-statement financial model?
It is a model that links the three core financial statements: the profit and loss (profitability), the balance sheet (what the business owns and owes), and the cash flow (money actually moving). They must tie together, so profit feeds the balance sheet and financing and working capital flow through the cash statement, keeping the picture internally consistent.
How do you calculate break-even?
Divide fixed costs by the contribution each sale makes after its variable cost. A cafe with AED 45,000 monthly fixed costs and AED 25 contribution per customer breaks even at 1,800 customers a month, or 60 a day. Pair the number with a date: when you expect to reach it matters as much as the figure itself.
Why do banks ask for financial projections?
Because a lender is buying your future cash flow, not your idea. Projections show whether the business can service the facility, when it breaks even, and how it holds up if assumptions slip. A defensible three-statement model with a credible downside case is what a UAE credit committee looks for.
What is sensitivity analysis?
It stress-tests the projection by changing key assumptions such as price, volume, rent or cost, to see how far you can be wrong and still survive. Running a base, conservative and downside case turns a single optimistic forecast into a genuine risk assessment.
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