Anyone planning to start a business in Egypt hears the same advice: do a feasibility study first. Yet many of the studies in circulation, especially ready-made templates, are pages of general text about how important the sector is, global figures with no connection to the street where the business will open, and an optimistic profit table at the end. That kind of document can complete a paper file. It does not answer the question that matters to you: will you make money or lose it, and how much will it cost to find out?
This guide explains how a feasibility study should be written for a small or medium business in Egypt in 2026: what it contains, how to calculate each part, which official figures must go into your numbers, and a complete worked example. It is written for Egyptian founders and for foreign founders and investors setting up in Egypt. Every official figure is linked to its source in the list at the end.
What is a feasibility study, and why do banks and investors ask for one?
A feasibility study is a structured analysis, done before you invest, that answers four questions. Is there enough demand for what you will sell, at the price you plan to charge? Can you deliver it for less than that price? Is the difference between price and cost enough to pay the fixed costs? And how much money do you need until you reach that point? The UNIDO Manual for the Preparation of Industrial Feasibility Studies, the reference most professional methods are built on, organises a study into market analysis, inputs and location, technology and organisation, and then the financial and economic evaluation1.
Banks ask for a study for a practical reason: they want to know where the loan repayments will come from. Banque Misr, for example, requires "a feasibility study from a certified public accountant" for newly established projects in its small-business finance programme2, and Egypt's Micro, Small and Medium Enterprise Development Agency (MSMEDA) requires "the technical and economic feasibility of the project"; for its direct loans it does not ask for a ready-made study but helps the founder prepare one3. Investors and partners ask for much the same reason: they want to see that you know your numbers, not that you hope for them.
More important than the bank or the partner is you. According to the 2022/2023 economic census, micro, small and medium enterprises make up 48.5% of business establishments in Egypt and employ 53.1% of private-sector workers4, and many of their owners start with their own savings. A good study may tell you "do not start it this way". That is the cheapest advice you will ever get for your business.
The ten parts of a feasibility study
Names vary from one reference to another, but a complete feasibility study for a small business should cover the following. The last column shows what the reader is looking for when deciding, whether that reader is a bank, a partner or you.
| Part | The question it answers | What the reader looks for |
|---|---|---|
| 1. Summary and verdict | Do we start, and when does the business cover its costs? | A clear decision based on numbers, not a general description |
| 2. Market | How many customers can you actually reach each month? | A bottom-up estimate tied to the location |
| 3. Competitors | Who sells the same thing, and at what price? | Real names and prices, not "moderate competition" |
| 4. Pricing and unit cost | How much do you make on each sale? | A clear contribution margin per product or service |
| 5. Investment costs | How much do you need before the first sale? | An itemised list at current prices |
| 6. Fixed costs | What do you pay every month regardless of sales? | Full wages, social insurance, rent and utilities |
| 7. Cash flow | When does money come in and when does it go out? | A monthly table for at least one year |
| 8. Break-even and capital | When does the business pay for itself, and how much do you need until then? | A calculated figure with a safety cushion |
| 9. Scenarios and risks | What happens if sales come in lower? | A pessimistic case and a plan for each main risk |
| 10. Legal and tax | Which licences and obligations apply? | Legal form, taxes and social insurance |
Parts 4 to 8 are the core. The early parts explain; these parts decide. If your time is short, start there.
Step 1: Estimate demand from the bottom up
The best-known mistake in feasibility studies could be called the one-percent mistake. The study opens with a market worth billions, then assumes the business will win 1% of it. The result looks modest, but it rests on nothing. No customer buys because you assumed a market share.
The sounder method is a bottom-up estimate built from three numbers:
- How many people you can reach each month: the people walking past the shop, the residents your advertising can reach, or the companies on a list you can actually contact with your marketing budget.
- The share of them who will buy: usually small. For digital ads aimed at people who do not know you, a realistic rate is often below a few percent; it is higher for shops that customers walk past and see.
- How often each customer buys: how many times a month? A cup of coffee may repeat daily; a company-formation service may never repeat.
Multiply the three and you have your monthly sales once the business has settled. The method forces you to think about how customers will find you, and it lets any reader challenge each number separately. Do not start at that figure in the first month either. New businesses usually need several months to reach steady sales, so assume a gradual ramp.
Step 2: Competitors and prices
List the direct competitors in your area or online, what they sell and at what price. Then add the cheapest or free alternative the customer uses today. Often the real competitor is not a similar shop but the customer doing the job themselves or doing without. This step sets the ceiling on what you can charge and shows whether your idea offers something different.
Avoid phrases such as "moderate competition" or "no competitors". The first means nothing; the second usually means the search was not thorough enough, or that the demand itself does not exist.
Step 3: Costs with Egypt's 2026 figures
Costs fall into three types, each calculated differently:
| Type | Examples | When it is paid |
|---|---|---|
| Investment (one-off) | Equipment, fit-out, company formation and licences, rent deposit, opening stock, launch marketing | Before the first sale |
| Fixed (monthly) | Wages, social insurance, rent, utilities, ongoing marketing, accounting | Every month, even with no sales |
| Variable (per unit) | Materials, packaging, delivery, payment gateway or platform commission | With every sale |
Some fixed costs in Egypt are not estimates but legal obligations, and they must appear in the study as they are:
- Minimum wage: the private-sector minimum wage is EGP 7,000 a month since 1 March 2025, and as of October 2026 no increase has been decided for the private sector (the July 2026 rise to EGP 8,000 applies to state employees)5. A study that assumes a full-time wage below that is wrong from the start.
- Social insurance: under Social Insurance and Pensions Law No. 148 of 2019, the employer pays 18.75% of the insurable wage and the employee 11%6; in 2026 contributions are calculated on an insurable wage between EGP 2,700 and EGP 16,700 a month. The employer's share is a cost on top of the salary, and many studies leave it out.
- Rent and utilities: use prices from real listings in the same area at the time of the study, and add the rent deposit (often one or two months) to investment costs.
For variable costs, count everything paid with each sale: materials, packaging, delivery if you pay for it, payment gateway or platform commission, and an allowance for returns or waste if your activity has them. The difference between the selling price and this cost is the contribution margin: the amount each sale contributes towards the fixed costs.
Step 4: Legal form and taxes
The legal form decides the paperwork and your liability for the business's debts. A small founder usually has three options: a sole proprietorship, a one-person company, or a limited liability company when there are partners. The General Authority for Investment (GAFI) allows sole proprietorships and LLCs to be formed online, and the minimum capital for a one-person company is EGP 1,0007. Law No. 152 of 2020 classifies a business as micro, small or medium by annual turnover, or by paid-up capital for new businesses: micro below EGP 1 million of annual turnover, small from EGP 1 million to below 50 million, and medium from EGP 50 million to 200 million8. A draft amendment raising these thresholds was approved by the Cabinet in February 2026 but had not been enacted when this article was written, and that classification decides which incentives and finance programmes you can use.
For taxes, there are four figures to know before you write the profit table:
| Item | Rule | Source |
|---|---|---|
| Corporate income tax | 22.5% of net taxable profit, unchanged by the July 2026 amendments | 9 |
| Simplified tax regime for small businesses | For businesses with annual turnover up to EGP 20 million: tax of 0.4% to 1.5% of turnover by bracket, on condition of joining the e-invoice or e-receipt system | 10 |
| Value added tax (VAT) | Standard rate 14%; registration is mandatory once sales reach EGP 500,000 within 12 months | 11 |
| E-invoicing and e-receipts | Mandatory for the groups of taxpayers named in Tax Authority decisions, in phases; the latest published e-receipt phase started on 15 November 2025 | 12 |
One point about VAT matters a great deal: if your consumer prices include VAT, part of every price is not your revenue but tax you will pass on. At a 14% rate, about 12.3% of a VAT-inclusive price is tax (14 ÷ 114). Leave this out and your profit on paper will look higher than it is by roughly that much.
Step 5: A complete worked example
Let us apply all of this to one example: a takeaway coffee kiosk in a residential area of Cairo. The figures below are illustrative assumptions to show the method, not documented market prices, except for wages and social insurance, which follow the official rules above. The calculations come from the Kleverz financial engine, the same engine used in the detailed studies.
Assumptions
| Item | Value |
|---|---|
| Price per cup | EGP 45 |
| Variable cost per cup (coffee, milk, cup and lid, payment fee) | EGP 18 |
| Contribution margin per cup | EGP 27 (60%) |
| Sales once settled | 3,000 cups a month (about 100 a day) |
| Time to reach settled sales | 6 months after opening |
| First month of sales | Month 2 (month 1 is set-up) |
| Investment costs | EGP 310,000 |
| Monthly fixed costs incl. employer insurance | EGP 45,000 |
| Available capital | EGP 400,000 |
Investment costs cover an espresso machine and grinder (180,000), kiosk fit-out (60,000), formation and licences (15,000), a two-month rent deposit (30,000), opening stock (15,000) and launch marketing (10,000). Fixed costs cover rent of 15,000, two baristas at 16,000 in total (8,000 each, above the minimum wage), the employer's insurance share of 3,000 (18.75% of 16,000), utilities of 3,500, marketing of 4,000, an outside accountant at 1,500, and maintenance and sundries of 2,000.
Break-even
Operating break-even is the sales volume that fully covers fixed costs. The rule is simple: monthly fixed costs ÷ contribution margin per unit. In the example, 45,000 ÷ 27 = about 1,667 cups a month, roughly 56 a day, or EGP 75,000 of monthly revenue. The plan assumes 3,000 cups, close to twice the break-even volume, which is a healthy margin of safety.
First-year cash flow
| Month | Revenue | Net for the month | Cumulative balance |
|---|---|---|---|
| 1 (set-up) | 0 | -332,500 | -332,500 |
| 2 | 22,500 | -31,500 | -364,000 |
| 3 | 45,000 | -18,000 | -382,000 |
| 4 | 67,500 | -4,500 | -386,500 |
| 5 | 90,000 | 9,000 | -377,500 |
| 6 | 112,500 | 22,500 | -355,000 |
| 7 | 135,000 | 36,000 | -319,000 |
| 12 | 135,000 | 36,000 | -139,000 |
Three things stand out. First, the business makes a monthly profit from month 5: that is operating break-even. Second, the cumulative balance keeps falling until month 4, reaching EGP -386,500. That is the deepest point, the most money you will actually need. Third, the first year ends with a cumulative loss of EGP 139,000, even though the business has been profitable every month since month 5, because the investment costs take longer to recover. In this example the cumulative balance returns to zero (the payback point) in month 15.
The capital you need
Capital needed = the deepest point of the cumulative balance + a safety cushion. In the example: 386,500 + a cushion of two months of fixed costs (90,000) = EGP 476,500. The founder has 400,000. That is, in theory, enough to get through the deepest point, but it leaves too little cushion: the shortfall against the recommended level is about EGP 76,500. That does not mean the project fails. It means that before starting, the founder should raise the difference, cut the investment cost, or start with a smaller machine.
Step 6: Scenarios
Real sales rarely match the assumption, so a study needs at least three scenarios. In the example, the pessimistic case assumes 25% lower sales, 5% lower prices, a one-month delay in opening, 10% higher fixed costs and a slower ramp to settled sales:
| Scenario | Break-even month | Payback month | Peak cash need (EGP) |
|---|---|---|---|
| Pessimistic | 10 | After month 36 | 532,750 |
| Realistic | 5 | 15 | 386,500 |
| Optimistic | 4 | 12 | 364,180 |
The pessimistic case matters most here. If it happens, the available EGP 400,000 is not enough; the business needs more than EGP 530,000. A good study does not hide this. It tells the founder what to watch early. In this example, the deciding signal is average daily cups in month 3: if it is well below 50, the pessimistic case is the closer one, and the decision should be made early.
Inflation and interest: do not assume fixed prices
A three-year study for Egypt written at fixed prices is incomplete. Annual urban headline inflation was 13.9% in September 2026, and on 24 September 2026 the Central Bank of Egypt held its overnight deposit rate at 19% and its lending rate at 20%13. This affects your study in two ways. First, costs in years two and three must rise, and so should prices if the market allows; a business whose costs rise while its prices cannot follow loses its margin over time. Second, the interest rate sets the minimum return your project has to beat. If the expected return on your capital is close to what a bank certificate of deposit pays with almost no risk, it is fair to ask why you would take on the risk and effort of the business.
In the example we assumed costs and prices rising 12% a year, with sales volume growing 10% in year two and 8% in year three. Written at fixed prices, the later years would look better or worse than reality, depending on whether you can move your prices.
Seven common feasibility study mistakes
- Starting from a share of the total market instead of the customers you can actually reach.
- Leaving out the employer's social insurance share, or assuming wages below the private-sector minimum.
- Treating capital as the set-up cost only, forgetting the loss-making months before break-even.
- Assuming full sales from the first month, with no set-up period and no ramp.
- Confusing revenue with profit, or counting VAT as revenue.
- A single optimistic scenario, with no test of what happens if sales are lower.
- Unsourced market figures, or global numbers unrelated to the area where the business will operate.
Is a ready-made feasibility study PDF enough?
Search results for feasibility studies in Egypt are full of sites offering ready-made studies for dozens of businesses. They help you understand the general items for an activity, but they are not a sound basis for an investment decision, for three reasons. Their prices were written at another time, often before waves of inflation and exchange-rate changes. Their assumed demand has nothing to do with your area or your ability to reach customers. And they know nothing about your capital. A study you base a decision on should start from your numbers: your price, your cost, your location and your capital.
That does not mean every study must cost tens of thousands of pounds and take months. What matters is that the numbers are right and consistent: the cash flow comes from the same assumptions, break-even and capital are calculated from the cash flow, and the result is tested against a pessimistic case. This is what the Kleverz detailed study does. It starts from your project's numbers, researches current market prices with their sources, calculates everything in one engine so that no part contradicts another, and tells you plainly if the numbers are not in your favour.
Frequently asked questions
How long does a feasibility study for a small business take?
It depends on who prepares it and how detailed it is. More important than the time is that it covers the ten parts above and that the numbers are consistent: cash flow calculated from the assumptions, and break-even and capital calculated from the cash flow.
Can I prepare a feasibility study myself?
Yes, if you follow the steps in this guide and base your numbers on real sources. The hardest parts are usually estimating demand, getting mandatory costs such as social insurance and taxes right, and calculating capital from the cash flow.
What is the difference between break-even and payback?
Break-even is the month in which sales cover the monthly costs, so the business starts making a monthly profit. Payback is the time until you have recovered everything you spent, including investment costs and the early months' losses. In the example, the first is month 5 and the second is month 15.
How large should the capital safety cushion be?
There is no required figure, but a common practice is to add two to three months of fixed costs on top of the deepest point of the cash flow, and more if demand has not been tested.
Will a bank accept any feasibility study?
Banks care that the study is complete and consistent, and that it shows the business can repay the finance from its cash flow. Check the document list of the bank or finance body you are dealing with before preparing the study, because each has its own requirements. Some banks require the study for a newly established project to be certified by a chartered accountant.
Can a foreign founder use this method for a business in Egypt?
Yes. The method is the same; what changes are the legal steps of setting up the company and any rules specific to foreign ownership in your activity, which should be checked with a specialist before you commit capital.
Sources
- UNIDO (Behrens & Hawranek). Manual for the Preparation of Industrial Feasibility Studies, revised edition (1991). Checked 14 October 2026.
- Banque Misr. تمويل المشروعات الصغيرة (in Arabic). Checked 14 October 2026.
- MSMEDA. Frequently asked questions; MSMEDA. Direct lending. Checked 14 October 2026.
- Youm7. التعداد الاقتصادي السادس 2022/2023: خريطة جديدة لاقتصاد يتغير (in Arabic) (2025-11-26) — secondary source. Checked 14 October 2026.
- Masrawy. هل ترتفع مرتبات العاملين بالقطاع الخاص تزامنًا مع الحكومة (in Arabic) (2026-06-14) — secondary source. Checked 14 October 2026.
- NOSI. رفع الحدين الأدنى والأقصى لأجر الاشتراك اعتبارًا من 1 يناير 2026 (in Arabic) (2025-11-30); Andersen Egypt. Social insurance in Egypt (contribution rates under Law 148/2019) — secondary source. Checked 14 October 2026.
- GAFI. الصفحة الرئيسية وخدمة التأسيس الإلكتروني (in Arabic); Masrawy. قرار حكومي: تأسيس شركة الشخص الواحد برأس مال 1000 جنيه (in Arabic) (2022-08-11) — secondary source. Checked 14 October 2026.
- MSMEDA. قانون تنمية المشروعات المتوسطة والصغيرة ومتناهية الصغر رقم 152 لسنة 2020، المادة 1 (in Arabic) (2020-07-15). Checked 14 October 2026.
- PwC Worldwide Tax Summaries. Egypt: Taxes on corporate income (2026-08-17) — secondary source. Checked 14 October 2026.
- ETA. القانون رقم 6 لسنة 2025 (النظام الضريبي المبسط)، الجريدة الرسمية (in Arabic) (2025-02-12). Checked 14 October 2026.
- ETA. القانون رقم 149 لسنة 2026 بتعديل قانون الضريبة على القيمة المضافة، الجريدة الرسمية (in Arabic) (2026-07-28); FRA. القانون رقم 67 لسنة 2016 وفقًا لآخر تعديل (المادة 16: حد التسجيل) (in Arabic). Checked 14 October 2026.
- ETA. قرارات الإلزام بالتعامل بالإيصال الإلكتروني (in Arabic). Checked 14 October 2026.
- Daily News Egypt. Egypt's annual urban inflation eases to 13.9% in September (2026-10-10) — secondary source; Egypt Today. CBE holds interest rates steady, keeps deposit rate at 19% (2026-09-24) — secondary source. Checked 14 October 2026.
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