Stop 06 · Business Modeling & StrategyTopics · 6/9

ROI & Feasibility Analysis

In short

'Will it pay back?' and 'Can we actually pull it off?' are two different questions. ROI answers the first, feasibility answers the second, and a project needs a yes to both.

Return on Investment quantifies expected financial return; feasibility analysis assesses whether a project is realistically achievable given technical, operational, and financial constraints.

The purple blob measures a big clay tandoor oven with a measuring tape inside a small roadside kitchen.

Think of it like this

A new tandoor for the dhaba

A dhaba owner wants a ₹60,000 tandoor to sell rotis and kebabs. ROI asks: how many months of extra sales until it's paid off? Feasibility asks: does it fit in the kitchen, can the cook use it, will the landlord allow it?

Watch it happen

Payback: when does the ₹8 lakh come back?

Y0: -8L

Y1: +3L

Y2: +3L

Y3: +3L

Y4: +3L

1/5A project costs ₹8 lakh now and brings ₹3 lakh net gain each year after.

The big ideas

What you need to know

ROI in one line

ROI = (gain - cost) / cost. Always say over what period, because 50% in one year and 50% in ten are very different.

Payback period

How long until cumulative gains cover the cost. Leaders often care about this more than the ROI percentage.

Four feasibility checks

Technical (can it be built?), operational (will people use it?), financial (can we afford it?), schedule (in time?).

Money later is worth less

₹1 lakh in three years is worth less than ₹1 lakh today. NPV adjusts for that using a discount rate.

See it in code

A tiny example

excel

1=(B3-B2)/B22=NPV(10%, C5:F5) + B53=MATCH(TRUE, INDEX(G5:K5>=0, 0), 0)

ROI from total gain (B3) and cost (B2). NPV discounts years 1 to 4 at 10% and adds the year 0 cost. MATCH finds the first year the running total turns positive.

Save yourself the pain

Common mistakes

Oops

Quoting ROI without a time period or the assumptions behind it.

Do this instead

Say 'ROI of 50% over 4 years, assuming 200 orders a day' so people can test it.

Oops

Treating a great ROI as proof the project can be done.

Do this instead

Run the feasibility checks too. A profitable idea the team can't build in time is still a no.

Your mission

Payback in a sheet

~25 min

Quick check

Project A has 80% ROI but needs a skill nobody on the team has and must launch in 6 weeks. What should a BA flag?

Go deeper

1Calculate a rough ROI estimate for a hypothetical project using conservative assumptions.
2Learn the difference between technical feasibility, operational feasibility, and financial feasibility.
3Practice presenting an ROI estimate alongside its key assumptions, not as a bare number.