PREFACE

In the name of God we pray, who has given his mercy on us all so that we can complete
this paper on Business Feasibility Study in the subject of economic, social cultural and
environmental aspects. We have compiled this paper to its best and received assistance from
various references to facilitate the construction of this paper.
Despite all that, we are fully aware that there are still deficiencies both in terms of sentence
structure and grammar. Therefore, with open arms, we accept all suggestions and criticisms from
readers so that we can improve this paper. Finally, we hope that this paper will be useful and can
provide advantages and inspiration to readers.

Denpasar, 17th August 2019

Compiler

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 TABLE OF CONTENTS

Preface…………………………………………………………………..…… i
Table of contents…………………………………………………………….. ii

Bab I. PRELIMINARY
Background ………………………………………………………………..… 1
Problem formulation …………………………………………………………. 1
Perpose………………………………………………………………...……… 2

Bab II. EXPLANATION

Understanding of Economic, Social, Cultural and Environmental aspects..…… 3
Emerging Impacts ………....………………………………….………...……… 4
Increased National Income …..………………….……………………...………. 7
Bab III. CLOSING
CONCLUSION ………………………………………………………………..... 10
BIBLIOGRAPHY .……………………………………………………………… 11

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 BAB I
PRELIMINARY

A. Background
The business feasibility study is needed by many people, especially for investors or
entrepreneurs who will run their businesses. The bank as the lender, and the government that
provides facilities for the control of laws and regulations, which the interests from all of them are
vary from one another. Investors have the interest to find out the level of return on investment,
banks have an interest in knowing the level of credit security provided and the smooth return, the
government places more emphasis on the benefits of these investments at the macro level both for
the economy, equitable employment opportunities, etc. In a feasibility study it is usually divided
into two parts based on the orientation required by a company that is based on profit orientation,
which is designed a study that focuses on economic benefits, and orientation is not on profit
(social), referred to is a study emphasizes a project can be run and implemented without thinking
about the value or economic benefits.
In planning a business, whether for an afresh started business, or any type of business expansion
of an existing business, in addition to considering aspects related to market and marketing,
technical, management issues including environmental impact analysis, it is also necessary to
examine the business benefits for the community. including its influence on the economy of the
surrounding community and the economy of the country. Analysis on the socioeconomic aspects
emphasizes the appraisal of the area to which business projects to be run have support or contribute
to the behavior and patterns of community life including its benefits to the economy of the
community around the business location and the economy of the country in a macro i.e. whether
the business will help economic growth or vice versa, burden the economy, how much business
can absorb labor, how its impact on the welfare of society, the provision of products/services
locally, regionally and nationally, even how the influence of business on changes in foreign
exchange.

B. Problem Formulation
Based on the background of the problem above, there are several problems that have been
formulated, including:
1. What is the definition or understanding of economic, social, cultural and environmental
aspects in business feasibility studies?
2. What are the impacts resulting from economic, social, cultural and environmental
aspects?
3. How do these aspects relate to national income?

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C. Purpose
The purpose of making this paper are:
1. Perceiving the understanding of economic, social, cultural and environmental aspects in
business feasibility studies
2. Understand the impact arising from economic, social, cultural and environmental aspects
3. Understand the relationship of these aspects with national income

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 BAB II
EXPLANATION

A. Understanding Economic, Social, cultural and environmental aspects

Every business that already operated, will have positive and negative impacts. In the economic
and social aspects of the impact given by the investment is more to emphasize the community in
particular and the government in general.
For the community, investment is seen from an economic perspective as it will provide
opportunities to increase their income. Whereas for the government the positive impact obtained
from the economic aspect of providing income, both for the central government and regional
governments.
The most important point is to manage natural resources. Even negative impacts will not be
secluded from economic aspects, for example, exploring excessive natural resources, the influx of
workers from outside the area thereby reducing opportunities for the surrounding community.
The social aspects are managed by natural resources that have not been intervened by humans. The
social aspect has two sides, the negative side, and the positive side. From the negative side,
particularly changes in demographics, culture, and society also change lifestyles, customs, and
other social structures. From the positive side, there is a means of transportation, electricity, air
and the availability of a bridge for the surrounding community.
These economic and social aspects need to be considered because the impacts that arise when
mistakes occur are prevalent. It is assumed that these economic and social aspects will benefit
more from losses if the establishment of a business or project.
The environment in which the business will be run must be carefully analyzed. This is enough to
the environment, on one hand, it can be an opportunity for business to be operated, but on the other
hand, the environment can also be a threat to business development. The existence of business can
affect the environment, both the community environment and the ecological environment.
A business can cause a variety of activities to have an impact on the environment around the
business location. Changes in community life as a result of business activities can be in the form
of increasingly crowded locations around business locations, the development of social
vulnerability, the development of community diseases, as well as lifestyle changes as a result of
the influx of workers from outside the region. An environmental aspect analysis was carried out
to answer "whether the local environment is in line with the business idea that will be run and
whether the business benefits for the environment outweigh the negative impacts?". A business
idea is described as possible based on environmental aspects according to the needs of the business
idea and the business idea can provide benefits greater than the negative impacts in the region.

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B. Emerging Impacts
Broadly speaking, the impact of economic aspects with the existence of a business or investment,
for example, the establishment of a factory, including:
1. The improve of the household economy through:
a) Increased level of family income. The investment will increase income to the community,
especially for those who can be accepted to work on the factory site or those who work
outside the factory site by trading or others.
b) Changes in livelihood patterns. In some areas, the presence of a factory or a business will
change the lifestyle of the community. For example, initially, the community lived on
agriculture, with the presence of many factories turning professions into factory employees.
c) The existence of a double income pattern. For the community around the business location,
in addition to maintaining their original work such as farming, they also work as
employees, thus earning double income.
d) The availability of the number and variety of products and services in the community, so
that people have many choices for the aspired product. Many products and services will
eventually increase competition, so producers are attempting to improve packaging, prices,
product and service quality. So this will affect the selling price on the market.
e) Open employment opportunities for the community while reducing unemployment,
because every new project or business that is built will definitely require additional labor
and this will certainly open up opportunities for workers who are still unemployed.
f) The availability of facilities and infrastructure with the opening of a project or business can
also provide facilities for the wider community and the government as built:
• Highway
• Entertainment facility
• School
• House of worship
• Hospital
• Shopping center
• Electricity.
• Telephone
2. Exploring, regulating and using the economy of natural resources through:
a) Regular ownership and control of natural resources.
b) Efficient and effective land use.
c) Increase value-added Natural resources
d) Increase in other natural resources that have not been touched.
3. Improving the local and regional government economy through:
a) Add work opportunities and opportunities for the community.
b) Provide added value to the manufacturing process.
c) Increasing the type and amount of non-formal economic activity in the community.
d) Impartial distribution of income.

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 e) Potential economic double effect.
f) Increasing Gross Regional Domestic Product (GRDP).
g) Increased Local Revenue (PAD).
h) Add centers of economic growth in certain areas.
i) Providing public facilities that are needed by the community.
j) Save foreign exchange if the products and services produced can reduce the use of imported
goods and services from abroad.
k) Obtain tax revenue from sources that are managed by the company, both from sales revenue
or from other taxes.
4. Regional development
a) Improving equitable development (with priority development in certain areas).
b) Increasing national unity and integrity.
c) The open social environment with the opening of an area.
d) Open the isolation of territory and horizons for the population.

While the social impact of having a project or investment includes, among others:
1. There is a demographic change through:
a) Changes in population structure according to age group, gender, livelihood, and religion.
b) Changes in population density.
c) Population growth, birth rates, infant mortality rates, and migration patterns.
d) Changes in the composition of the workforce both the labor force participation rate and the
unemployment rate
2. Cultural changes which include:
a) The possibility of cultural change through changes in local customs, values and cultural
norms.
b) Social processes occur both associative/collaborative processes, dissociative processes of
social conflict, acculturation, assimilation, and other social and integration.
c) Changes in social/institutional institutions in the economic field.
d) Changes in cultural heritage such as the destruction of sites and cultural heritage.
e) Changes in social strata based on education, economy, work, and power.
f) Changes in power and authority through formal and informal leadership.
g) Changes in community attitudes and perceptions of business plans and or activities.
h) The possibility of crime and conflict between indigenous people and migrants.
i) Changes in ecological adaptation
3. Changes in public health include the occurrence of:
a) Changes in environmental parameters that are expected to be affected by development plans
and affect health.
b) Changes in the process and potential for pollution.
c) Changes in the potential magnitude of the impact of the disease.
d) Changes in specific characteristics of the population at risk of disease.

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 e) Changes in public health resources.
f) Changes in environmental sanitation conditions.
g) Changes in community nutritional status.
h) Changes in environmental conditions that can simplify the process of spreading the disease.

Based on the experience and level of development of science and technology, 5 categories of
activities identified that could potentially have an important impact on the environment, namely:
a) Changing the shape of the land
b) Exploitation of natural resources
c) Processes and activities that can potentially lead to waste, damage and deterioration in the
use of natural resources
d) Processes and activities whose results can affect the social and cultural environment
e) Processes and activities whose results can affect the preservation of natural resource
conservation areas or the protection of cultural reserves

It can be concluded that in the economic aspects important components to be studied include:
1. Household economics (income level, income pattern and multiple income patterns).
2. The economy of natural resources (land-use patterns, land values of natural resources and
other resources).
3. Local and regional economies (providing added value, type and amount of non-formal
economic activity, income distribution, economic double effects, Gross Regional Domestic
Product (GRDP), Regional Original Income (PAD), centers of economic growth, public facilities
and facilities social, regional accessibility).
4. Regional development.

While the important social components to be studied include the following:

1. Demographic Components.
a) Population structure.
b) Population density.
c) Population growth.
d) Labor.
2. Cultural Components.
a) Culture (customs, values and cultural norms).
b) Social process.
c) Cultural heritage (ancient sites, cultural reserves).
d) Public attitudes and perceptions of business plans or activities.
3. Public health.
a) Environmental parameters that are estimated to be affected by the development plan
influence on health.
b) The process and potential for pollution.

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 c) Great potential without the disease (morbidity and mortality).
d) Environmental conditions that can worsen the process of spreading the disease.

C. Increased National Income

In terms of economic aspects, one of the business feasibility or can be seen from the ability of the
investment in increasing national or regional income through increasing GDP and PAD. That is,
the presence of investment will affect the increase in national income and regional income where
the investment is made. Then another feasibility is an increase in income per capita by increasing
the income in line with the growth of the economic sector, and vice versa
To calculate national income can be done through three approaches such as:
1. Production approach
2. Expenditure approach
3. The income approach
A national income with a production approach is the value of all goods and services produced by
a country in a certain year. The way to calculate national income with the production approach is
to add the added value realized by various business fields (economic sectors) in the economy.

In general, there are 11 sectors of business (economic sector) to calculate national income, i.e:
1. Agriculture, animal husbandry, forestry, and fisheries.
2. Mining and quarrying.
3. Processing industry.
4. Electricity, services and drinking water.
5. Buildings.
6. Trade, hotels, and restaurants.
7. Transportation and communication
8. Banks and other financial institutions.
9. Rent a house
10. Government and defense
11. Other services.

Then a national income with expenditure approach is national income which is calculated by
adding up all expenses made by various groups of people in the economy. The intended
expenditure is:
1. Household consumption expenditure.
2. Government consumption and investment expenditure.
3. Entrepreneurs expenditures for investment
4. Import and export, etc

National income with income approach is national income which is calculated by adding up the
exchange of services received by the production factor. The types of income received, i.e:

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 1. Salary and wages.
2. Rent, interest and other income.
3. Indirect tax.
4. Depreciation.
5. Profit (profit).
In practice, national income in developed countries usually uses the expenditure and income
approach. As for developing countries, the production and expenditure approaches are used. Which
method or approach is used depends on whether data is easily obtained in the field and the level
of validity of the data.
With this calculation method, the contribution of projects or investment activities can be known
or their role in national income, such as increased production/output in various sectors, where the
investment is planted in particular and other sectors in general.
In terms of income with the investment, it can be calculated how much the increase in income
received by various groups of people, to increase the level of welfare. Like wise on the expenditure
side carried out by various groups of people, to boost the multiplier effect of other economic
activities.
To help the understanding of national income calculations the following cases will be
provided below

PT ABC wants to carry out investment in industrial plantation forest in Belitung regency,
Babel Province, with an area of 76,000 ha. The investment is estimated to increase the income or
income of the community as follows:

National Income Development Phase Production Stage

Component (rupiah / year) (rupiah / year)

1. Salary 2.351,30 3.476,70

2. Wages 940,50 12.420,50

3. Tax 0 13.200,00

4. Depreciation 1.145,20

5. Profit after tax 0 30.116,00

Total national income 4.437,00 61.653.50

From these data it can be seen that the contribution of industrial plantations or investment projects
carried out by PT ABC amounted to 4,437,000 / year at the plant development stage and increased
again to Rp61,653,500./year at a steady or production stage, so it can be concluded that in terms
of the increase in regional income of the project or business is feasible.

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How to calculate national income for the business world for agriculture X.

The table above illustrates the output produced by an agricultural business X and the production
costs it must incur.

The table above shows 10 similar farmers. So the more farmers the more national income will
increase.

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 BAB III
Conclusion

For the community, investment is seen from an economic perspective as it will provide
opportunities to increase their income. Whereas for the government the positive impact obtained
is from the economic aspect of providing income in the form of income both for the central
government and regional governments. The social aspect is managing and managing natural
resources that have not yet been interfered with by humans. The social aspect has two sides,
particularly the negative side and the positive side. From the negative side are the changes in
demographics, culture, and public health as well as changes in lifestyle, customs, and other social
structures. From the positive side are the existence of transportation, electricity, water and also the
availability of bridges for the surrounding community.

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Bibliography:
 https://www.academia.edu/32387084/Aspek_Ekonomi_dan_Sosial_Studi_Kelayakan_Bisnis
 https://www.academia.edu/4730965/STUDI_KELAYAKAN_BISNIS_DALAM_ASPEK_LINGKUNGAN

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