For every young entrepreneur with a brilliant business idea, they usually have their most trying moments within the first 5 years of operation. This is the period where the founders have to put their feet on the ground to ensure that by every legal means possible, the company stays afloat. The viability of a business is measured
For every young entrepreneur with a brilliant business idea, they usually have their most trying moments within the first 5 years of operation. This is the period where the founders have to put their feet on the ground to ensure that by every legal means possible, the company stays afloat.
The viability of a business is measured by its long-term survival, and its ability to have sustainable profits over a long period of time. If a business is viable, it is able to survive for many years, because it continues to make a profit year after year after year. So, the longer a company can stay profitable, the better it’s viability.
A business demonstrates its viability by making a profit (no matter how little) every year of its existence. Viability is like trust. Once someone’s trust in someone is shaken, it’s almost impossible to get it back. And once a business loses its profitability, it is difficult to recover. So, viability is linked to profit and here are 6 ways to track your business viability.
1. It should solve a problem
The idea behind any business venture in the world is to provide a particular service that is lacking or not enough, thereby solving an existing problem.
As a prospective entrepreneur, you have to ensure that your business idea solves a problem(s) in some way as this is a major factor that determines the sustainability of the business.
2. How unique is your idea?
The uniqueness of your business idea is another factor that determines the viability or sustainability of your business.
A unique idea that solves real problems is the best way to do business because it easily allows for evolution of the business by trying out new things; which could be risky if not properly thought out, but also very revolutionary if due diligence and caution is taken.
3. How much are people ready to pay for it?
The first two points made earlier are related to this point, especially the second point. This is because, the uniqueness of the solution your business proffers to an existing problem, will determine how much you can get from people who are ready to pay for your service – at least until a competitor arises. Take for instance, DSTV in Nigeria. Football lovers have no other choice than to pay the prices given to them to watch the top matches live and despite that fact, they sometimes still do not get to watch some matches. This is how powerful you get when the service you provide as an entrepreneur is unique without a close competition operating in your space.
This point doesn’t preach exploitation and being inconsiderate of your customers but what it is hammering on is how you can determine how much you get from your customers as an entrepreneur with a unique solution and little or no competition.
4. Is there a sizeable and ready market for it?
This should be one of the first questions to ask yourself before you start your business. It is the available market that will determine how much profit you make, hence viability.
So, you should have tested the idea in the market and done your research to ensure that the market in need of your product is big enough for your business to succeed and make gains.
5. How realistic and feasible is your idea?
If you want your business to stand the test of time and be around for a long time, it has to first pass the feasibility test. It is not enough to come up with an idea out of the blues or to have a dream, vision or goal in your head without being able to implement it or turn it into a successful venture when the chips are down.
6. Let your business idea be simple
Yes, we know that you want to solve the world’s greatest problem and you have the ability to, but please, ensure that your business model is simple to understand. For every complicated problem you are trying to solve, the solution has to be straightforward and easy to understand for your customers, investors and target market at large.