Viability of business idea
Now let’s move on to explore the viability of your initial business idea.
Business viability is about the capability of your business to survive and endure. A business that is not viable will fail.
Generally, a business is considered viable if, in the long term, it generates sufficient profit for the company or owner. Viability is therefore strongly linked to financial performance.
However, for your business to be truly sustainable, the market’s demand for it must endure. Innovation will also be a key factor; in other words, what sells today may not be what your customer wants tomorrow.
Sir James Dyson is a great example of an entrepreneur, whose invention of the bagless vacuum cleaner changed the industry, forcing others to rethink the viability of their own traditional vacuum cleaner businesses.
Choose a strategic tool for analysis of your business viability. There are number of tools that you might consider such as SWOT and PESTLE.
SWOT (Strengths, Weaknesses, Opportunities and Threats) is one of the simplest analysis tools to assess suitability of a business venture
PESTLE (Political, Economic, Social, Technological, Legal and Environmental) can give a better ‘high level’ view of the current challenges facing a new venture
Investigate these tools further and think about how you might apply them in determining the viability of your business.
Which tool do you think might be the most suitable for your business idea and why?
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