Business Viability: What It Means Business viability refers to a business’s ability to sustain its operations and generate profits over the long term. Here are the key points to understand:

  1. Profitability: A viable business is profitable. This means that it has more revenue coming in than it spends on the costs of running the business. Profitability is essential for long-term survival.

  2. Marketing Strategy: Creating a viable business involves two critical steps. First, you need to develop a solid marketing strategy. This includes understanding who your target customers are, identifying your unique selling proposition (what sets your business apart), and considering your competitive advantage.

    • Unique Selling Proposition (USP): Your USP is a critical factor in making your business viable. It keeps your business ahead of the competition by highlighting what makes your product or service unique.

    • Stable Customer Base: To be viable, you must know who will buy your product or service. Research and identify your target audience.

    • Competitive Advantage: Even if your product is unique, consider your competitors. Understand who they are and how you can position your business effectively.

  3. Financial Stability: The second part of business viability involves having your financial house in order. Here are some aspects to focus on:

    • Cash Stability: Having enough assets (including cash and reserve funds) for day-to-day operations is crucial. Achieving cash stability takes time and requires frugality. Avoid overspending in anticipation of sales and refrain from taking too much out of the business.

    • Continual Financial Attention: Always stay aware of your business’s financial status. Use good financial software, regularly input business information, and analyze it against your goals for cash stability and other factors.

  4. Viability vs. Solvency:

    • Viability: A general assessment of whether a business is (or will be) successful. It considers both marketing and financial aspects.
    • Solvency: An assessment of whether a business has enough money to meet its financial obligations and debts.