Is your business idea viable?

Viability of a business can simply be defined as the ability to survive financially in a longer run and have sustainable profits. Many ideas of products and services might seem to deliver a great end consumer value and also be interesting to implement. However along with the delivery of a great consumer value, the profitability of the company in a longer run is ‘the important factor’ that keeps the show running. As an entrepreneur, before taking the plunge, it is highly recommended to perform the below viability checks to know for yourself if your idea is going to make you money or not.

Define your product/service 

• Define to yourself clearly what you are delivering. 
• Is it a product or a service? 
• What would be the features of the product or the package of services 

Define your ideal customer and market. 

• Know who your customers are 
• Know what they really want 
• Know how many such customers are there in the market (market size) 
• Is there any competition in the market? 
• If YES, how many competitors are there? Who are the big players? How is the market shared among the competitors? 
• If NO, try to see why hasn't anyone started such a business that you’re coming up with. Know what would have stopped anyone from starting up? 
• How are your competitors offering their products and services? 
• At what price are they offering them? 
• What can you do to penetrate and counter competition? 
• At what price should you be selling your product or service to counter competition and be able to sustain? 

Demand Analysis 

• Why should you do this? 
• So that you don’t end up setting up a company that sells a product or service that no one wants or very less people want. 
• Demand analysis is a very crucial activity. You should know if there is any demand for your product/service. If yes how much? 
• Reach out to a sample size of your target customers and conduct a primary research about the customers’ interest on your offering. 
• Try to know how much they would be willing to pay for such an offering. 
• Factor your findings from the sample size audience to the whole market and know the real demand. 
• Once you know the real demand, you must be able to comprehend what kind of a demand your product has. 
• Below are the various kinds of demands. 
• Full demand – A positive sign to you, where the customers are happy about your product and they want to buy from you.
• Overfull demand – Your offering has huge demand, many customers want to buy it and you won’t able to supply as much.
• Declining Demand – There is demand at the moment for your offering but the same might go down slowly.
• Negative Demand – Your product might be beneficial to the customer but her still doesn't want to buy it. E.g. Insurance
• Unwholesome Demand – This kind of demand is when your product is not useful/beneficial for the customer but still wants it. E.g. Cigarettes
• Irregular demand – Your product might be useful only at a given point of time in a period. In other words the requirement is seasonal. E.g. Umbrellas.
• Latent demand – The customer might not understand the usage and importance of your product while making the buying decision, but might feel the importance after he has purchased a different product/service. E.g. Normal mobile vs Smartphone. 

Once you have done all the above activities, you would have a clear answer to the question “Is your idea viable?” and you would able to make a conscious decision in moving forward with your idea.