Many businesses start with a lot of enthusiasm and not a lot of viability.
Every day I hear stories of people who invest years (and thousands of dollars) into businesses that do not have a viable model. And this can men real trouble for your business, as you work hard but don’t see the results that you deserve.
You can turn things around by looking at how viable your business model is.
You have a viable business model when:
- Your product is clearly defined and scalable (you can produce/deliver considerably more of what you sell than you are now)
- Your market is clearly defined and you have enough customers who want / need your product to enable you to grow.
- You can make a profit
- You have some form of competitive advantage
Rating: How would you rate the viability of your business model (1 low / 5 high)?
If you rated yourself a 5, you believe that you have a viable business model. To ensure you’re on track conduct a SWOT (Strengths, Weaknesses, Opportunities and Threats) analysis, find relevant businesses and industries to benchmark against and create time for strategic planning.
And if you rated yourself 1 to 4, there are some tips below that will help you as you work on improving the viability of your model:
Viable Business Model Tips
If you need to develop a more viable business model:
- Research and study your industry and competition
- Develop a solid financial model for your business
- Seek out experienced financial advisors
- Clearly articulate your core value and competitive advantage
- Study other businesses similar to yours that are not in the same industry for lateral ideas
Case Study: Viable Business Model
Eat Fit Food is Australia’s leading health food home delivery business and Eat Fit Farm is a pristine retreat in Berrima, NSW, which produces natural fruit and vegetables for Sydney’s Eat Fit Food Kitchen.
Businesswomen’s Hall of Fame Inductee, Bianca Monley, started her business from her tiny kitchen in 2002 after identifying a gap in the food market in Sydney.
She could identify with time-poor families with busy lifestyles who were succumbing to fast-food binges rather than eating a variety of healthy wholefoods. So she set about creating a business that delivered healthy meals to people’s doors.
As an early adopter, she was in a prime position as the health food boom really took hold in Sydney and now she has a thriving business with a real competitive advantage (and an enviable client base that includes Hugh Jackman, Turia Pitt, Delta Goodrem, Miranda Kerr and Michael Klim, to name a few).
Bianca’s tips for success when it comes to creating a Viable
- Work out your long term goals. Write them down. They need to have a synergy so every minute of every day you are working towards one big goal
- Make a business plan and know what you are up for from the start
- Always over-estimate expenses and underestimate revenues
- Get cash flowing as soon as possible. Cashflow is the lifeline of your business. Grow as much as the cashflow allows.
- Stay true to your passion!