Answer
May 16, 2022 - 07:44 AM
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It’s an open secret that countless startups fail yearly, 90% by the most gruesome estimates. But, just because building a solid business is difficult doesn't mean you shouldn’t follow where your passion leads.
We love that you’re curious about the viability of your drinks delivery business because confirming the viability of a business idea is a necessary step that every founder must take before investing the time and finances that launching their startup would require.
Let’s jump right in and examine some conditions that need to be met to show if your business is viable.
There’s a lot you’d have to do, but we’ll try to keep this as simple as possible.
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Concept Viability
To check how viable your idea of running a mobile drinks delivery would be, you’d need to answer the following questions:
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What is your business truly about?
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What unique value would your business be providing to customers?
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Is your business idea scalable?
Answering these questions will help you understand if your business idea is worth pursuing or not. The last thing you want is to waste your time setting up a business doomed to fail from the start.
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Technical Viability
Describe the various technical processes involved in the production process and the multiple tools that will be necessary to produce your product and services.
While assessing your business’s technical viability, pay attention to your:
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Business model
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Production process
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Fixed production costs
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Variable production costs
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Cost of product delivery
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Price of the finished product
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Market Viability
This is perhaps one of the most critical research you must perform because it’d give you access to critical information that’d help you know if your business is compatible with the market you’re targeting.
So ensure you:
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Research and understand your primary customers.
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Is there a strong market demand for your products
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Evaluate the size of your target market and prevailing trends.
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Conduct market research and customer surveys.
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Test your drinks and delivery services with some customers.
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Evaluate your competitors and their business model.
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Is your target niche already saturated?
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Choose an ideal marketing and distribution channel.
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Estimate your expected sales and market share within the first six months.
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Marketing Plan
Having a clear marketing plan is something you cannot afford to ignore when researching the viability of your business. Many startups with brilliant products fail because they don't market their products effectively.
Take time to:
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Identify and describe your brand’s marketing strategy in detail.
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Explain your brand’s unique selling proposition and competitive advantage
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How would you address marketing issues like sales strategy, pricing policy, distribution channels, customer care, etc.?
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Supply Plan
Do you have everything you need to start producing your craft beer? If not, how do you plan on getting access to supplies, critical raw ingredients, and equipment at reasonable prices? Also, what aspect of production do you want to produce yourself or outsource?
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Financing Plan
Most businesses struggle because they don't have access to steady funds. Conducting a thorough viability/feasibility test would make it easier to convince your friends, angel investors, venture capital firms, and other financiers to invest in your business.
To have a solid idea of the cost of starting your business, you need to:
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Estimate your business’s operating expenses.
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Develop short-term financial projections.
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Identify your break-even point.
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Prepare a thorough breakdown of your estimated cash flow, pro forma income statement, and balance sheet.
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Identify every potential source of capital and finance.
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Future Viability
Analyze your business idea and figure out its future viability. This way, you’d have a clear picture of what your business is hoping to grow into, how it will achieve it, and the possible products and industries it could be breaking into.
Start Your Business
Following these seven steps will help you know if you’re prepared to start a business and if your business will be viable. And if it is, go ahead and start setting up your business and building its brand identity.
Note: If your business’s brand seems too generic, that’s a clear sign that you’d need to rework it.
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