Business feasibility analysis: Analyzing Financial Viability: A Crucial Aspect of Business Feasibility

1. What is business feasibility analysis and why is it important?

Before launching a new business venture or expanding an existing one, it is essential to assess its feasibility from various angles. One of the most important aspects of feasibility analysis is financial viability, which evaluates whether the proposed business idea can generate enough revenue to cover its costs and provide a satisfactory return on investment. financial viability analysis also helps to identify the sources and amounts of funding required, the break-even point, the projected cash flow, and the sensitivity of the business to changes in market conditions.

There are several steps involved in conducting a financial viability analysis for a business idea. Some of the main ones are:

1. estimating the startup costs: This includes the expenses incurred before the business begins its operations, such as market research, legal fees, licenses, equipment, inventory, etc. These costs should be realistic and based on reliable data.

2. Estimating the operating costs: This includes the ongoing expenses of running the business, such as salaries, rent, utilities, maintenance, marketing, taxes, etc. These costs should be estimated for at least the first year of operation and adjusted for inflation and growth.

3. Estimating the revenue: This includes the income generated by the business from selling its products or services. The revenue should be based on the expected sales volume, price, and market share of the business. The revenue should also account for seasonal variations, discounts, and customer retention.

4. Calculating the profitability: This involves subtracting the total costs from the total revenue to obtain the net income or profit of the business. The profitability can be expressed as a percentage of the revenue (profit margin) or as a ratio of the profit to the investment (return on investment). The profitability should be compared with the industry average and the expectations of the investors.

5. conducting a break-even analysis: This determines the minimum level of sales that the business needs to achieve to cover its costs and make zero profit. The break-even point can be calculated by dividing the fixed costs by the contribution margin (the difference between the price and the variable cost per unit). The break-even analysis helps to evaluate the risk and viability of the business idea.

6. preparing a cash flow statement: This shows the inflows and outflows of cash for the business over a period of time, usually a month or a year. The cash flow statement helps to assess the liquidity and solvency of the business, as well as its ability to meet its financial obligations and invest in growth opportunities.

7. performing a sensitivity analysis: This involves testing how the financial viability of the business changes under different scenarios, such as changes in the market demand, the price, the costs, the interest rate, the exchange rate, etc. The sensitivity analysis helps to identify the key drivers and assumptions of the business idea, as well as the potential risks and opportunities.

An example of a financial viability analysis for a hypothetical business idea is given below:

- The business idea is to open a coffee shop in a busy downtown area.

- The startup costs are estimated to be $100,000, which include $50,000 for leasing and renovating the premises, $30,000 for buying the equipment and furniture, $10,000 for stocking the inventory, and $10,000 for other expenses such as legal fees, licenses, etc.

- The operating costs are estimated to be $15,000 per month, which include $8,000 for salaries, $3,000 for rent, $1,000 for utilities, $1,000 for maintenance, $1,000 for marketing, and $1,000 for taxes.

- The revenue is estimated to be $25,000 per month, based on the assumption that the coffee shop will sell 1,000 cups of coffee per day at an average price of $2.50, and 500 snacks per day at an average price of $5.00. The market share of the coffee shop is assumed to be 10% of the total coffee consumption in the area.

- The profitability is calculated to be $10,000 per month, which is 40% of the revenue (profit margin) or 120% of the investment (return on investment) per year.

- The break-even point is calculated to be 666 cups of coffee per day, or $1,665 of revenue per day, which means that the coffee shop needs to sell at least this amount to cover its costs and make zero profit.

- The cash flow statement shows that the coffee shop will have a positive cash flow of $5,000 per month, after paying back a loan of $5,000 per month for the startup costs. The loan has an interest rate of 10% per year and a repayment period of 24 months. The cash flow statement also shows that the coffee shop will have enough cash to pay its bills and invest in growth opportunities.

- The sensitivity analysis shows that the financial viability of the coffee shop is sensitive to changes in the price, the sales volume, and the market share. For example, if the price of coffee increases by 10%, the profit margin increases by 6.7%. If the sales volume decreases by 10%, the profit margin decreases by 4%. If the market share decreases by 10%, the profit margin decreases by 3.3%.

2. What is it and how to measure it?

One of the most important aspects of business feasibility is to assess whether the proposed venture can generate enough revenue to cover its costs and provide a satisfactory return to its investors. This is known as financial viability, and it involves estimating the potential income and expenses of the business, as well as the sources and uses of funds. Financial viability is crucial for any business, as it determines its ability to survive and grow in the long run.

There are several methods and tools to measure the financial viability of a business idea, such as:

- Break-even analysis: This is a technique that calculates the minimum level of sales or output that the business needs to achieve in order to cover its fixed and variable costs. The break-even point is the point where the total revenue equals the total cost, and the business makes neither profit nor loss. break-even analysis can help the entrepreneur to determine the feasibility of the business idea, as well as to set the optimal price and production level. For example, if a business has fixed costs of $10,000 per month, variable costs of $5 per unit, and sells its product for $10 per unit, then the break-even point is 2,000 units per month. This means that the business needs to sell at least 2,000 units per month to avoid losses.

- cash flow projection: This is a forecast of the expected inflows and outflows of cash for the business over a certain period of time, usually one year. cash flow projection can help the entrepreneur to estimate the amount of money that the business will need to start and operate, as well as to identify the potential sources and timing of cash receipts and payments. Cash flow projection can also help the entrepreneur to evaluate the liquidity and solvency of the business, as well as to plan for contingencies and emergencies. For example, a cash flow projection can show that the business will have a positive cash flow of $20,000 in the first quarter, but a negative cash flow of $15,000 in the second quarter, due to seasonal fluctuations in sales and expenses. This means that the business will need to secure a short-term loan or line of credit to cover the cash shortfall in the second quarter.

- Financial ratios: These are numerical indicators that measure the performance and health of the business in terms of profitability, efficiency, liquidity, solvency, and growth. Financial ratios can help the entrepreneur to compare the business with its competitors and industry standards, as well as to identify the strengths and weaknesses of the business. Financial ratios can be calculated from the income statement, balance sheet, and cash flow statement of the business. For example, some common financial ratios are:

- Gross profit margin: This is the percentage of revenue that the business retains after deducting the cost of goods sold. It measures the profitability of the business before accounting for other expenses. A high gross profit margin indicates that the business has a strong competitive advantage and can charge a premium price for its products or services. For example, if a business has revenue of $100,000 and cost of goods sold of $60,000, then the gross profit margin is 40%.

- net profit margin: This is the percentage of revenue that the business retains after deducting all expenses, including taxes and interest. It measures the profitability of the business after accounting for all costs. A high net profit margin indicates that the business is efficient and well-managed. For example, if a business has revenue of $100,000 and net income of $10,000, then the net profit margin is 10%.

- Current ratio: This is the ratio of current assets to current liabilities. It measures the liquidity of the business, or its ability to meet its short-term obligations. A current ratio of at least 1 indicates that the business has enough current assets to pay its current liabilities. For example, if a business has current assets of $50,000 and current liabilities of $40,000, then the current ratio is 1.25.

- debt-to-equity ratio: This is the ratio of total debt to total equity. It measures the solvency of the business, or its ability to meet its long-term obligations. A low debt-to-equity ratio indicates that the business has a low level of leverage and relies more on equity financing than debt financing. For example, if a business has total debt of $30,000 and total equity of $70,000, then the debt-to-equity ratio is 0.43.

3. Revenue, costs, profit, cash flow, and break-even point

One of the most important aspects of business feasibility is analyzing the financial viability of the proposed venture. This involves assessing the key financial indicators that reflect the potential performance and sustainability of the business. These indicators are:

1. Revenue: This is the amount of money that the business earns from selling its products or services to its customers. Revenue is influenced by factors such as market size, demand, pricing, and sales strategy. A business should aim to generate enough revenue to cover its costs and achieve its profit goals.

2. Costs: These are the expenses that the business incurs to produce and deliver its products or services. Costs can be classified into fixed costs and variable costs. Fixed costs are those that do not change with the level of output, such as rent, salaries, and depreciation. Variable costs are those that vary with the level of output, such as raw materials, utilities, and commissions. A business should aim to minimize its costs while maintaining quality and efficiency.

3. Profit: This is the difference between revenue and costs. Profit measures the financial return that the business earns from its operations. Profit can be expressed as a percentage of revenue, known as profit margin, or as a percentage of the initial investment, known as return on investment. A business should aim to maximize its profit by increasing revenue and reducing costs.

4. Cash flow: This is the movement of money in and out of the business. Cash flow is influenced by factors such as revenue, costs, payment terms, inventory, and capital expenditures. A positive cash flow means that the business has more money coming in than going out, which enables it to meet its financial obligations and invest in growth. A negative cash flow means that the business has more money going out than coming in, which may lead to liquidity problems and insolvency. A business should aim to maintain a positive and stable cash flow by managing its working capital and cash cycle.

5. Break-even point: This is the level of output or sales at which the business earns zero profit, meaning that its revenue is equal to its costs. Break-even point is calculated by dividing the fixed costs by the contribution margin, which is the difference between the selling price and the variable cost per unit. Break-even point indicates the minimum amount of output or sales that the business needs to achieve to avoid losses. A business should aim to reach its break-even point as soon as possible and then surpass it to generate profit.

To illustrate these concepts, let us consider a hypothetical example of a business that sells handmade candles. The business has the following financial data:

- Selling price per candle: $10

- Variable cost per candle: $4

- Fixed costs per month: $2,000

- Initial investment: $10,000

Using these data, we can calculate the key financial indicators as follows:

- Revenue per month: $10 x number of candles sold

- Costs per month: $4 x number of candles sold + $2,000

- Profit per month: Revenue - Costs

- Profit margin: Profit / Revenue

- Return on investment: Profit / Investment

- Cash flow per month: Revenue - costs - Capital expenditures

- Break-even point: $2,000 / ($10 - $4) = 500 candles

Based on these calculations, we can see that the business needs to sell at least 500 candles per month to break even, and any additional sales will generate profit. For example, if the business sells 1,000 candles per month, its profit will be $6,000, its profit margin will be 60%, and its return on investment will be 60%. However, if the business sells only 300 candles per month, its loss will be $800, its profit margin will be -26.67%, and its return on investment will be -8%. Therefore, the business should evaluate its market potential, demand, pricing, and sales strategy to ensure that it can achieve its revenue and profit targets. Moreover, the business should monitor its cash flow to ensure that it can pay its bills and invest in growth. For example, if the business needs to buy new equipment for $5,000, it will have a negative cash flow of -$1,000 in the month of purchase, which means that it will need to borrow money or use its savings to cover the shortfall.

By analyzing these key financial indicators, the business can determine the financial viability of its venture and make informed decisions about its feasibility.

4. How to create realistic and reliable forecasts for your business?

One of the most important aspects of business feasibility is analyzing the financial viability of your proposed venture. This involves creating realistic and reliable forecasts for your revenue, expenses, cash flow, and profitability. Financial projections help you assess the potential return on investment, the break-even point, the funding requirements, and the risks involved in your business idea. They also help you communicate your vision and goals to potential investors, partners, and stakeholders.

To create effective financial projections, you need to follow some steps and principles. Here are some of them:

1. Define the scope and time frame of your projections. Depending on the nature and stage of your business, you may need to project your financial performance for different periods, such as monthly, quarterly, or annually. You also need to decide how far into the future you want to forecast, such as one year, three years, or five years. Generally, the longer the time frame, the more uncertain and conservative your projections should be.

2. Gather relevant data and information. You need to collect and analyze data from various sources, such as market research, industry reports, competitor analysis, historical financial statements, and customer feedback. This will help you estimate the key drivers and assumptions of your revenue and expenses, such as market size, market share, pricing, unit sales, cost of goods sold, operating expenses, taxes, and depreciation.

3. build a financial model. A financial model is a tool that helps you organize and calculate your financial projections. It typically consists of three main components: an income statement, a balance sheet, and a cash flow statement. These statements show how your revenue and expenses affect your net income, assets, liabilities, and cash flow over time. You can use spreadsheet software, such as Excel, to create your financial model, or you can use online tools, such as Copilot, to generate one for you.

4. Validate and adjust your projections. Once you have your financial model, you need to check its accuracy and reliability. You can do this by comparing your projections with historical data, industry benchmarks, and best practices. You can also perform sensitivity analysis, scenario analysis, and risk analysis to test how your projections change under different conditions and assumptions. Based on the results, you can adjust your projections to make them more realistic and attainable.

5. Present and communicate your projections. The final step is to present and communicate your projections to your intended audience, such as investors, lenders, or partners. You need to prepare a clear and concise summary of your projections, highlighting the key figures and metrics, such as revenue growth, profit margin, return on investment, and break-even point. You also need to explain the underlying assumptions and drivers of your projections, and how they align with your business goals and strategies. You can use charts, graphs, tables, and dashboards to visualize your projections and make them easier to understand.

5. How to test the impact of different scenarios and assumptions on your financial viability?

One of the most important aspects of analyzing financial viability is to assess how sensitive your business outcomes are to changes in various factors and assumptions. This is known as sensitivity analysis, and it can help you identify the key drivers of your profitability, cash flow, and return on investment. sensitivity analysis can also help you test the impact of different scenarios and uncertainties on your financial performance and feasibility.

There are several steps involved in conducting a sensitivity analysis for your business feasibility. Here are some of them:

1. Identify the variables that affect your financial projections, such as sales volume, price, cost, interest rate, inflation rate, exchange rate, etc. You can use historical data, market research, industry benchmarks, or expert opinions to estimate the values and ranges of these variables.

2. Build a base case scenario that reflects your most realistic and likely assumptions for each variable. You can use a spreadsheet or a financial model to calculate your key financial indicators, such as net income, cash flow, break-even point, payback period, net present value, internal rate of return, etc. Based on the base case scenario.

3. Perform a one-way sensitivity analysis by changing one variable at a time and observing how it affects your key financial indicators. You can use a sensitivity table or a chart to display the results. For example, you can show how your net income changes when you vary your sales volume from 80% to 120% of the base case value, holding all other variables constant.

4. Perform a two-way or multi-way sensitivity analysis by changing two or more variables simultaneously and observing how they affect your key financial indicators. You can use a scenario table or a chart to display the results. For example, you can show how your net income changes when you vary your sales volume and price by +/- 10% of the base case values, holding all other variables constant.

5. Interpret the results of your sensitivity analysis and draw conclusions about your financial viability and feasibility. You can use the following criteria to evaluate your results:

- If your key financial indicators are stable and robust across a wide range of values and scenarios, it means that your business is financially viable and feasible, and that you have a low risk of failure or loss.

- If your key financial indicators are sensitive and volatile across a narrow range of values and scenarios, it means that your business is financially vulnerable and uncertain, and that you have a high risk of failure or loss.

- If your key financial indicators are sensitive and volatile across a wide range of values and scenarios, it means that your business is financially unpredictable and complex, and that you have a mixed or unknown risk of failure or loss.

To illustrate the concept of sensitivity analysis, let us consider a simple example of a business that sells widgets. The base case scenario for this business is as follows:

- Sales volume: 10,000 units per year

- Price: $50 per unit

- Variable cost: $30 per unit

- Fixed cost: $100,000 per year

- Interest rate: 10% per year

- Inflation rate: 2% per year

Based on these assumptions, the key financial indicators for this business are:

- Net income: $100,000 per year

- Cash flow: $200,000 per year

- Break-even point: 4,000 units per year

- Payback period: 1 year

- Net present value: $636,943

- Internal rate of return: 100%

Now, let us perform a one-way sensitivity analysis by changing the sales volume from 8,000 to 12,000 units per year, holding all other variables constant. The results are shown in the table below:

| Sales volume | net income | Cash flow | Break-even point | Payback period | Net present value | Internal rate of return |

| 8,000 | $60,000 | $160,000 | 4,000 | 1.25 | $476,190 | 76% | | 9,000 | $80,000 | $180,000 | 4,000 | 1.11 | $556,567 | 88% | | 10,000 | $100,000 | $200,000 | 4,000 | 1 | $636,943 | 100% | | 11,000 | $120,000 | $220,000 | 4,000 | 0.91 | $717,320 | 112% | | 12,000 | $140,000 | $240,000 | 4,000 | 0.83 | $797,697 | 124% |

We can see that the net income, cash flow, net present value, and internal rate of return increase linearly with the sales volume, while the break-even point and payback period remain constant. This means that the business is more profitable and feasible when the sales volume is higher, and that the sales volume is a key driver of the financial performance and feasibility.

We can also plot the net income and the internal rate of return as functions of the sales volume, as shown in the chart below:

![Sensitivity chart](https://i.imgur.com/1j6XV4f.

6. How to identify and mitigate the potential risks and uncertainties that could affect your financial viability?

One of the most important aspects of business feasibility is analyzing the financial viability of your proposed venture. This involves identifying and mitigating the potential risks and uncertainties that could affect your ability to generate revenue, cover costs, and achieve profitability. risk analysis is a systematic process of assessing the likelihood and impact of various events or scenarios that could threaten your financial performance or sustainability. By conducting a thorough risk analysis, you can:

- Identify the sources and types of risks that your business may face, such as market, operational, financial, legal, or environmental risks.

- Estimate the probability and severity of each risk, using quantitative or qualitative methods, such as historical data, expert opinions, or scenario analysis.

- Evaluate the potential consequences of each risk, such as reduced sales, increased expenses, delayed cash flows, or legal liabilities.

- Develop strategies to mitigate or manage each risk, such as diversifying your income streams, reducing your fixed costs, securing insurance, or complying with regulations.

To conduct a comprehensive risk analysis, you can follow these steps:

1. Define the scope and objectives of your risk analysis. Determine what aspects of your financial viability you want to analyze, such as your revenue model, cost structure, cash flow projections, or break-even point. Also, define the time horizon and the level of detail for your analysis, such as monthly, quarterly, or yearly projections, or best-case, worst-case, or expected scenarios.

2. Identify the potential risks that could affect your financial viability. Brainstorm and list all the possible events or situations that could negatively impact your financial performance or sustainability. You can use various tools or frameworks, such as SWOT analysis, PESTEL analysis, or Porter's five forces analysis, to identify the internal and external factors that could pose a risk to your business. For example, some of the potential risks that could affect your financial viability are:

- Market risks: These are the risks related to the demand and supply of your products or services, such as changes in customer preferences, competition, pricing, or market size.

- Operational risks: These are the risks related to the production and delivery of your products or services, such as equipment failures, quality issues, supply chain disruptions, or labor shortages.

- Financial risks: These are the risks related to the management and allocation of your financial resources, such as cash flow problems, credit risks, currency fluctuations, or interest rate changes.

- Legal risks: These are the risks related to the compliance and protection of your business, such as lawsuits, regulatory changes, intellectual property rights, or contractual obligations.

- environmental risks: These are the risks related to the impact of your business on the natural environment, such as pollution, climate change, natural disasters, or resource depletion.

3. Analyze the likelihood and impact of each risk. For each risk that you have identified, estimate how likely it is to occur and how severe its consequences would be for your financial viability. You can use various methods or techniques, such as probability distributions, sensitivity analysis, or monte Carlo simulation, to quantify or qualify the likelihood and impact of each risk. You can also use a risk matrix or a risk map to visualize and compare the relative importance of each risk. For example, a risk matrix could look like this:

| Impact | High | Medium | Low |

| High | Market size decline | supply chain disruption | Quality issue |

| Medium | Competition increase | Currency fluctuation | Regulatory change |

| Low | Customer preference change | Interest rate change | Equipment failure |

4. Develop strategies to mitigate or manage each risk. For each risk that you have analyzed, devise a plan or a course of action to reduce its likelihood or impact, or to cope with its consequences. You can use various strategies or tactics, such as risk avoidance, risk reduction, risk transfer, or risk acceptance, to mitigate or manage each risk. You can also use a risk register or a risk action plan to document and monitor your risk mitigation or management activities. For example, a risk action plan could look like this:

| Risk | Strategy | Action | Responsible | Deadline |

| Market size decline | Risk reduction | conduct market research and adjust product features or pricing accordingly | Marketing manager | 31/03/2024 |

| Supply chain disruption | Risk transfer | Secure contracts with multiple suppliers and ensure adequate inventory levels | Operations manager | 30/04/2024 |

| Quality issue | Risk acceptance | implement quality control measures and allocate a contingency fund for potential refunds or repairs | Production manager | 30/06/2024 |

By following these steps, you can conduct a comprehensive risk analysis and ensure that your business is financially viable and sustainable. risk analysis is not a one-time activity, but a continuous process that requires regular review and update. By identifying and mitigating the potential risks and uncertainties that could affect your financial viability, you can increase your chances of success and growth.

7. How to explore and evaluate different sources of financing for your business?

One of the most important aspects of analyzing the financial viability of your business is to explore and evaluate different sources of financing that can help you start, grow, or sustain your venture. Financing is the process of obtaining funds from external sources, such as investors, lenders, or donors, to support your business activities. Depending on your business goals, needs, and stage of development, you may opt for different types of financing, each with its own advantages and disadvantages. Some of the common sources of financing are:

1. Bootstrapping: This is the process of using your own personal savings, assets, or income to fund your business. bootstrapping can be a viable option for businesses that have low initial costs, high profit margins, or do not require a lot of capital to operate. Bootstrapping can help you retain full ownership and control of your business, avoid debt or dilution, and demonstrate your commitment and credibility to potential investors or partners. However, bootstrapping also has some drawbacks, such as limiting your growth potential, increasing your personal risk, and reducing your liquidity and flexibility.

2. Debt financing: This is the process of borrowing money from a lender, such as a bank, a credit union, or a microfinance institution, to fund your business. Debt financing can be a suitable option for businesses that have a steady cash flow, a solid business plan, or a proven track record. Debt financing can help you access large amounts of capital, maintain your ownership and control, and benefit from tax deductions on interest payments. However, debt financing also has some challenges, such as requiring collateral or guarantees, imposing repayment obligations and interest charges, and affecting your credit score and future borrowing capacity.

3. Equity financing: This is the process of selling a portion of your ownership or shares in your business to an investor, such as an angel investor, a venture capitalist, or a crowdfunding platform, to fund your business. Equity financing can be an attractive option for businesses that have high growth potential, innovative products or services, or a scalable business model. equity financing can help you raise substantial amounts of capital, leverage the expertise and network of your investors, and reduce your debt burden and cash flow pressure. However, equity financing also has some trade-offs, such as diluting your ownership and control, sharing your profits and decision-making, and complying with the terms and conditions of your investors.

4. Grants and subsidies: These are the funds that you receive from a government agency, a non-governmental organization, or a private foundation, to fund your business. Grants and subsidies can be a valuable source of financing for businesses that have a social or environmental impact, a research or innovation focus, or a niche or underserved market. Grants and subsidies can help you obtain non-repayable and non-dilutive funds, enhance your reputation and visibility, and access other resources and opportunities. However, grants and subsidies also have some limitations, such as being highly competitive and selective, having strict eligibility and reporting requirements, and being subject to changes and uncertainties.

These are some of the main sources of financing that you can explore and evaluate for your business. However, you should also consider other factors, such as the cost and availability of financing, the suitability and compatibility of financing, and the timing and sequencing of financing, when making your financing decisions. Ultimately, the best source of financing for your business depends on your unique situation and goals. Therefore, you should conduct a thorough financial analysis and feasibility study, and consult with financial experts and advisors, before choosing your financing options.

8. How to use financial viability analysis to make informed and confident decisions for your business?

After exploring the various aspects of financial viability analysis, such as the break-even point, the cash flow projection, the income statement, and the balance sheet, you may wonder how to apply this knowledge to your own business idea. How can you use financial viability analysis to make informed and confident decisions for your business? Here are some tips and suggestions:

- Use financial viability analysis as a tool, not a goal. Financial viability analysis is not an end in itself, but a means to an end. It helps you evaluate the potential profitability and sustainability of your business idea, but it does not guarantee success or failure. You still need to consider other factors, such as the market demand, the competitive advantage, the customer feedback, and the legal and ethical implications of your business.

- Be realistic and conservative in your assumptions and projections. Financial viability analysis is based on assumptions and estimates, which may or may not reflect the actual situation. To avoid overestimating your revenue or underestimating your expenses, you should be realistic and conservative in your assumptions and projections. Use reliable sources of data, such as industry reports, market research, and historical records, to support your assumptions. Also, include a margin of error or a contingency fund in your projections to account for unexpected events or changes in the market.

- Compare different scenarios and alternatives. Financial viability analysis can help you compare different scenarios and alternatives for your business idea, such as different pricing strategies, marketing channels, production methods, or financing options. By doing so, you can identify the most optimal and feasible scenario or alternative for your business, as well as the risks and opportunities associated with each option. You can also use sensitivity analysis to test how your financial viability would change if one or more variables change, such as the sales volume, the unit cost, or the interest rate.

- Review and update your financial viability analysis regularly. Financial viability analysis is not a one-time exercise, but a continuous process. You should review and update your financial viability analysis regularly, especially when there are significant changes in your business environment, such as new competitors, new regulations, new technologies, or new customer preferences. By doing so, you can monitor your financial performance, identify any gaps or deviations from your plan, and make timely adjustments or corrections to your business strategy.

By following these tips and suggestions, you can use financial viability analysis to make informed and confident decisions for your business. Financial viability analysis can help you assess the feasibility of your business idea, identify the strengths and weaknesses of your business model, and plan for the future growth and development of your business. However, remember that financial viability analysis is not a substitute for your creativity, intuition, and passion. You still need to have a clear vision, a unique value proposition, and a strong commitment to your business idea. Financial viability analysis is just one of the many tools that can help you turn your idea into reality.