Economists are agreed that there are 3 types of viability that an entrepreneur needs to measure to ensure that their business idea has a fair chance of succeeding. These are technical viability, financial viability and market viability.
Technical viability
Assessment involves ensuring that the proposed products or services that will be offered meets the description by which they are marketed, serve the purpose for which they are designed and that samples of the product have shown that the product is safe or durable or that the service is practically deliverable. With either products or services, there are laws that one will have to pay special attention to, and which must not be breached. These laws will differ depending on the service or product that one is offering.
E.g. If you are proposing developing a new nutritional food for infants with HIV/AIDS, there are safety standards you have to ensure. These safety standards relate to packaging of products and safety standards relating to food products for infants. You must also ensure that the product actually contains the requisite nutritional value and boosts the immune system of those who take it as claimed.
E.g. if you are offering services as a transporter of goods to and from neighbouring states then you have to ensure your vehicle is properly licensed for that service, that you have the necessary permits to operate such a business, that you understand import and export laws and know which products are prohibited from being taken in and out of the country.
Financial viability
Assessment involves knowing how much money you will require to make your product or service available. Issues of money will obviously arise. You need to know where you will get capital or funds to expand your business. This means knowing what laws govern lending, what are permissible interest rates from Banks, what can you offer as collateral. You also need to start thinking of paying taxes and understanding what tax regimes apply to your kind of business or service.
Market viability
Involves assessing who the potential consumers of your product or services could be. If it is a product then you need to ensure if you are saying it is new then you have to show it is new. Some ideas may need to be patented or protected by trademarks or copyright. You will also need to be careful about not breaching laws of passing off when designing packaging so that your product is not too similar to, and may not be mistaken for, another existing brand that people already know and buy.
There are also many other legal issues you will need to pay attention to. If you are going to sign any contracts you need to pay attention to the terms of such contracts and agreements and know the laws that guide these agreements.
E.g. if you are buying your operational premises then you must make sure the premises are located in an area where the kind of business you want to conduct is permitted. You can’t buy land in a residential are to set up a factory that pollutes the environment.
E.g. If you are going to lease a property in an urban area, you cannot turn it into a cattle ranch without permission from the owner of the land and from the city council. Land is allocated for specific purposes depending on location and for certain activities, prior permission has to be secured to alter land use.
