What signs that a business is viable when starting it?

[Guest125474]

I want to know what numbers and signs should I focus on that tells me that this business is viable after starting it.

 

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[Kevin88660]

I want to know what numbers and signs should I focus on that tells me that this business is viable after starting it.

If you are not the first one in the world doing it and there have been many others who have done it before, of course it is viable even before you start it, for older industries not doing super innovative things.

Sales cures all. As the saying goes if people are paying you that’s quite a solid proof for an original idea.

 

[Devilery]

The best sign is sales. Sure, there are a few business models/concepts that don't generate money from day one (require time to build and launch), but generally, what's a better way than getting paid for what your business offers? A business has to make money, if it doesn't, there's no business.

If you're building something really complex that takes time to even try selling something, try building a "lighter" version first and try to "sell" that.

 

[Johnny boy]

That is different for every business.

My company mows lawns. Here’s some things I watch for and want to ‘prove’.

1. Can we get customers to sign up at X price?
2. Can we get employees to get the work done in Y amount of time?
3. Can we find these employees and keep them and pay them Z amount?
4. Can we acquire customers with paying less than W for each one with advertising

If I can hit good numbers, I have proven it to be viable. You must be able to get customers, and at a good price, and at a good acquisition cost, and get the work done, with certain efficiency metrics, and then you have a working ‘model’.

 

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[NervesOfSteel]

I want to know what numbers and signs should I focus on that tells me that this business is viable after starting it.

1. Profit: If your Net profit from retail/D2C is above 25%.
2. Growth in sales: You should see a sales rise periodically!
3. Retention: Your repeat customers are your backbone. It should be more than 50%.

 

[NervesOfSteel]

That is different for every business.

My company mows lawns. Here’s some things I watch for and want to ‘prove’.

1. Can we get customers to sign up at X price?
2. Can we get employees to get the work done in Y amount of time?
3. Can we find these employees and keep them and pay them Z amount?
4. Can we acquire customers with paying less than W for each one with advertising

If I can hit good numbers, I have proven it to be viable. You must be able to get customers, and at a good price, and at a good acquisition cost, and get the work done, with certain efficiency metrics, and then you have a working ‘model’.

The X:Y:Z: W ratio plays a major role! The percentages and ratios are the key. What are your target ratios?

 

[Johnny boy]

The X:Y:Z: W ratio plays a major role! The percentages and ratios are the key. What are your target ratios?

We need to be charging people around $1200 a year, if they are getting 20 visits that take 25 minutes. (145/hr)

We need to get 10k a month per worker in revenue

We need to be able to have $23/hr workers show up reliably and get work done that customers approve of.

We need to acquire customers for $150 in ad spend each, or cheaper.

We need Johnny Boy to spend a few months in Mexico every year to enjoy the sun in the winter months.

 

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[NervesOfSteel]

We need to get 10k a month per worker in revenue

We need to be able to have $23/hr workers show up reliably and get work done that customers approve of.

above 50%! Great!

We need Johnny Boy to spend a few months in Mexico every year to enjoy the sun in the winter months.

Business trips are an expense ... and we should save on taxes!

 

[Johnny boy]

above 50%! Great!





Business trips are an expense ... and we should save on taxes!

Never really liked taxes. Didn’t see the point. Just stopped paying.