Many factors go into creating a sustainable business. A company that can balance economic, environmental, and social considerations are more likely to achieve long-term success. While many business owners are focused on the economic part, it takes more than cash flow to make a positive impact. Learn how economic viability can help sustain more than just the bottom line.

What is Economic Viability

When creating a business plan, entrepreneurs tend to focus on setting a budget and marking short- and long-term financial goals. A big part of this plan should also involve measuring economic viability, or the ability to sustain financial stability over time. This includes generating revenue to cover upfront costs, ongoing costs, and remain in the black. Here are some of the key factors in making sure a plan is economically viable:

1. Cost-Benefit Analysis. During the planning stages, potential benefits are weighed against the costs of implementing and maintaining the project or business.
2. Profits. The company still makes money after covering all operational expenses, investments, and debt repayments.
3. Sustainability. Business plans adapt to changing economic conditions and market demands to remain profitable.

Not only is economic viability crucial to a business owner, but investors will also consider these factors before deciding where to put their money.

Other Factors with an Economic Impact

Economic viability helps sustain a business financially, but it can be affected by whether materials are sourced in an environmentally sustainable way. More consumers are looking for eco-friendly products and companies that prioritize sustainability and responsible practices. This can either motivate more customers to support an organization or not, which of course effects profits positively or negatively.

Companies that have a reputation for engaging in social programs and community initiatives tend to attract more loyal customers and can be more competitive in the marketplace. Doing good is good business, especially in these times when social media makes it easy to share feedback and recommendations.

Business owners looking to boost their economic viability shouldn’t take their eyes off the bottom line, but they should also consider these environmental and social platforms as a way to strengthen their foundation and build their customer base.