Financial viability is critical for several reasons:
1. Investor Confidence: Investors and lenders need to see that your business can generate sufficient returns to justify their investment. Demonstrating financial viability can help in securing funding.
2. Sustainability: A financially viable business can sustain itself in the long term, adapting to market changes and economic fluctuations without facing insolvency.
3. Growth Potential: Financially viable businesses have the resources to invest in growth opportunities, such as expanding product lines, entering new markets, or improving operational efficiency.
4. Risk Management: Understanding financial viability helps in identifying potential risks and developing strategies to mitigate them, ensuring business continuity.