DECA Sports and Entertainment Marketing Practice Exam

What does viability refer to in a business operation?

1. The potential for innovation

2. The ability to secure funding

3. The possibility of successful operation and profitability

4. The competition level in the market

The correct answer is: The possibility of successful operation and profitability

Viability in a business operation primarily refers to the possibility of successful operation and profitability. It encompasses the assessment of whether a business can sustain itself over the long term by generating enough revenue to cover its costs. A viable business model means that not only can the business operate efficiently, but it also has a pathway to profitability and the ability to succeed in its target market. This concept is crucial for new ventures, as it informs stakeholders, investors, and management about the prospects of the business. A viable business plan typically includes market analysis, financial projections, and an understanding of the competitive landscape, all of which contribute to determining the likelihood of achieving operational success and financial sustainability. While the potential for innovation, the ability to secure funding, and competition level in the market are all important considerations for a business, they do not define viability. Instead, they can be factors that influence whether a business can achieve its viability.