How Long Does It Take for a Start-Up to Earn Profits?

If you have an entrepreneurial mindset and if you intend to start a venture, you may have this question in your mind. The question is - How long will it take for my start-up to make profits? Let us find out. But before that, let us see if a start-up can make a profit or if it may also end up as a failure as several other start-ups do.

When you launch a company, you may do so only after you conceive an idea. But is an idea enough for making profits in your new venture? The answer is obviously in the negative. Unless your idea is saleable, it is impossible to make money out of it. Of course, if your idea is saleable and if you break even, there may not be any look-backs. By now, you may have become aware of the ways to grow your company and increase your revenues. 

But the real question is when a start-up can make profits. According to a few experts, every industry or field is different and every company operating in an industry is unique as well. So, it may not be possible to clearly say when a start-up will start making profits. It depends upon the field as well as the financial wherewithal of the company. But conventional-minded experts opine that a start-up can take between two and three years for making profits. But they hasten to add that it is wrong to assume that a new venture is not doing well just because it is not making profits during the initial years. 

You may have seen a few ventures making profits within six months after their launch. This may certainly enthuse you but at the same time, you should not ignore the fact there are several new companies struggling for years to earn profits and to pay their bills. The point you, as an ambitious start-up owner, should bear in mind is that you should have the capability and the financial muscle to survive until your firm begins making profits.

This means you should face up the reality and be prepared with a survival plan so that you do not face any difficulties during the period when you are not earning profits. The following few tips may help.

1. Have a workable survival plan.

2. Be ready with cash flow forecasts so that you can plan ahead for all types of eventualities. 

3. Do not hesitate to seek the help of experts for surmounting the difficulties you may face during such periods.

A survey conducted reveals that over 50% of start-ups survive until they complete four years. According to the same survey, the failure rate of start-ups at the 4-year point is around 44%.

How can you avoid the failure of your start-up company?

1. Keep studying the requirements of your customers on a constant basis and always strive to fulfill their needs.

2. Develop relationships with your customers.

3. Find out your USP and build on it.

4. Do near-perfect calculations of your expenses and income and plan your finances accordingly. 

5. Have the right types of employees.

6. Develop leadership skills in your employees.

These tips will help you not only in sustaining in your field but in your efforts to earn profits consistently as well.