Average time to build a business… (rant enclosed)
This post hits close to home. Coming across people, even friends who desire to build their own business, but don’t truly understand the costs of doing so. So, I thought it good to expose that information. That way, one has a real gauge of what they’re bringing to the table, what to expect, and are they on the right track? or have they even started?
This post is so crystal clear to me now; my frustration is not from running a business, my frustration to write this comes from me being invested in other’s success-
who truly, are less invested and less informed about the real truths of being entrepreneurs. And unfortunately, rather than take real hard step back and look at whether what they’re doing is wrong, right or misguided-
they just give up and leave you with that “failed feeling.” Like you’re the one not normal. Truth is-
they weren’t in the race or on the track to begin with. They refuse to go the distance.
My mistake for allowing this disruption in my world, I know better. If you’re partnering or building a team within your business, or just need support hitting close to home- you have to keep this truth near.
The Average Time to Reach Profitability in a Start Up Company
by Ellis Davidson, Demand Media
A rule of thumb for an entrepreneur says that in the first year of running his own business successfully, he will make less than his prior salary, as most of his profits will be reinvested in the business. In the second year, he can draw his regular salary. In the third and subsequent years, he can draw a larger salary–plus any proceeds from his ownership of the company if he sells shares or outright ownership. The actual time frame to company profitability is entirely dependent upon how much start-up capital is needed to create the products and services, and how much money is drawn from the company for compensation and investor servicing.
Typically it goes like this:
In the first year you lose money. Earlier on more than later in the year somewhere during the second year you break even. In the third year you finally make back all the money that you had to add in the first
The reason why it works this way is simple enough (even if that doesn’t explain the timing). Customer acquisition is a time consuming process…-Jacques Mattheij
Once you have enough money salted away to deal with unforeseen circumstances, economic dips and the like you can always fire your boss. But don’t do it too soon, or you will fail on the way to eventual success.
How much does it cost to start your own business?
Of course, the answer depends on your business model and your chosen industry. However, a useful estimate based on a 2009 study conducted by the Ewing Marion Kauffman Foundation puts the average cost of starting a new business from scratch at just over $30,000. -Caron_Beesley
So you’ve got what it takes to be an entrepreneur? Now, ask yourself these 20 questions to make sure you’re thinking about the right key business decisions…
Why am I starting a business?
What kind of business do I want?
Who is my ideal customer?
What products or services will my business provide?
Am I prepared to spend the time and money needed to get my business started?
What differentiates my business idea and the products or services I will provide from others in the market?
Where will my business be located?
How many employees will I need?
What types of suppliers do I need?
How much money do I need to get started?
Will I need to get a loan?
How soon will it take before my products or services are available?
How long do I have until I start making a profit?
Who is my competition?
How will I price my product compared to my competition?
How will I set up the legal structure of my business?
What taxes do I need to pay?
What kind of insurance do I need?
How will I manage my business?
How will I advertise my business?
Yours truly ventured out to own her own business as a sole proprietor, Fine Artist 13 years ago. It took 7 years just to get my art to a selling, professional level one would see in galleries. It took 4 years following that to “break even” on expenses between supplies, time, travel, show and gallery expenses.
I had no working “capital” to start with, really. I think when people start, they don’t even consider capital. They put an ultimatum out there, every dime they put in, they’d better get back immediately or it’s a failure. The business is not a failure – their mindset is not realistic.
One has to be in the trenches to even figure out what they’re doing, what works, what doesn’t to even make a judgement call. Only then, are they experienced to discern – before then, it’s premature.
This blog you see here, the learning curve of building it, monetizing it, finding my voice – 2 year investment.
So why, do I come across those discouraged after only a few months? Something is definitely a miss… what can anyone know in 2 months in building a business? It really is unrealistic.
Thankfully, there is now a system in place where if one does desire to build their business online, they don’t have a 2 year learning curve and wait as I did. They can begin a plug and play system already built and get started for $25, not 30K plus. That’s ridiculous. Click here to see.
I’ve paid much more than that to have the same tools available. Serious business building training, from mindset to marketing, advertising. Even at that, you’re not looking at liquid capital that a regular business would have you invest.
Friends, if you seriously want your own gig, you gotta work for it. If you don’t mind hard work, learning new things and being committed, continuing your education, you can have your own business. Is your dream worth it to you?
That’s what it comes down to.
To your Prosperity!
PS: Online Traffic will get you Leads, Leads will get you Sales, and Sales will get you Freedom. You can only click if you promise not to laugh!
If you enjoyed this work from home blog, Please retweet and comment on this Average time to build a business post.