Today . . . I am thinking about how long it take for start-ups to make a profit. Just about every client I've ever worked with asks me some version of this question. Most recently, one of our readers submitted a question asking, "How can I get from start-up to profit in less that one year?"
The traditional answer is: you probably won't see sustainable profit for five years.
The optimistic answer is: it takes between 2-3 years to see sustained growth profit.
For most accidental pren-hers starting up a business, the answer lies somewhere in between. And the following three points are important to keep in mind:
- When talking about the success of a start up, slow and steady has a much better chance of winning the race.
- Startups always take more time and money then expected. Once the business is up and running, plan on a one year roller-coaster adjustment period. This is the time when most new business owners throw in the towel. Don’t!
- If, however, you manage to make it past the two-year mark, what I call the terrible twos, you can expect to see some stabilization and growth. From this vantage point, you can begin focusing on how to sustain that growth and project profits.
In March, the Washington Post addressed this issue in, Not Making a Profit in Your Start-Up? You're Not Alone by analyzing newly released data from the Kauffman Foundation. Several years ago, Entrepreneur Magazine put forth their business startup timeline and wrote an informative five-part series that is well worth the read. Charting Your Business Timeline offers accidental entrepreneurs both a general overview of the the life of a new business and helpful tools to ensure its success.
Entrepreneur Magazine's Guide to Business Timeline
- Year 1: Starting Up
- Years 2 to 5: Time to Grow
- Years 5 to 10: Growing to the Next Level
- Years 10 to Retirement: Managing Maturity
- Moving On: Exit Strategies
Where are you in your business timeline? Did it take you longer or shorter to create a sustainable profit than you originally thought? What were some of your keys to making that happen? Leave a comment and let us know!
Susan L. Reid
The original Accidental Pren-her™Author of Discovering Your Inner Samurai: The Entrepreneurial Woman's Journey to Business Success
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