It’s no secret that, despite being a household name, Amazon failed to make any real profit until 2001. That’s shocking when you consider that it started in 1994. And, this isn’t the only business giant who took a while to get off the ground. Even Microsoft failed to see profits for five years. Admittedly, this is often because these big companies are playing the long game. They want to see substantial money, and they’re willing to wait for it.
But, there’s still a lesson to be learned here for those on the cusp of an enterprise. If you jump in expecting immediate profits, you’ll be disappointed, and could find yourself in debt. To make sure that doesn’t happen, you need to be realistic. Accept that it could be a while before you see any profits, and consider how you can operate around that fact. Amazon managed it, so you should be able to weather those non-profit days. Here are a few of the ways how.
Turn to your rainy day fund
If you’re lucky enough to have savings, they could become your saving grace. You may be reluctant to dip into them, but this is as rainy a day as any. At least, it’ll certainly feel that way when you’ve lost money for a few quarters in a row. Besides which, putting savings into your business is like investing in a way. If all goes well, you can make a significant amount more than you had in the first place. If it helps, set in place a savings plan to replace that money in the next five years or so. Then, get stuck in and use it to fund your enterprises.
Take out a loan
Another obvious choice would be to take out a business loan. There are many options for small businesses, including startup loans, and even fast small business loans if you find yourself in a fix. The only issue with borrowing money is that you have to give it back. But, that shouldn’t be a problem if you develop realistic terms. Be honest about when you’re likely to see a profit and work this with that figure in mind. Of course, you don’t want to take too long over repayments because that’ll only increase your interest. So, work to find a balance between a realistic and expensive repayment plan.
Find a way to break even
When we hear of businesses not making a profit, we assume there was a loss involved. And, in some cases, that’s true. But, often with startups, the priority is to break even before profits are possible. That way, you can at least keep your finances steady during those early stages. Of course, this means a lot of hard work. You need to really streamline your business processes to ensure you’re not spending more than you earn. Keep a close eye on your finances, and work as hard as possible to find custom. Soon, that delicate balance will tip in the right direction.