HOW LONG WOULD YOU CONT. IF YOU WERNT MAKING MONEY?
Three critical parts of a good business plan are calculating start-up costs, projecting revenue expenses for the first 12-24 months and (this is the one most people miss) developing an exit strategy should the business not prove as profitable as was anticipated.Your revenue expense forecast should take into account that as a start-up, your business may take 3? 6? 12+? months to build up to its normal client base sales volumes. On a month-by-month basis, list your anticipated gross revenue - cost of goods sold = net revenue, then deduct your fixed and variable expenses for your net pre-tax income.Let s assume that your business costs $1000/month to operate and that it will take 10 months to build sales to their full level of $2000/month. Add up the deficits the business is building for the months until it s profitable and consider that part of your start up costs, along with buying tools equipment, inventory, advertising, etc.Lastly, build an exit strategy into your business. If you had to close it down tomorrow, could you sell it for a profit? Could you sell off its assets to cover any outstanding loans you might have? Could you back out of any long-term contracts you ve signed? Until you have an exit strategy you re comfortable with and/or enough confidence in your business model that you think failure is highly unlikely, I d think twice about opening the business in the first place.
you need a plan with accurate forecasts. it easily takes 5-10 years to break even cash flow. so you need a lot of cash to start. you need enough cash to sustain losses for maybe up to 10 years. you compare your results to forecasts continually to see if you can make it.I would say 2-3 years should be enough time to know if you have a shot. you will not be making money in 2-3 years but you will now if you can.
It appears that you have never been in business before, therefore, I would strongly recommend that you talk to a business counselor before you do anything else especially spend money. I d call the local office of your Small Business Development Center (SBDC, go to the link below and click on the map to get the office nearest you), the advice is FREE. The counselor at the SBDC will most likely advise you to write a business plan if you do not already have one and this is very good advice because it will force you to dig out all of the start up details and the costs of starting a small business and force you to also understand all of the aspects of this business including the customers you ll concentrate on (your market) and how you ll go after them. It will also give you a good understanding of how long you need to run the business in the red before you start making money and how long it will take to break even (repay all of the money you borrowed or invested)You ll need to register the business with your state controller s office and make sure that you have any city and county licenses if any are needed where you live. All of this will come out in a business plan.Try linking to YCHANGE International and read some of the articles especially the ones about a business plan and starting a business.
you have to ask why is it not making moneyi run a small business and the biggest thing i found that made the business successful is ADVERTISING.you have to let people know you are there. but this isn t cheap..but the best thing i found was once i got my website my business took off because everyone uses the net..so the one thing you will need this day and age is a website.i got mine from these people.they can provide professionally custom built web sites for ��150cheap affordable web designhttp://www.a10web.co.ukvery friendly Professional web design.
There is no exact measurement of time.It all depends on your staying power as in holding power in stock market. But this is not the stock market business.Of course, the business you are talking about as I presume is a traditional business where you must (if you have not, please do so) map out the fundamentals such as business objectives, operating expenses, cost of product, profit margin, estimated retail selling price, advertising and marketing plans, etc.In this new era of digital marketing or e-commerce, you can actually don t need to go full time and put all your eggs in one basket. You should start having a website presence, a list of best online classifieds to advertise your products or services. All in all, venturing into online may cost you very little investment or even free for a start. I am not pulling your legs, I have advised many people about your same concerns. There are many free websites, free hosting, cheap (almost free) payment gateway, free online classifieds, etc. When the need arise for you to upgrade to paid web facilities and tools, you do so according to your strength and progress.Think about it. Why would you give up when the ideas mentioned here comes with either very low cost or almost nil investment except your time and your existing internet access fee which you are already paying such as ....to be here at Yahoo Answers to ask this question.Don t give up. You can switch strategies or change/enhance products or enhance your sales offers, but never give up or state down your day to throw in the towel when you have not yet started.Take my free advice and I wish you the best in your endeavor.If you think you have no more ideas or inspirations, go for a jog and get new inspirations. Come back to these fundamentals and keep improving your business strategies.Remember also, when the going gets tough, the tough gets the going.Cheers.
I feel your pain, Rosemary. Several years back, a media company that I co-founded had consumed all of its cash -- mine and the other investors . Our three-member leadership team split on what to do: two of us decided we couldn t make this business work and felt wrong asking additional investors to come aboard; the other partner really didn t want to let go of the dream and insisted we continue trying to raise additional funds. Our debates became increasingly polarized and contentious until finally the two-against-one rule held. With two-thirds of us refusing to do more investor presentations, we finally convinced the holdout to join us in closing down the company.It was almost assuredly the most difficult business decision (and even personal decision) I ever made. But it was clear that we had misjudged the market for our publications. Ouch.I m not saying that my personal experience makes me an expert in your situation, but here is a process for making your decision: The background:Opening a business is part art, part science. You come up with the concept, figure out what the market wants, decide how to sell or market. Most of those elements are from the right brain, in other words more emotional and creative. Then you factor in the left brain parts: the hard numbers, costs vs. revenues, etc. Today:I believe that closing a business is part art, part science too. The numbers appear to be telling you that what you re doing now isn t working well enough. Obviously, something needs to change -- the way you re selling, the product mix, your pricing, something. That s where the art comes in: Are there realistic changes you could be making to the business that would help it not only survive but thrive? What are your customers telling you? What do your former customers say about why they left? What are non-customers saying about why they buy from a competitor? If you aren t asking those questions, do so immediately.The future:So, to answer your direct question: There isn t a right or wrong timeframe. Just like when you started your business, you need to decide if you have a potential profitable company here. Use the past and interviews with customers and non-customers as a guide. Then ask yourself this litmus-test question: If I were approached by this business owner for potential investment, would I do it? I believe the answer will become clear to you.
Unfortunately, most new small businesses don t make it past the 1st year, and the vast majority are closed within 5. It depends on how much you believe in your idea and how much capital you have to back up your business
It all depends on the business and how much you ve invested into it. Market conditions play a role too.For me, it took 3 years to break even in my self-owned publishing business.
