How to Know Upfront Whether Your Startup Will Make Profit
Business is so different from so many other occupations out there. The strategies employed, the requirements and all, are just so different from that of other type of jobs. Majority of those who venture into business do so because they dream of making a lot of money, but you cannot always ascertain whether you will make end up making as much money like you have dreamed of or not, you can only work towards that goal. Sometimes, everything works out so fine that you have a lot of money coming in for you, and sometimes, you just have to hope.
Business is like basketball, when you play basketball and fire a shot, sometimes you are so sure your shot will be a score, even a three pointer, and at some other times, you are not sure of your shot, all you can do is hope that you score. The same thing applies to business. Sometimes you just have to hope that things turn out well because you are unsure if your startup will make as much money as you envisaged.
As much as things can be pretty unsure as to what the future of your startup will be like, you can still figure out a way to know whether you will make profits. Like our basketball illustration, sometimes you will know if you will make profits because you have already worked hard towards that end, you have put all of the things in place that you are supposed to, and you keep up your hope about making as much money as you forecasted. This article will guide you by giving you hints with which you can know upfront whether any given startup will make profits.
- If you are solving people’s problems: problem solving is not limited to scientists alone. Business deals with problem solving and that is one of the aims of every entrepreneur. As an entrepreneur, if as part of your reasons for venturing into business, problem solving is not included, you will fail. There is no way you can make profits without selling, and if your product does not address any problems, then there would be no sale that’s sustainable. While starting your business, start with the mindset of solving people’s problem. Don’t only have the mindset of making profits because are focused on solving problems, you will end up making money. There is absolutely no way people will purchase things that do not add value to them. Get it right: apart from making profits, the mindset of a problem solver helps you develop the right product for the right set of people. When you are so keen about solving a problem, you will want to develop a product that is satisfying at all cost, which will lead to good reputation and profit for you.
Nonetheless, as much as you are so keen of solving problems, have it in mind that you cannot solve everybody’s problem. There are over 7 billion people in the world and never think you can solve all their problems. Rather, channel your business to a particular set of people and be keen about satisfying them. This will help your startup in generating profits.
- If you have failed before: falling is bound to happen, but when we fall, do we sit and sink into the earth? No we rise up and optimize the experiences we gathered during our fall. The reason why you see adults are wiser than kids is not just a matter of age, it is a matter of experience gathered. As it is in life, so also is it in business. If this is not your first business, you have a higher chance of succeeding. If you have done multiple businesses and failed, you might succeed in your current business. This is because as experience makes man in life, so does it in business.
Over 70 percent of new startups fail in their first two years. And less than 10 percent make it to twenty five years and more. But what if I told you that 80 percent of the 10 percent that made it to twenty five years and more have failed at some point? Some in their first two years, some in their first five years. Failure is just a stepping stone to success and until you see it that way you might never make profits in your startup. But if you have once failed and you realize the mistakes you made that made you fail in your previous businesses, there’s probably a higher chance that your current business will make profits, only if you have learnt from your past mistakes.
Read Also: 10 Ways to stay Ahead of Competition in Business
- If you can control your spending: like I mentioned earlier, the future cannot be predicted, but you can prepare well for it. As a new startup/business, you don’t have a luxury of income flooding in either from the government or anyone; except from your customers though. It is left for you to make good use of the little you have. Control spending and don’t spend on things that do not matter as it will have a toll on your profitability in the long run. No matter how well you make sales as a startup, never spend lavishly, because what you have now is not what will determine the future of your startup, but what you are able to hold and accumulate as your current asset over a long period of time.
If you are able to efficiently control your spending among other things, your startup will make profits, but if you are unable to control your spending, you might well be seeing your business crumbling before you know what is happening. To avoid this, controlling your spending at every point in your business is the only way to go, for making profits and not experiencing the reverse.
- If customers are buzzing about you: as a startup, you want to make big sales and gain more customers so you market and advertise. But what happens when you don’t advertise? Will customers be able to buzz about you? Will they be able to put up word of mouth promotion for you? This brings us back to the subject of customer satisfaction. If your product is satisfying to your customers, they will tell others about you even without you requesting. And this is a sign of success for you. Once that becomes the case, profit is smiling at you!
- If you are turning profits: for most startups, it usually takes some time before profits begin to come. Before that time, some quit, some get tired while some continue with the hope to make profit. However, in some cases, there are businesses that are so good and so promising such that profits begin to come in almost immediately after the business took off. This is a clear indication then, that such a business would make profit. If such a business can be managed with wisdom and all of the previous points are applied, long term profits will be the result.
Entrepreneurship is a risky career, but if you can see the traits we have outlined in this article in your business, I bet you are in for a successful ride.
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