How long did it take for your business to be profitable? 💵

[isabelle]

Hi all! Hope you're having a lovely Wednesday ⚡️

Today we're wondering...

How long did it take for your business to be profitable?

We realize this can be a sensitive topic as the journey to profitability can be challenging. If you’re comfortable sharing your experience, we’d love to hear from you ❤️ 

[DesertBreezeAV]

Our business was started in 1987 by my first wife (passed away in 2012). It was profitable from the start (Bookkeeping and Payroll service) out of the home. We added Tax preparation around 2000. I worked full time for Kroger (42 years) until retiring at the end of 2018. The business really took off after that. Controlling costs, providing great personal service is key to profitability. 

I attended the National Association of Tax Preparers conference in Las Vegas last week. One of the classes I attended was Hobby Loss Rules and Case Law. With Congress planning to give the IRS $79 Billion in the new budget plan (please note that the IRS annual budget is $13 Billion), the plan is to hire 33,000 Revenue Agents to bring in more $$$ to pay for it. 

Ask for guidance from a professional regarding the Nine Relevant Factors that the IRS and Tax Courts use to determine whether you have a business or hobby. Starting in 2022, all transactions (payments) online by credit/debit over $600 total for the year are reported to the IRS in the form of a 1099-K. Previously, the total for a 1099-K was $20,000 or 200 transactions.

Get ready, keep great records, and good luck out there!

[Thevioletfox]

We keep costs as low as possible, so immediately. We use the free version of square, ship media mail, and haven't invested in anything beyond the absolute essentials yet.

[LaLaLobster]

 www.LaLaLobster.com so far so good. Keeping our nose to the grindstone!!

[David-Wiwel]

Very lucky in the market that I am in. We were able to turn a profit after the first month, we have never had a month where we have been in the red since our incorporated date. Been incorporated since mid-2020, very lucky we have been able to do so well.

[TerrorTacos]

Day one!

[UncleBacon]

Our business was able to be profitable immediately. We started it as more of a side hustle in 2019 to test the market and see if we could make a living off of it. The tentative plan right now is for my wife and I to both quit our day jobs and move full time into the business in the spring. Fingers crossed!!

[Captian_Cash]

It can be hard to hear but if you aren’t profitable fairly quickly (six months) you have a hobby not a business.  You have to determine if people really want what you have.  If not you must immediately start to provide something they really need/want.  You have to be brave and make the change quickly.  You may eventually build a customer base that will get you through lean times but you can’t depend on loyalty.  Customers come and go.  Always be honest with them.  Give them great service.  Take hits on orders from time to time knowing that you will be rewarded in the end.  

     Reputation and good reviews are a must—but it’s mostly about value.  Are you offering something that will make their life better?

[CeeKay1]

Right. the price is the price. Value is priceless!

[Inannas1]

I started my shop Nov, 2019. We used our savings to get through until now. I see a bright future for my shop. It is solely brick and mortar. I have an online shop, but I do not ship things. I moved it to a different location this June and things are looking truly great. I am super excited about the Holidays, and looking forward to BREAKING EVEN. I hope I do, then things will be much easier to face next year! Brightest Blessings to those who keep on keeping on.  ps...I also decided I was going to stick to a higher pricing formula than i had been using, and it seems to be the correct decision. Hard to always second guess what people are willing to pay for. The customers are always saying the appreciate small shops and locally made, and USA made. So that helps me a lot!

[TheChillSpot]

It seems like a lot of people are confused about what profitable means, it doesn't mean making money on any individual day it's about making the money back that you put into it. For example if you have a 50% profit margin on any given day and let's say you spent $10,000 to get your business set up, you wouldn't 

[TheChillSpot]

It seems like a lot of people are misunderstanding what profitable means the way you're using it, profitable in the sense that the total expenses ever put toward the company are outweighed by the total income ever received by the company. For example if your startup cost was $10,000 and you made a hypothetical 50% profit on average per day. You would have to sell $20,000 worth of goods to break even.

[DixielandRC]

I run a Small Hobby shop. Started with a $1200 order and its been going up ever since.

4 years next month.

I still havent quit my day job but its getting close to that point.

Im very thankful for all the steady business. Its been nice.

[LemonadeShakeUp]

From the start it takes 3 years to get business going very well,you well have your ups and downs that is part of it . you just got to stay with it. GOOD LUCK

[PLGbabe]

I've been open for 12 months and FINALLY feel profitable! I've opened up 3 brick and mortar stores within this last year like a crazy person lol I should have just stuck to one store and focused on its growth and scaling it but I am a crazy entrepreneur.

[CalCroCrab]

When I deconstructed the way I thought about money and began charging fairly for the services I provide.

[rtfulk]

We started our business in 1985. It took about 2 years to become profitable, but it took 4 years to sustain itself and us. We worked full time jobs while growing the business. In 1989 we both quit and went into it full-time and have been working it ever since.

[farastyle]

We started 2018, with a $250 investment in tools, today we have 7 employees counting with us(2), and still not feeling profitable. we just had to get a new line of working capital so we could pay the bills till receiving all the money the customers own.

it's been a hard journey we had better times and hope to come back to this times.

[Danielshr8389]

ist pretty easy so let me tell you why i little bit later!

[Jesse1]

40 months!  Started on a shoestring and survived Covid shutdowns.  

[Spottice]

I opened my home decor ecommerce company on February 14, 2020, my own valentine gift on the wrong year! While not profitable yet, I maintain a healthy supply of products in stock. To create sales I use Facebook marketplace (my biggest seller) and participate in pop up markets to increase sales. Wished my website did better. However, we are not in debt, not rich or broke, but make enough to keep running my little company.

[lc-wt]

1 Year, Started before covid, unfortunately covid killed my market niche when I just started ramping up. Took the time to work on new designs/products and introduce lower price point items. Now I'm trying to find ways to scale up to meet demand and removing lower profit margin products. Reopening of in person gatherings has helped.

Never give up, try new things and market test.