Setting a business is challenging no doubt but what’s even more challenging is to start making profits. No matter how great of a business idea it is, hands down, you can’t make profits in the first year. A CFD broker would tell you the same if you have been planning to earn a living with trading.
It is impossible to start making profits right away. Usually, startups have to struggle to make their first sale. The expected time for a startup to earn profit varies by industry.
Initially, all startups are bound to lose money. But you started your business with an idea and unless that idea is not selling, you can’t really make money. You will only think about making profits once you are sure you will start selling it. For this, you will need resources (office, people, maybe even equipment) and all this costs money. Once your product is ready, you will generate leads but the initial sales are always slow. You might not be able to cover the expenses. But finally, once your sales revenue reaches a certain level, your monthly revenue will start covering the usual expenses. This will be your operating breakeven point. Normally, companies take 30 months to achieve that.
Before that happens, your business might have to lose a lot of money. But after you have achieved the breakeven point, you are expected to continue making revenue until it equals the amount of money you lost in the first 30 months. Make sure you have a reliable internet connection like Spectrum internet, so you can achieve your goals without any hurdles. Once you achieve that successfully, you have reached your initial equity breakeven.
Now you need to plan out how to stack profits with your startup. Follow these tips to get set and go:
Sack Your Underperforming Customers, Suppliers, and Staff
It is never a bad idea to get rid of the suppliers, customers, and employees who tend to make your workday stressful. This will foster a better work environment for your whole team. Don’t hesitate to remove those customers who are making you lose money.
Change How You Present Your Business
It’s ok to change the way you work. To improve sales, start talking to your customers. Ask about their experience. This time, focus on the benefits they are getting from using your product or service. Then, work on improving sales performance.
Sort Out Your Offer
Ask yourself – what makes you better or different from the rest in the business? Why should people come to you and not your competitors? As you can articulate the why and what, you sell in a better way.
Keep a Close Watch on Your Competition
Whenever you are about to enter a market, you need to understand who you will face off against. So check out how many people are already working in the same niche as you, what they are doing, and how they are successful.
After gathering all this information, it is time you plan out how you are going to it better. How can you deliver more value? How can you make your business stand out? It is actually great to have some competition. You will have merit against which you evaluate your business. For starters, don’t choose oversaturated markets. It will be tough and plentiful to fight for customers.
Ask For Referrals
Whenever you are starting a new business, the fastest source of sales is referrals. So the sooner you reach out to your personal contacts, the more sales you will get. Send everyone you know an email describing your product or service. This way, you will get to create a sales force without spending much money.
Follow Up After Each Sale
A customer can either become your best asset or worst liability. During your early days, it is extremely crucial to get feedback on your product, service, pricing, and customer service. This will all be fruitful for the image of your business. The best way of getting feedback is via email, follow up calls, or surveys. Use this information for adjusting the way you run your business. Better services bring more sales and more sales mean more profits.
Collect Accounts Receivable Quicker
Customers often delay invoice payments. The success and failure of a business depend on how quickly it collects its accounts receivable. Make a policy on receiving the payments quicker. Your bank balance will appear healthier. This will also make it easier for you to get bank loans in the future.
Add Multiple Revenue Streams
To bring more profits, it’s not a bad idea to add multiple revenue streams to your business. Cable TV service providers like Spectrum TV also offer internet and phone service to its customers to add multiple revenue streams. The core idea based on which you started your business will obviously be the main source of income. But you can include other products too as cross-sells and upsells. Explore different options because you would definitely want to increase your chances of making more profits. Try bringing multiple streams of income.
It is possible to build a wildly successful startup and eventually you will start making profits, too. But for that, you will have to stick to the plan and follow some rules. If you have ever heard of online trading, you must exactly know how important it is to stick to the rules.