If you’re like many Biz Kids, the thrill of starting a business can provide enough adrenaline to keep going, regardless of profitability. But a business that doesn’t make money—or loses money—is rarely sustainable.
The ability for businesses to lose money and keep running, year after year, should be unfathomable. But it happens. Often. Some airlines have operated at a net loss for decades, and even the untouchable Amazon.com has reported a net loss in many a quarterly report, without losing the interest of investors.
But where’s the line? As a young entrepreneur, it helps to make a goal for profitability and then stick to it. Want to launch a business, but worry about how long it will take to turn a profit? Give yourself a certain amount of time to make it happen. If it doesn’t, have an exit plan for how you’ll recover from your investment. Then move on. Sometimes, the only way to strike gold is to try and fail a few times.
But in the end, how do you know if you’re profitable, anyway? And how can you plan out your expenditures at the onset to improve your chances of success? We’ve created a worksheet with those very questions in mind. Download it, put your math skills to work, and get on your way to profitable success!
For more on starting a business, watch clips from our episode, “Crash Course on Starting a Business” online for free.