How Long Does It Take To Become Profitable?

Ahhh… the dream of jumping off of the corporate bandwagon and running after the golden city that is entrepreneurship.  Isn’t it comforting knowing that if you only had the courage to follow your passion, you’d be rich, popular, and successful?

Well, that’s a bunch of bull

Owning a business sucks…

When I first started Pro Sulum, LLC in the fall of 2009 I had high hopes.  I blogged, recorded video, ran Craigslist ads, and worked social media.  My dream was to be able to leave my job, work from home, and earn a living based off of what I produced rather than how much time I spent in a cubicle.  Everything looked good and I had seemed to be doing all the things taught in the books I had recently been reading.  Unfortunately, the only thing I was becoming accustomed to was sleep deprivation and nothing to show for it.

Even after learning to sell and to price, business still wasn’t very good.  In fact, there were times when I almost had to close up shop because the time spent on client projects wasn’t worth the price they had paid.

Come the end of the year, although revenue was in the 5 figures, expenses overshadowed them.

Being profitable takes a lot longer than you think

Learning to run a profitable business is tough and takes an enormous amount of time, determination, and chutzpah!  After almost 2 years, my company is only now beginning to be profitable (how’s that for transparent).  You know what?  Most companies don’t see a profit for the first 3 – 5 years.  That’s the average.

If you aren’t in it for the long haul, you will fail.  We are used to seeing successful entrepreneurs and assume that it only took a year or less for them to get there.  99% of the time these entrepreneurs spent years of working their #$$ off to get into that position.

If you make it big quick, great!  But as history shows, don’t expect your business to soar before it even has wings.

Update: Welcome any New York Times readers.  To help Ramit out, and to clear any misconceptions and to try to put things in context, I decided to add  my profit and loss chart for the last year and a half.  The point of the article is not saying that “owning a business sucks so don’t do it because I’m not making money and you won’t either” but that it’s really, really hard.

As far as the expenses go, a lot of them were things that I bought unnecessarily.  For example I bought a piece of softrware for $1500 that I rarely use, I bought a $500 email newsletter template that I never use, and so on.  Many of the expenses were because of my own idiocy.  Also, a good deal of the expenses were legtimate business expenses like food at networking events or eating lunch with friends who could be prospective times.  Those things are stuff that I’d be doing with or without a business.

2011-04-27_1749

Note that about 99% of the revenue comes from my Pro Sulum, LLC web development business. I’m not done with April yet but I have some projects coming and March was a great month for me. You’ll also notice in March of 2010 a spike, that’s when I took the Earn1k course :).  I don’t have anything to gain from Ramit’s course on the blog.  I don’t get affiliate money from him in the least.  I took the course and it helped tremendously.  For more on what this site is about (Definitely not get rich quick), please check out my about page.  You can also Check out the post dedicated to Ramit’s NYT article for more context.



Feb. 2014 Update Below

If you are are new to the site welcome!  The above post is still a great way to get an idea of how long it takes to get your business profitable.  However, quite a bit has changed with my business and had helped to definitely increase the profitability of what I do.

One thing that has been a great success is teaming up with a partner.  Last year Brett Bartlett and I teamed up – He was a master of selling physical products online, and I new how to create websites that could be used for information products. I still create sites on the side, but it’s nice to have consistent income through a variety of channels coming in.

I actually did a course on this in the Warrior Forum a while back but basically this is how it works:

Premise – You can’t do everything.  That being said, if you can leverage the skills of others you cut your time spent on other things (things that you may not be good at) in half, sometimes more.  You don’t want to necessarily find a business partner that has equity in your business, but  doing an informal joint venture ads a number of positives that can help your business and get it to profitability much more quickly.

  1. Example 1 – with my web development business, I knew that I sucked at design.  Rather than spending my time learning how to be a better designer, I ended up teaming with a designer friend that wanted to get into the web space.  Not only that, being that I was working full-time, I didn’t have much time to market myself.  The great thing about my JV partner was that she was on her own full-time.  That meant not only did I get a designer on my team, I also had someone marketing on my behalf.  It was a definite win-win and a big boost for my business.
  2. Example 2 - In the situation with Brett above, he was making well over 6 figures in gross sales via Amazon.  However, he really wanted to get into the web space and start creating information products based on the knowledge that he had acquired.  As luck would have it, I knew how to do all of the things that he needed (email marketing, membership sites, e-books, blogs, etc.) and it was a great win-win again.

Anyway, the point is that – even if you are hell-bent on being a solopreneur – at least give JVing a thought.  It’s freaking hard doing everything by yourself and it can be far more profitable for your business if you team up with someone that augments areas that you may suck at.

You can check out what we’ve been doing in the free webinar below (we also have free videos being posted on this site too – just check some of the recent posts.  It’s pretty cool stuff if you are looking to sell physical products in your business.

Discover How Brett Turned $400 into a 7 Figure Business In Less than 3 Years

How a normal dad used Amazon and Ebay to create an amazing business that supports two families and a large staff of excited employees, and how you can too!

12 Comments

  • DUG

    April 1, 2011

    Very true…Very wise. A boot strapper has to be willing to be paid with passion and often self-sufficient passion. If you have a family you also have to have a spouse who is willing to sacrifice with you for your dream. It helps if they have an income as well. :)

    It's a lot of hard work but someone once said, "if there's a will, there is a way."

    Great post Dean.

    May your will be strong and your way clear!

    • Dean Soto

      April 1, 2011

      Oh totally, man. I'm definitely not saying that all the pain of owning your own business isn't worth it, but it's definitely not a get rich quick thing (especially if you have a family to support).

      Good job with what you are doing, my friend, and thanks!.

      Dean

  • Maria Brophy

    April 11, 2011

    I love working for myself – but I honestly thought, 10 years ago, that I would be rich by now! I am rich, in spirit and my lifestyle. I'm not yet making the 2 million I planned for…

    But, my life is wonderful, traveling the world and doing what I love. So for that reason alone, I'm glad I stuck to the plan and I'll continue on in the business of art.

    • Dean Soto

      April 12, 2011

      Maria,

      Thanks for the comment. That is really awesome, and a great example =). Very cool that you are living your dream!

      Love your site!

      Dean

  • @ultrasoundangie

    April 13, 2011

    Wow. That’s very transparent but very much needed and appreciated. There are many entrepreneurs popping up but only the ones in it for the long haul will survive.

    • Dean Soto

      April 17, 2011

      Thanks so much for the comment Angie =)

      Yup! It's all about who has the strength to stick it through. Nothing worth doing is ever easy.

      Hope you are doing well!

  • Edwin

    December 7, 2011

    Thanks for the great advice. I am barely new to starting a gig from scratch and everything here sounds about right.

  • Father Christmas

    February 26, 2012

    There’s no doubt that business is tough, but your conclusion sounds like the common fallacy: “If I can’t do it fast/If I can’t do it, then nobody can.”

    The problem with this, which makes it a fallacy, is that it depends on a single premise: that nobody is faster, nobody is smarter, or nobody is more determined than you are, therefore everybody else will have the same experience, or a worse experience, because you represent the peak of human intelligence, creativity and experience.

    It’s not true that everybody is like you. Many people will be slower, or dumber, or less hardworking, or less determined, and they will fail entirely. But also (and sorry to burst your bubble), many people will be faster, or smarter, or more hardworking, or more determined than you were, and they will become profitable faster, and make more money in the end.

    I’m tired of hearing the “I couldn’t do it so you won’t be able to” argument because not only is it egotistical, it achieves nothing, except for putting off many potential business people who may be equal in ability to you or, potentially, greater.

    • Dean Soto

      February 26, 2012

      Not sure you read the post. I am not saying anything of the sort. The average for profitability is 3-5 years. That is just the facts. There are plenty of smarter people that can do better and dumber people as well.

      Point is, be realistic and don’t give up just because you aren’t making full time income in a year. Sorry to burst your bubble, but owning a business is hard work.

  • Mike

    March 16, 2012

    Yup, owning your own business definitely sucks. I have been doing freelance computer programming for four years with little to show for it. Of course, by writing software it is easy to be profitable but hard to earn the lifestyle you want. I have had many 12 hour days staring at the screen and asking myself why. What I have learned through this process, is how to fall down and pick myself back up again. There is a lot to learn, and if you happen to be rich within a year you probably cheated or just got lucky.

  • Eva Tam

    April 17, 2012

    Hi Dean, thanks for sharing your story! It’s somewhat comforting to find that I am not alone. Just opened a gift shop 3 months ago and plan to give it 9 more months to see if business improves.

  • I find that most of my income goes on business coach gurus at the moment. It is depressing trying to survive as Maria says but hand on in there guys the there is not pleasure without pain!

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