By Shannon Leonard
We’ve written before about how to maximize startup revenues through strategic startup finance and various other strategic initiatives. And to be sure, stretching every bit of capital you have in the early going is a fundamental necessity for any small business just starting out. But finances continue to be challenging for business owners long after the initial startup process, and sometimes this goes unaddressed in pieces of advice for business owners.
Specifically, the idea of what a business owner ought to do with profits once they start coming in is not discussed frequently enough. It can be such a massive undertaking to generate profits in the first place that a lot of people don’t know how to make the most of them once they arrive. As a reminder, “profit” refers specifically to whatever revenue is left after addressing necessary expenses (debts, costs of operation, payments to employees, maintenance, etc.). Often, the temptation is to pocket the profits, given that the ultimate goal of any startup is to earn money.
These days the entrepreneurial dream is to build a company that hits one million in revenue without employees or much if any fixed overhead.
Of course the margins will still vary greatly depending on what type of company it is. Does it sell a purely digital products such as apps, software, or educational content? The margins here can be exceptionally high. Does it sell a physical product which must be made first from parts and with labor and then stored somewhere until sold? The margins here can be in line with those of a typical brick and mortar business.
Either way, the one person company that hits one million in sales is the new benchmark.
How to Fund Your Startup Using Business Credit and Loans
This is what you do when investors are not interested in funding your startup.
This is a general overview that anyone in the US can use (not sure how credit works in other countries) to obtain a quick $5-50k in funding. First let’s look at what that really means:
Gary Vaynerchuk talks to a university class about what it really takes to succeed as an entrepreneurship.
This is worth listening to if you are struggling.