Hi all,

well myy company is approaching the 1 year milestone and the break even point is ever nearing!
How many of you guys made a profit in the frst year , if so was it a large amount ? and if not how long did it take you to start making a profit?

Hmmm, personally I plan to have my company profitable within 3 months or less. I seem to be on track to meeting that goal but I might be quite a bit smaller than you.

Profit was made within the 2nd month. Not large amounts, and it is all being put back into the company. So I guess no profit has been made :confused:

We made profit the first month :D Of course, it wasn't a considerable ammount.

accounting profit or economic profit?

We've been making a substantial amount of profit over the last year. We hope to grow larger in the Toronto area. Become one of the biggest and best :)

Yep - we (well, actually let's not joke around here at the beginning it was me) made profit. I've seen a couple friends open up businesses recently and only one of them is making money. The difference ... 3 of them went out and maxed every available credit card buying "business related" stuff - $3,000 on office supplies, $1000 on Business cards and Polo Shirts... etc. The one that is making money (like me) started really low end, and very very humble.

-neil

actually we've always been profitable. Starting out reselling we've moved to our own leased servers now. Starting turning a profit in the first month, then resold till wholesale costs reached that of a dedicated server, then moved everyone to that. Since then, every new account has been close to 100% profit above hardware costs (minus merchant fees, taxes, etc etc). When new servers are required their initial cost is well absorbed by the profit margin, so the dip in income is minimal.

Our business plan called for no overspending at all. If it couldn't be bought with funds available then it waited. This assures that there will be nasty suprises in the future and regardless of circumstance there's money around to deal with them if they do arrive.

My own train of thought has never understood how loading yourself in debt is a good way to start a new business - those early days are when you need liquid, available funds the most.

Greg Moore

There's definitely no reason to overspend in the beginning. You've got to have some patience. Let it grow slowly, and even though you won't make a lot of money at first, at least it can be profit. Once you get a good handful of clients, things can really start to take off! :D

Grow as you go. Never overspend. I know someone who keeps talking about "big" business, about how people he knows are just idiots because they refuse to hire kids to do the low-level work. I think it's him that doesn't understand business. Why in the world would you go hire someone at $25,000/year to do stuff when your total profit is only $50,000 and you can handle everything on your own?

Some people are meant for sucess, others are either just trying to put you down (jealousy) or they just don't understand business.

Profitable on the second month.

And I am also a believer of starting small and humble.
No point buying large 300000square feet of office space, 10 dedicated servers, hire 20 personnels and just wait for customer to come in, when they dont the 20 personnels will just stand there looking at each other, occasionally slapping a mosquito that flies by.

No use overburdening your business with large overhead, its good to start with bare necessities.

that my 2 cents worth

How does your company survive if it is not making a profit ? I have always made a profit since day 1

Sean

Sean/Carrighost,

Are you saying that one day you got yourself a server, and the next day you got enough customers (and income) to pay for the server, taxes, merchant fees, advertising and personnel costs, office supplies, internet connection costs, etc ?

In that case, I'd really like to see your business plan ;)

heh I would also :)

If you can manage your money and have a solid business plan being profitable is not a huge deal. We were profitable in all of our arenas after 6 months of service. We are not just a web-host so that made it a little more difficult. I believe most of our success came from the long planning stage we went through to begin with. We stuck with our business plan even though we could have overspent in many areas after a couple of months.

I have seen hosts come and go, and many of them don't have good business underpinnings. Tax ID's, making payments to the IRS and other "required" things are stuff some overlook.

Greetings:

After reading the replies to date, I'm confused into whether this is a discussion on gross margin or profit.

Is everyone on the same wavelenght (it is probably me)?:

Gross revenue
Less direct costs of sales
Equals gross margin

Gross Margin
Less operating expenses (which includes salary)
Equals pre-tax profit

Pre-tax profit
Less taxes
Equals Post tax profit (which is what I think the subject is about)

Over the past seven years we've had ups and downs with the trend being up.

One person asked the question of how do you stay in business if you have a loss? The answer comes into proper cash flow management and continued growth in sales to customers who do pay their bills ;-)

The biggest issue is ensuring you are not bleeding to death and your business plan is realistic.

If you are a loss with no end in site but optimism, then cut your losses. Otherwise, grin and bear (no pun intended) it.

Thank you.