Financial Planners Orangeville ON

Is fear of how you’re going to make ends meet until your new business starts turning a profit holding you back from starting up? You’re not alone—but there is a way to conquer those fears. If you take the time to make some profitability measurements and predictions - you have to know where “there” is before you can get there - about when you’ll break even and become profitable, you can let go of some of that cash-strapped anxiety and focus on actually starting a business.

Crunch some numbers to measure profitability

Your first step toward profitability measurement is to put together a cash flow projection for the first two years of your new business. Start by answering these four questions to get started on your path to predicting profitability:

1. How much cash do you have to start your business?
If you’re saying to yourself “Good question!” then perhaps you better stop and read up on finding funding for your business . But, seriously, before you can put together your cash flow projection, you’ll need to know how much money you have to start and operate your business.

2. How will your business make money?
You’re a savvy entrepreneur, so you already know that you must do some market research and competitive analysis to understand the growth potential of your business. You should have some market research on reasonable pricing for your product or service, the piece of the market pie you can expect to grab for yourself.

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