Growth Startups Are Not Profitable in Year One

Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing.

Startups require up-front costs to set up and build the company.

Any financial projection that shows profitability in the first year is suspect.

Upfront costs include building the website, filing the company legal entity documents, patent filings, and more.

Hiring the team takes time and takes time away from building the product or closing the sale.

Initial funding takes time as well.

Core business processes need to be put into place.

Initial leads need to be generated.

These costs always outweigh the revenue coming in.

Once the basic processes are in place, then the task of building products and selling to customers can increase.

After the sales process has started, there will be some time before revenue comes in.

It takes time to build sales momentum.

Once you have a growth curve going, the opportunity for break-even becomes a possibility.

Beware financial forecasts that leave no time for business or sales startup to take hold.

Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.

Let's go startup something today.

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