How long should it take my new business to start earning a profit? I have a deli that has been open for about a year now. We are getting close every month to just breaking even but we never quit get there. We are running out of money to subsidize the loss and are wondering if it is worth it to keep hanging on. Please, any advice would help.

The biz will become profitable when total revenues consistently exceed total expenses. OK, not trying to be facetious here....the point is that there's no 'formula' for determining the date on which a business moves into black-ink territory.

A decision to stay with it should be based on something you can see, tangible or intangible, that indicates a reasonable probability that at some near-term point, revenues will indeed exceed costs, and remain so.

I'd imagine you've already scrutinized your cost structure pretty thoroughly, and have reduced your expenses whereever feasible. That leaves the Revenue side of the equation, and in most small-biz cases, that's really where the answer is--as costs are already about as lean as they can be without impairing the ability to generate sales.

There must therefore be something that says that Revenues are going to head significantly northward, enough so such that an attractive profit will result. It might be something internal, like a new marketing strategy; it might be an external influence such as new businesses moving into the neighborhood (full of employees needing a nice deli at which to have lunch). You've got to see that sales are going to increase, either as a result of something you do, or as a consequence of external factor(s).

Get with your accountant and knock out a cash flow budget. See what levels your Revenues need to attain in order to produce various levels of net profit. Then figure out what must be done to attain such Sales levels. "Making a profit" isn't something that you just wait on, and then one day it begins happening to you. You've got to know your numbers, and what kind of Revenue numbers you'll need to hit your specific profit targets. If such sales level(s) are do-able, you then figure out how to make 'em happen.

Investigate delis similar to yours; figure out their traffic and sales volumes. This 'homegrown' market research will help you ascertain if the Revenue level you need is attainable.

Best of luck!

The failure rate of businesses is very high in todays economy, most business take a minimum of 5 years to show a true profit, if you are running out of funds you could look for operating capital, maybe you could consider taking out a loan against your credit card sales, try some ways to increase revenue, do you deliver food to businesses for free this is a big thing many business people don't have time to take lunch and would like to have a sandwhich at their desk, maybe you could do that, also you could consider making copies of your menus and getting them out in all businesses, maybe you could offer a 10th sandwhich free program or something like that. hopefully some of these ides will help you, if you like you can contact me at josh@kundertenterprises.com i am always willing to work with new business entreprenuers

Joshua Kundert
Joshua Kundert consulting
http://joshkundertconsulting.com
josh@joshkundertconsulting.com
866-584-6508

Sounds like you are waiting for it to happen. Wrong mindset. You are at a point where you need to promote like mad - flyers, ads, frequent user cards, events, PR capers, articles in newspaper, word of mouth, affiliate cross-referrals, offering unexpected services, upscale positioning, search engine optimization, etc. PROMOTE, PROMOTE, PROMOTE.

try promote your business in the other way, do your best to promote your business in all method you can think.


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