By Fernando Berrocal

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It can be difficult for a brand-new startup to make money in any possible scenario.  Let’s say you have an entrepreneur at the helm with vast experience, a great startup team, and all the necessary resources imaginable. The experience of introducing a new product in any market–and using those resources to successfully market it–are totally independent of your organization’s existing assets.  It’s how you use those assets that will determine when you turn a profit–and how much profit that is. 

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It turns out that managing expansion is essential for any kind of entrepreneur.  However, ultimately, it’s the customers that are essential for any business's success. Think about it: it's simple to launch a business and take care of everything else relating to “setting up shop”.  Becoming profitable, on the other hand, requires a nonstop lifestyle of hard entrepreneurial work. 

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To start, what exactly is the purpose of a new startup? What about the timing; how long does it take to develop a successful startup? That is one of the most common questions posed by any kind of entrepreneur. Finding your feet and becoming knowledgeable about what you're doing generally takes at least 4 years (counting since you started the operation of your business). However, in these particular competitive times, you must wait 7 or more years before you can declare true success for your startup. Be aware that there are distinct patterns in how these formative years come together as we have witnessed numerous founders go through this process. Everyone goes through the same procedure.

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First Year of Operations - Everything is Great

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There are many strong initial results when your business first starts. It's comparable to playing checkers and prevailing after just two moves. In this phase, you have incorporated, opened the business website, and received some news coverage for your opening. In the first year of operating any business, there are often many small successes that feel like significant advancements, yet there is typically little to no money going into your pockets. That last part can be very sad for you and your startup team.  You can't conclude without any data. But the fact that the company has been operating for a year is a positive sign. It's comparable to being the smartest person in your high school as a freshman. However, being in your first year alone is a terrific place to start.

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Year Two: Where's the Revenue? 

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When things start to go wrong in the second year, it’s very worrying. Your savings are drained at first, and the credit limit on the one card you vowed you would never use was reached a while ago. It seems that nothing will ever improve. You understand that just because you get early clients doesn't necessarily guarantee you'll have them forever. Even if they are paying, this notion holds true. It doesn't necessarily follow that you're not acting improperly just because a customer entered your store and made a purchase. You begin to question whether you’ve made the right choices.

You start accumulating significant quantities of debt and you begin to genuinely doubt yourself. When someone says, "Starting a firm is hard," they are referring to this particular aspect of the lifetime of any business. You should concentrate on little accomplishments and take each day as it comes regardless of the good (or bad) news you encounter. Since nothing is going smoothly, searching for some grand concept to fix every issue is pointless. In this mode, you have the flexibility to log in and out as needed. There will be no disruptions to your life, yet you will still be paid for the hours worked.

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The Third Year - Decision Time

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We’re back at our original query: how much time is needed to launch a business? You might be thrilled to launch a new business, but after three years, you might not be. Most likely, you'll be continually having second thoughts. You've had a few years in the third year of business to validate your notion. However, what happens if it doesn't? This happens for several reasons. 

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Firstly, by this point, a runaway success is all but impossible. You should be roughly where you are if you are still having trouble making a profit. Second, it will probably be some years before you can truly establish a successful firm. It's difficult to accept that it probably still isn't right now. You will then ponder whether you can maintain this pace for a further two to three years. You are fully aware of the terms of your agreement at this moment. Now is an excellent time to give up if it doesn't feel like something worthwhile to pursue. 

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Finally, don't place too much stock on other people; no one can predict whether what you're doing will amount to one thing or another. In the past, being a part of a startup from the beginning was the name of the game. Nowadays, it's more like you're preparing to take over the management of an ongoing business that is in a phase of expansion.

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Beyond the Fourth Year - Where the Magic Happens

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There are so many inspiring tales of little businesses that eventually become valuable. Some people find it simple to ignore the possibility since they first don't desire it or see any worth in it. Would you like to learn more about this and the time it takes to launch a business? Just take a look at MailChimp's history. These are some of the most creative businesspeople, as you've probably already noticed. They take some time to get their bearings as well. The sudden popularity of a mobile app? You don't want that to happen. Don't make that your aim when it does.

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In conclusion, most businesses don't establish a solid foundation until the fourth year. It's not as easy as having a concept and then refining it; you have to work on everything at once, since it takes time to polish all areas of a business.  This includes customer acquisition and product development.  Don’t be surprised when you aren’t properly profitable until 4 years in.  You might think that's a lot, but there are occasions when you need more to get a job done properly.

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Ready to bring your startup to the next level? Apply to MassLight’s next batch. MassLight supplies capital and a dedicated tech team. We take equity in return. Have questions? Refer to our FAQ page.