Category Archives:

Quick Profitability A Necessity For Startups

Thursday, April 1st, 2010
Posted in Uncategorized by Joel Gross

Many businesspeople have been led astray by the attractive notion that companies don’t need to focus on monetization immediately. Companies like Youtube and Twitter that are getting huge valuations with little or no profit lead entrpreneurs to shoot for the big acquisition rather than actual income. However, acompany that has positive cash flows is in a far more powerful position to negotiate than one that doesn’t. Facebook has held out and has not sold and now is actually profitable. It can now take it’s sweet time to grow or eventually go public in a way that is in the best interests of the shareholders and Mark Zuckerberg.

A few certain companies don’t need immediate cash flows, but these companies need a very strong posiibility of becoming profitable In a set time period or develop a technology that they can sell for a healthy price tag later (acquisition). But the vast majority of these businesses do not realistically have that outlook. Most companies need to focus on immediate profitability.

If you have a grand idea that will take a lot of money to develop, I suggest you first focus on getting as much revenue as possible as quickly as possible. This will enable you to reinvest and build your idea out according to how you envision it. Trying to raise capital can be difficult and time consuming and can force you to give up control over how your idea comes to market.