How long you should wait for profit after starting a new business?

The short answer is that profitability depends on the business.

Let’s Define Profitability

Before we talk about becoming profitable, let’s get on the same page about the meaning of the word. Technically, when your revenues exceed your expenses, you’re making a profit. But there’s profit and then there’s profit. The phrase “ramen profitable” describes a business owner who is barely making enough to earn a small salary and pay living expenses. Obviously, this shouldn’t be your goal. Instead, you’ll want to pass that point to get to what’s called corporate profitability, which is when you have remaining capital after all expenses and salaries have been paid. Those are the type of profits referred to in this article.

When and How do I Achieve Corporate Profitability?

There’s a reason no lender or investor will grant a small-business loan until the borrower submits financial projections that estimate the future profitability of the business. The best answer to your question will be found in these documents. Here’s how to use them to get your answer.

Get a Baseline with a Break-Even Analysis

Once your business begins to break even every month, you can stop infusing it with personal cash because the business has begun to pay for itself. This is the first step on the road to profitability, and it’s important because, after reaching this milestone, every dollar earned will be considered profit. To calculate your break-even point, you need to know the gross profit after sales costs for your products or services and the fixed and variable costs for your business. Then, figure your break-even point by dividing the gross profit of your products or services by the sales price. That’s your gross profit percentage. Take that number and divide it into your fixed costs to determine when your business will break even.

For example, if your fixed costs are $3,000 per month and you make a25 percent gross profit percentage, you’ll divide $3,000 by0.25 and come up with $12,000, which is what you have to generate in sales in order to break even. You can also use a free online break-even calculator from Harvard Business School to help you out.

Determine Future Profitability with a Pro Forma Income Statement

Now that you know when your business will break even, let’s talk about determining profitability. A pro forma income statement contains four components:

1. Sales projections: You’ll need to make an educated guess about how much sales your business will do every month for at least the next one to three years. You will use the research and knowledge that you have about your industry to create an estimate of your expected sales. Check out this three-part  instructional video on the topic courtesy of the Small business Administration.
2. Cost of goods sold or value of services: If you manufacture a product and sell it, you’ll need to create a cost of goods sold budget report. If you are a service business, simply place a value on your services and use that figure.
3. Other expenses: Now you’ll need to determine the cost of your other expenses, such as rent, phone, internet, accounting and bookkeeping fees, website maintenance, marketing and advertising, insurance premiums, utilities, salaries, and debt repayments. Total them up to arrive at your monthly fixed expenses.
4. Gross profit estimate: Now that you have all the information you need, you should be able to determine exactly when your business will become profitable. Use your sales projections to determine how many sales you’ll make in a given time period, and then deduct your expenses to get an estimate of your gross profit. By preparing a month-by-month report for each of these areas and charting the results, you will be able to clearly see when your business will become profitable.

The short answer is that profitability depends on the business. For example, online businesses will likely become profitable faster than bricks-and-mortar stores because they have fewer operating expenses. The long answer is a bit more complicated. But in the end, it is a question that you should be able to answer for your own business.

This is a very general question. It all depends on the nature of business and the product. There are traders who make profits from day one and there are business houses that "wait" for number of years to start getting into the "green". For a medium scale business if the business planning, strategies and the marketing is planned well, the profits can flow in within 10-12 months - provided the business is steered and controlled strictly. For larger businesses, 3-5 years is the initial time required to establish and make a mark. 

Profit should not be the primary goal for a new business. instead, building a solid standard for the business will support and move it a long way. 

It all depends upon your business forecasts. Sometimes the incubation period is very long, may be 2-3 years or more. At times you kill competition. It all has to be related to your planned business model.

This depends on the size of the organization and the profit proposition targetted. If the organization is large, it will take more time to reach profit. it is emerging fast-track tech business break-even and proft can be reached within two years.

A new business setup pratically its impossible to define an average time for profitability because different setup will measure profitability in different ways. In conventional term it takes two to three years but doesnot necessarily mean. The entrepreneur can take an income from a company even whie it is making a loss on paper, while the investors can profit if they are paid back a fixed interest rate on their investment. 

PROFIT IS NOT SOMETHNG NEW BUSINESS OWNER SHOULD EXPECT AT INITIAL STAGE RATHER MARKET PENETRATION... PROFIT SHOILD BE EXPECTED IN 3 TO 4 YEARS OF STARTING NEW BUINESS

its not depand on time its depand on haed work planning input output idea

market feedback and most imortant you have to see your time and invest and think about wheather is will work or not then you will make a statment about time.