How to Project Start Up Profits in 5 Easy Steps

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These 5 easy steps to projecting project start up profits is a great way to  launch a new product or even start a business. Read on for the 5 easy steps and then get planning on that next launch!
How to Project Start Up Profits in 5 Easy Steps | Small Business Accounting and Bookkeeping | MazumaUSA


In today’s world there are dozens of great ideas. So why is it that many crash and burn or don’t even make it out of the starting gate? Some experts will say that it’s luck, or claim that the business mojo of the entrepreneur responsible is unmatched – and all that may be true, but as accountants we like numbers, and we tend to rely on them to tell the real story. We believe that raw talent and business savvy may contribute to the success of a product launch or business, but we also know that a well-laid plan, that’s research and numbers based, will provide successful results you can be sure of.

Step 1: Knowing Your Odds & Setting a Projection

We’d all like to make a million dollars right out the gate, and it does happen from time to time. But when it comes to projecting project start up profits we’d recommend being a bit more realistic. Unrealistically high projections often lead to burn out and over-saturation in the market. You want your product to have longevity rather than looking like the newest fad that will come and go.

You’ll also want to stop and think about what those super-amped projections will actually cost you when it comes to operation and production expenses.

Our recommendation: Set a reasonable projections and look at the longevity of the larger goal. There’s no hard and fast rule on what “reasonable” means but keep in mind expenses for production, operations, marketing, etc.


Step 2: Look to the Industry Averages

Do your homework. If you’re writing a business plan you’ll need to research a bit and see what other businesses, comparable to yours, are faring. Finding the averages can be accomplished by doing a simple web search. Don’t be afraid to project higher than the industry average, but make sure you have solid reasons as to why you’re doing so.

Our recommendation: Keep your reasons for your projection top of mind. Write them down and review them frequently. Include them in your business plan or presentation to potential investors. It will keep you grounded as you move forward and it will keep you focused on what you’re trying to achieve.

Step 3: Give Yourself Time to Break Even

Generally, no one can make a bundle of money overnight. It takes time for a new product or business to catch on and spread. When you’re looking at your break even point, be optimistic but cautious. Give yourself time to make up the capital you’ve secured from investors or that you’ve invested yourself.

Our recommendation: Give yourself levels when setting your goals on breaking even. Aggressive, Moderate, and Successful levels will help give you the drive you need to keep going, but it will also provide you with a flexible perspective in case things don’t happen just as you planned. Note that our levels are all “successful”, they’re just based on the longevity in which it takes to break even.

Step 4: Understand the Competition that Exists Between Profits & Growth

Making more money means you’re growing. But making more money also means that you’re going to spend more money to cover production, services, and maintenance for your company. Understanding this, helps you balance out how fast to grow and keeping it top of mind when deciding on strategy will help you make the wisest choices.

Our recommendation: Taking a brief look at your books prior to making growth strategy decisions will be a huge help in balancing the competition that exists between profits and growth. You’ll also want to keep in mind that growing takes extra time as you bring on and train new staff, start new production channels, or introduce new marketing tactics.

Step 5: Ensuring Success by Putting the Right Pieces Together

You’ve probably heard big-time entrepreneurs saying something like “it all just came together” when recapping a successful product launch or a new venture.  It’s the truth, but it seems a little bit more magical than it probably is. That’s because it’s a simplified version of what probably took lots of hours and expertise on the parts of many people. The best entrepreneurs know that putting the right pieces together helps make successful ventures – they’ll use those same pieces in a variety of ways for the  next launch as well. Fine-tuning and problem solving is something that entrepreneurs are constantly tinkering with and it brings good results and even better dividends.

Our recommendation: If you’re just starting out, find a mentor or ask someone who’s doing something similar questions about their business. They’ve got hands-on experience that could prove to be useful. If you’re working on something new and you’ve already got a successful business, consider looking at what worked well in past launches and what might need to be improved. Post-mortem notes can prove to be some of the best places to look for “right pieces” and can help in simplifying the process of your next launch.


How to Project Start Up Profits in 5 Easy Steps | Small Business Accounting and Bookkeeping | MazumaUSA

Ben Sutton

Ben Sutton

Ben Sutton is the founder of Mazuma USA, an accounting firm providing tax, bookkeeping and payroll services to small businesses. Since founding Mazuma, Ben has established himself as an expert in the small business world. He’s still driven by that same desire to provide accounting help to all small businesses – from photographers, bloggers and creatives to lawyers, doctors, and dentists, everyone needs affordable accounting help. Ben is a Certified Public Accountant, and a member of the American Institute of Certified Public Accountants. But Ben considers his greatest achievement and credential to be his happy wife and four children.

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