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Why is it important for startups to earn profits in initial days

Why is it important for start-ups to earn profits in initial days

There always been a healthy competition between profits and growth of the business. In today’s financial period growth of businesses needs resources and funds may not be available for the initial period of 6 months or even a year. Thus it is very important for the start-ups to earn profits in initial days. 

Following are few reasons for earning profits

1. Business Improvement: In the initial days of the business, whatever the start-ups earn they spend it in reinvesting. It is a common practice of almost companies and a particular start up is not an exception to this. The main purpose of reinvesting is to have a sound strategy and not just to devote a certain percentage of the profits of the company. Company’s reinvestment efforts should be in accordance with the current strategic plan.

2. Marketing: Digital marketing is considered as the smartest investment of profits, if done properly. It is generally seen that the most of the start-ups take up to several months before they do any investment into marketing. It could be due to lack of knowledge regarding the operation of the business. It is always advisable to keep track of all the campaigns and monitor them accordingly. If the company lacks marketing skills, then it should opt for outsourcing to an agency.

3. Invest in the team: Setting up a better workforce will smooth the business operations, improve productivity and helps in creating a company culture that will ultimately attract hard workers. The profits should be reinvested in human resources initiatives which involve training and education. With the growth of the company, it can further expand to include benefit packages and other discounts. It should be kept in mind that hiring a new employee costs a lot of money, it could be about six to nine months of a lost employee’s salary, on average.

4. Invest in own start up: A part of the profit is needed for itself in subject matter expertise. For example, start-ups are mostly headed by people with a perfect eye for innovation but lacks in managing people. This is the most common criticism faced by the founder of start-ups. If the people don’t come from a formal business background then classes on management or basic business operations stands invaluable in such case.

5. Hire help when needed: It is very important to recognize when the business need help and ask for the help immediately. New hires can turn out to be fruitful in such a situation as they can provide the technical skills and know how to enable your operations running smoothly. This turns out to the best investments that a start-up can make in the long run.

6. Consider professional consultancy: If the business management is unsure regarding the creation of the strategic plan, then it is advisable to use some profits in order to take the consultancy of the professional. These professionals can provide expert guidance regarding executive leadership, developing an effective business strategy, conversation with the investors and handling conflict among employees and likewise any other matter.

7. Outsource your least important tasks: It is always advisable to outsource the least important task in the business. This will facilitates the business and its management to focus on more core and areas of prime importance. Dreaded tasks can be outsourced to the third parties who are qualified and to whom task can be easily handed over.

8. Improvement in SEO: Firstly, if a startup is launched without a website, then it should get it created on priority basis. Secondly, adequate amount of time, money and effort is required in order to get the website to the top of the Google’s search engine result pages. Search Engine Optimization is a tricky beast but the same can be done by someone qualified, so it can be outsourced to get it done.

9. Create a cash buffer: Reinvesting in own business is necessary but make sure that enough case is available to tackle the problems that may arise. Business insurance policies will cover the disasters but it is always advisable to have liquidity available when needed.

10. Don’t diversify too early: Most of the start-ups make the mistake of diversifying their investments too early in the process. Stocks and bonds are important but building your empire is equally important. To invest your early revenue start with what you know and in what you are skilled. No one is aware of your business like you are, so it seems like the easy place to start with.


To wrap up many operating a business to make money in the early days you should have an exclusive commercial vision and hard work. Also the business product you choose is also very important. As long as you choose a correct business it would be like making money from founding to profiting in short term. It’s wiser for you to choose some innovative and huge-demand products to accomplish the objectives.

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16 May

NeuSource Startup
Akash Rai

"Any time is a good time to start a company.” Neusource indulge in providing business consultancy services which help startups to accomplish their desired results as a TAJ EXPRESS. If you’re passionate about something and you work hard, then neusource is the right choice for you.