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Currently, i am investing more money into my startup than what the business is making, which means i'm currently at loss. The startup is it's 4th month! Should i be worried about this

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19 answers

It’s not something fixed, Some cases it’s normal and other cases it’s not normal. My Advise for you: - Eliminate administrative and managing wastes to reduce costs. - Try a customized marketing plan.

Report Hany's answer

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Well 4 months is still too short time to be worried about if you are making losses. Product cycle of the business says it is very normal since it will be the early stages of establishing the business, and they are however other factors to look at so that you manage your financials in the long run.

Report Odette's answer

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Hi, 6 months to 1 year is a test time. You may forsee the season, earnings, marketing may help to turn the table. Otherwise you will be repaying from your personnel savings. One thing to be noted that its difficult to get the sanction of a Loan from any Lending Institutes. So its better you work genuinely on your loss/ Profit estimates/ projections. Then only take the decision of prepay or continuation of Loan. Regards, Anjali Bende,Mumbai, India,400101

Report anjali's answer

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I would encourage you to keep going and keep the hustle strong, it takes much longer than 4 months to get to a truly profitable business model. The key is to make sure that you are honing and refining your strategy with customer focus at the core of everything you do. Look for ways to leverage digital transformation to amplify your reach and consider leveraging partnerships as force multipliers in your respective industry. Lastly, learn from every mistake and get right back at it. The most successful businesses in the world all stumbled and struggled to get going, I wish you the very best of luck!

Report Mark's answer

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Not really, I would not worry too much about that. Ensure you reduce your costs and spend only on what you absolutely need. Business is risky business, therefore you will invest more in the beginning. Losses are a normal part of business, too. If you believe in your idea, in your product /service, persevere.

I still put in more money, and time and energy into the business than I am making. It is part of the process for me. It's business. You have to build rapport and muscle for business. Every thing costs.

Fortunes will turn in your favour if you persevere and keep making tweaks along the way.

Report Pulane's answer

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Just as a GPS or map will take you to your location without having to stop over at every junction to ask for direction, a business plan can also navigate you to success. I will recommend that you develop a business plan for your business. Keep the conversation open If you need my help with this

Report Joyce's answer

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You need to look inward first. What are you investing in? Is it perishable or will it generate value in the long run?

Then, why is this not giving me my expectation?

If the problem is not known, solution can not be provided

Report Amos's answer

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It is normal for a business startup to have losses even in its first year. As you try to grow customers you may likely spend more than you make initially.

I will advise you keep track of your expenses so you can do a monthly review and find out where you spend money without getting requisite value in terms of income. Sometimes you will find this helps in more efficient allocation of resources.

Report Chuks's answer

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Not yet time to panic, it's certain or normal for startups to have losses at the genesis of a few months. Just look back at your plans while learnng from your mistakes. Cheers!

Report Wazobia's answer

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Four months is considered to be a very small period of time for a business to prove its profitability, there are a lot of businesses who took a couple of years before establishing their name in the industry they operate. It is quite normal to be in loss during the first months of your business and actually this is something we take for granted when we do budgeting for a new business, BUT in your case, there are 2 factors to consider in order to decide if you need to be worried or not:

1) The level of the loses expressed as a percentage of your business' equity 2) If we suppose you keep being on loses, how many months you can survive before running out of equity. 3) The level of the loses expressed as a percentage of your debt (if there is any)

Report Dimitrios's answer

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Hi! In my experience I would say it is still to early to conclude anything, I have been in your position wondering if this is normal, but it is. I am into my eight month of running the business and at this point I have only managed to break even. So don't worry just try to find strategies to reduce your costs but remember not to compromise the quality of your product/service. Also work out to get more clients that will increase your revenues . Best of luck

Report Mwajuma's answer

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Yes, especially if the funds being invested are being done on an ad-hoc basis or not in line with a financial plan/projections. Did you carry out a feasibility and/or prepared a business plan? Did you prepare a budget or projected cashflows? On the other hand, no (you shouldn't too be worried) if you prepared/documented financial plans and/or projections. Is the variance (actual vs projected) larger than anticipated? (in your plans). So, its either you get help in preparing projections and crunch your numbers or go over your projections (if previously prepared) and crunch your numbers.

Report Ejiro's answer

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Well it's still the early stage of your business. Entrepreneurship is not a days job and it starts with alot of funding sleepless nights and all before you finally hit it. So see this phase as a time you need to give it everything, but if you think you are spending too much ,then make a record of the most important part you need to fund first and start with that. But this phase is actually normal, no need to be worried, it will pay up soon by God's grace

Report Ninilola A's answer

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Report Rev Dr Gerald J's answer

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Hi, As an entrepreneur, you don't get worried easily with your starting point. To be a great entrepreneur with the aim of growing your business into an household name, your attention shouldn't be at what the business is bringing as early as now. It is important you invest in it first before your investment starts yielding. So don't be worried, be focused and ensure you cut away unnecessary costs.

Report Eyinjuoluwa's answer

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Congratulations to you on your start up! You have taken baby steps, you should also give it time to thrive. As everything takes time, so does your business too. Don't be in a haste to make money, get your accounting right, audit from time to time. Have a financial record and if possible employ the service of an accountant or financial analyst and if you can't afford it at the moment, there are Apps that can help you with simple book keeping records which would help you find out if you are making a profit or a loss, and how much money you need to put into the business. I wish you success on your new business. Before you can determine if it's what the effort you would have to give it between 6 to 12 Months. Good luck.

Report Chidinma's answer

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