New Business? Here’s Your Moneymaking Timeline
Have you ever signed up for a job without knowing when your first paycheck would be?
Because that’s the reality when building a new business from the ground up.
Taking the jump of building a new business is frightening because of the elephant in the room: the first paycheck and when it’ll be in your hands.
The first paycheck is symbolic because it means that the business is viable, that it’s selling a product or service that people want, and that hopefully, there will be more paychecks.
During the early stages of building a startup, it’s difficult to predict when you’ll gain enough traction to have a sizable amount of revenue flowing into the business to pay yourself. Although there’s no definite answer as to when a business will start bringing money in, there is a loose, expected timeline that I can share according to what you’re selling.
Take all of these timelines below with a grain of salt, and the understanding that the required foundation for all of these timeline projections is full-time effort, a solid marketing pipeline pumping continuous leads to your business, and a sales-forward operation. There are plenty of external scenarios, social boosts, market trends, etc. that can speed up or slow down these timelines according to your startup’s specific circumstances.
Moneymaking Timeline: Immediate
Selling services such as consulting and other skill-based (bookkeeping, writing, design, to name a few) deliverables can provide an immediate moneymaking return even with only a small investment in marketing and sales.
Since many service-based contracts lock service providers to weeks or months of work, a substantial amount of revenue can be secured even if you close only one contract. Service-based businesses also typically have low expenses due to a lack of direct costs (other than labor) associated with creating the “product”, further accelerating their ability to reach their revenue or profit goals. Plus, there’s no added pressure to hit mass scale since many service-based businesses can generate substantial revenue from just a handful number of accounts.
With a service-based business, you can set up shop, promote and sell your services, and start bringing substantial revenue as soon as you make your first few sales.
Moneymaking Timeline: 6 months — years
Digital products can consist of courses, e-books, and any other digital products that are digitally delivered to the customer.
Selling digital products in volume is much harder than most entrepreneurs realize. A solid marketing and sales strategy for a digital product always requires a sizable audience at the start of your marketing and sales funnel. Digital products absolutely cannot be sold without an audience, and nailing down how to build an audience for your digital product is a large part of the entrepreneur’s challenge.
Figuring out the formula to build your brand’s audience, and building a large enough of a starter audience (1,000+) is the foundation of gaining some traction on selling your digital products consistently, every month.
If you decide to build an audience with little to no financial capital, and you rely on spreading your brand purely through social networks and other organic / low-capital methods, your moneymaking timeline will be delayed by about 8 months — 2 years.
If you speed up the process by putting in substantial financial capital ($1K+ / month), you’ll be able to speed up your moneymaking timeline and see traction as soon as 6 months.
Moneymaking Timeline: 2 months — years
Physical products can be a complete nightmare to sell in volumes if you limit your sales efforts to behind a computer screen. In my experience, selling physical products quickly requires hitting the pavement and knocking on some doors.
I’m a huge fan of speeding up sales efforts for physical products by seeking out multi-day selling opportunities where the brand can sell their product to thousands of their target customers — this means music festivals, conferences, retreats, and other large congregation events.
I especially love this sales channel for startups that are still in pilot mode and are seeking proof of concept — you’re able to put your product in front of thousands of warm leads for a sliver of the price of setting up and running an online marketing campaign.
If you participate in large congregation events or other sales channels that enable your brand to market and sell its products to thousands of shoppers on a frequent or semi-frequent basis, then your moneymaking timeline can be accelerated to as quickly as 2 months (if the fit and efforts are successful).
If you have trouble nailing down this sales channel, your moneymaking timeline can be delayed for years until you figure out what your substantial and consistent sales channels are.
Investment vs. Bootstrapping
Moneymaking Timeline: 4 months — years
Seeking investment is a popular route that entrepreneurs take to speed up their moneymaking timeline. With substantial investment, a startup is able to immediately invest in the needed marketing and sales plays to generate revenue.
For the well-connected, a startup can get investment through the door and potentially start generating revenue within months if they act quickly.
If you’re not in any particular rush and want to build your startup without investment (and giving up equity or taking on debt), bootstrapping may be the way to go.
Bootstrapping may delay your moneymaking timeline by a year or more, but it will allow you to gather the knowledge to overcome any challenge — from how to get your target customer to organically find your brand, how to sell when numbers are low, and how to recover when sh*t hits the fan. The myriad of scenarios and challenges you get to experience via bootstrapping is incredibly useful for startups who are looking to stay in operation for the long-term.