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View Full Version : How long should it take to make a profit?



JRad
04-21-2010, 03:45 AM
I'm am wanting to start a part-time audio/visual business. I estimate that it will cost me between $4-6K to get started (equipment). It would most likely take 4-6 months to make the money back (after expenses).
My question is, is 4-6 months a reasonable amount of time to expect to get my money back? I would love to just start making money on day one but that's not going to happen.
I don't know if spending $4-6K to make an extra $1,000 a month is worth it (roughly 20 hours of work per month). I really don't want to buy myself a job. So what do you guys think?
This is not a huge investment but I still don't want to lose $6,000 and all the time it will take to set up and run this part-time business. Thoughts?

Steve B
04-21-2010, 06:01 AM
I think you need to play with a spreadsheet for a while and do some projections. Only you can determine if the payoff is worth the investment in time and money. If you play around with some projections and go out 3 to 5 years (and be realistic about your assumptions) the answer should be obvious.

If the answer isn't clear to you - then don't do it. I say this because everything costs more than you think, customers are harder to come by than you think, and things usually take a lot more time than you think.

On the other hand, if you like what you see in your projection - go for it full throttle.

Harold Mansfield
04-21-2010, 09:37 AM
I don't know if spending $4-6K to make an extra $1,000 a month is worth it (roughly 20 hours of work per month). I really don't want to buy myself a job. So what do you guys think?

This is not a huge investment but I still don't want to lose $6,000 and all the time it will take to set up and run this part-time business. Thoughts?

You are not buying a job (I've done that before) you are investing in your happiness, independence and hopefully your future.
Not to sound like an MLM pitch, but it's all a risk. No matter how many numbers you crunch and projections you make, you still have no idea if anyone will actually pay you money to do this...no one does.

But you do it because you believe in it, are passionate about it and you have that feeling in your gut that you can make it work...or if you are like me, tired of working for other people making them money.

It sounds like you aren't scared of the risk, money wise, you just want to know when you will make it back.
No one can answer that for you with certainty, just make sure that when do devote time to it, that you really devote real time in networking, making connections and marketing to get as much work as you can handle to give yourself the best shot at success.

billbenson
04-21-2010, 03:47 PM
I would think that most businesses, at least small businesses like those that are on this forum, initially ramp up slowly then gain momentum. Somewhat like the beginning of an exponential curve. Like Steve said above, play with some numbers. Some of us have spent years making our businesses into viable ones. Sometimes you can speed things up by investing more money early, sometimes it just takes time.

yoyoyoyoyo
04-24-2010, 11:27 AM
what do you mean by "audio/visual business"?

you are starting a film company?


What do you you mean by this exactly.

mcfarldr1
04-24-2010, 05:32 PM
You will make your money back eventually. What's even better in your case is that you are doing this part time, so at some point you are going to be working for almost all profits.

Best of luck to you my friend!

Dan Furman
04-25-2010, 12:34 AM
why will you only make 1k a month?

Paul Elliott
04-26-2010, 09:46 PM
what do you mean by "audio/visual business"? you are starting a film company? What do you you mean by this exactly.

I agree. Define your business more precisely. Only then can you profile your anticipated "typical" customer.

One of the most important things to consider is that you MUST be prepared to work persistently AND consistently.

Once you have defined your niche in the A/V world, diligently research your competition. Find out what they are doing wrong and right. Talk with as many of them as you can whether or not they know you are potentially going into competition.

Go where A/V people in your niche go. Pick as many brains as you can find.

If you find that there is an underserved area you might like to enter. Be VERY careful. There may be some very good reasons it is underserved with which you'd rather not wrestle.

When you have more information, return and we'll discuss the results.

Come on in, the water's fine ... but test it with your toe first.

Paul

nighthawk
04-29-2010, 10:30 AM
My question is, is 4-6 months a reasonable amount of time to expect to get my money back? I would love to just start making money on day one but that's not going to happen.
I don't know if spending $4-6K to make an extra $1,000 a month is worth it (roughly 20 hours of work per month). I really don't want to buy myself a job. So what do you guys think?


Its hard to say whether 4-6 months is a reasonable amount or not, as this is going to vary a lot between industries. Take for example a startup airline, most of those do not project making a profit for at least 3 years. 4-6 months is pretty good in comparison.

Only you can really say if it is worth it or not, but don't forget there are more advantages of going into business on your own than just for the extra earnings.

Are your costs purely a one off startup cost, or a recurring cost? If they are one off then it sounds good enough to me, after 6 months everything you earn will be going straight to your pocket, and you will be much better off than you are now. As you grow the business you will no doubt find ways to reduce your costs, and maximise income, further increasing your profit margin. If they are not one off costs, then you may need to factor those in before deciding if it is worthwhile persuing.

huggytree
05-02-2010, 02:05 PM
my initial investment was $30k+ and since i started out part time it probably took me 4-6 months to make it back too...i think some businesses dont make profit for a year or more until the customer base is built up.

what can you do to make more than $1k a month?
will this business stay part time or grow to full time?

Mike in Malaga
05-03-2010, 12:52 PM
jrad
it is all guesstimates (but it's your money)
write across the top how much income you will get (turnover)
month by month for a year, and be serious
your market research will support that (you did do that didn't you)
and allow for external factors (recession, change of technology, seasonal trends)
(not your neighbour's friendly best wishes and your mum's promise to buy two)
then underneath
write down all the expenses
purchase of goods, setting up legal, insurance, advertising, wages, heat and light etc
then calculate the difference between the two over the year
if you break even in one year well done
good luck
mike
ps there is no such thing as a part time self employed person

locnarmage
06-15-2010, 09:57 AM
I'm am wanting to start a part-time audio/visual business. I estimate that it will cost me between $4-6K to get started (equipment). It would most likely take 4-6 months to make the money back (after expenses).
My question is, is 4-6 months a reasonable amount of time to expect to get my money back? I would love to just start making money on day one but that's not going to happen.
I don't know if spending $4-6K to make an extra $1,000 a month is worth it (roughly 20 hours of work per month). I really don't want to buy myself a job. So what do you guys think?
This is not a huge investment but I still don't want to lose $6,000 and all the time it will take to set up and run this part-time business. Thoughts?

I want to do the same thing as you. I have worked as an AV tech before so I do know how to do it. I've been trying to get a job but no luck so far so I think the only solution is to make the job myself. Plus being my own boss would be awesome.

For you I would say it is very hard to predict if you would make that money back in that time. It could be possible. What kind of jobs are you doing? Small ones I would assume. Basic sound system with projection and a screen.

My old job charged 45 dollars per hour per technician, 4 hour minimum call, and on top of that charged for every piece of equipment except cables of course. So you get your money back on your inventory per rental over time plus your labour wages. When I found out the work that I was doing cost 45 dollars per hour in one way I couldn't believe they charged that much and the clients were willing to pay that much. I was also pissed about how little I actually saw from that 45 dollars.

And another job that a guy did at a family funeral charged my Aunt and Uncle 350 dollars for a 2 hour job. A job that I could have done myself and I was a bit pissed that they wouldn't let me do it. I would have saved them a lot of money. All the guy used was 2 powered speakers, a mixer, dvd/cd player, projector and a tripod screen. There wasn't even a microphone, all he did was play music and the dvd. And he did a fairly poor job of running the cables I noticed. Didn't tape them down and they needed a guy there to watch that nobody tripped over the cables. And he didn't even dress up for it. But the bill was 350 dollars regardless. And my Aunt and Uncle didn't care about the price because they wanted the service done perfect. But it was this job that got me thinking that maybe this is something I can do. I mean I wouldn't be thrilled at doing funeral services all the time but I would do it.

Obviously I have no idea what your experience level is like or whatever. I'm by no means an expert but I can do the small jobs that need to be done. I've done parties at small banquet halls where all they wanted was to play music and maybe have one microphone. In some cases you just set the gear up, show them how to use it and leave. Come back when they are done or the next day. Lock it down though. We had gear get stolen and would truly suck if you spent that money and then you lose it. I guess then you'd have to look into some type of insurance.

Well I wish you luck and I hope to do this someday myself. I wouldn't be too concerned about getting that money back because that gear you are getting are assets and so you can always use it aside for when it breaks down. But some of those mics are so durable you can throw them against the wall no problem. Not that I would recommend that.

bizjunkie
06-15-2010, 05:47 PM
Sure, working 20 hours a week just to make your money seems a little off putting, but what happens after you get your money back - that is all profit. What about if your business should take off and you are making $20,000 a month - is that better than what you make now or could make at your job?

Business is about building something long-term not just quick money.

I actually think that most businesses don't reach break-even for 18 months or so and even longer when we have a sour economy like the one now. But, that is all realitive to size of investment and cost - you could easily make your money back on one deal as you are not putting up that much.

If you really want to know how long it will take - get out there, open for business and find out. There are no rewards without taking a few risks.

Small Biz Break
06-16-2010, 10:13 AM
JRad:

Why do you want to start an A/V business? Is it something that you have a talent for and are passionate about? Can you afford (time and money) to start the business?

If you are truly passionate about the business and the investment is minimal to your cash reserves, why wouldn’t you go for it? Are you concerned it will take you away from spending your time on more profitable opportunities or personally fulfilling activities?

As others have mentioned, what is the opportunity for your business to grow? Have you done some market research to identify your focus and the opportunity that exists within the market for you?

All business is a risk. However, does your current career fulfill you? If not, are you willing to risk your fulfillment and future growth over what may appear to be a short-term limited income?

Zatch
06-22-2010, 03:33 AM
I think 4-6 months is just fine. You can just save some money while you are still in the process of getting back your money or capital. You will have the full earning of it when your investments has already returned to you. You can also exert more effort to it so that the return on investment will be faster.

Rzacny
07-23-2010, 03:39 PM
If you aren't willing to take the time to put together a simple business plan (your don't have to be John Grisham), using something like Business Plan Pro, along with a Cash flow Projection to see how the money is expected to come in---and go out.......its all a crap shoot. Take the time to look at the reality of the deal. I'm with you. I don't want to lose a dollar, much 6000 of them. I've worked with businesses that became prfitable within a couple months, and I've worked with some that tried for five years to make...but never did. There's no magic formula, nor any realiable gauge on how long it might take.