Does a startups really need to be profitable?

With numbers of startups that are rising, there are also numbers of startups that are falling. It is frankly speaking easy to build up a startup, as information technology become advance, so does the way of building up your own company. As the result, lots of startup has leveled up their business from a merely ”profitable startups” to ”unicorns”.

 

Programming languages become simpler, and its distribution becomes cheaper and faster, so starting up a company only need a name that pops up in your head and several click on the internet…and voila your company is exists !!!.

 

However, there is a debatable discussion among entrepreneurs whether being profit is actually the things that you really need to care about, when your enterprise is still in the formative stage.

 

There is a healthy competition between profits and growth. When you are spending in new talents, you may see a growth, but not necessarily a profit. Spending more budget on sales people means you will getting more clients, but does not necessarily more profit (cause you need to pay these sales people basic salary plus their commission! ).

 

Even so, at the end of the day the reason for you to build your company is for sure to get a profit. Your stakeholders as well as your talents inside company will be loyal for you when you can give what they needed, and it all comes from the profit. So why you should care for your profit?

 

First and foremost, profits for sure give you more time and flexibility. Being profitable buys you the ultimate luxury, a time. It is the ultimate flexibility. As long as you can keep up being profitable, you can do whatever you want, go to different direction, and testing out different ideas. When you are unable to keep cash in, you will need to get more money from other party. And by having owe to these new investors meaning they own your time, your flexibility.

 

What makes people these days building a startup? Independency. Being independent is letting out your ego to move around freely. However, while ego shapes you into a distinctive individual, it is not always the case. Yup one time your ego one time tells you to stand out on your won, but other times it will just tell you to do lots of things without thinking ahead.

 

As starter in your startups, you tend to want things fast, growth and profitability. You complicate the business by doing all sorts of things, but you lack of control. Profit keeps you in guard, you watch your spending. Profits creates border and reality to keep you healthy in the business.

 

Talking about fight between growth and profit? When your startups making money, it will sure open the door for you to get more access on the growth. Whether getting more talent, expanding your business, or just simply reinvesting will be baby steps for your startups. See Facebook as an example of how being a profitable business can open their door to the other business. Their success in Facebook has allowed to acquire Instagram. These two social media platform leverage its business not only as a personal social media tool, but also as a branding platform for almost every type of business in the world.  Now Facebook and Instagram are the two biggest social media platform in the world.

 

The question of whether a startup should focus on profits or growth will be always debatable over a long time of businesses, even after you pass the stage of being startups. In general, profits are usually maximized when expenses are reduced, but this can hinder growth. A great way is to make sure everything that you work for is for the aim of profits, while at the same time giving space to grow. So, spend time developing a cost-effective strategy that allows your company to be a profitable business that carrying a growth as its business’ golden key.