Question

Is it reasonable to expect that all new businesses will have a net income from the first month's operation? From the first year's operation?

Answer 1

1. Any type of business which is entering newly into the market should not expect any profits in the beginning of its Operations, it is not at all reasonable.
2. Let us take an example of entering into a new house, where you will have to incur a lot of expenses in the beginning stage, thereafter the expenses will be reduced gradually.
3. Similarly in the business also, we can't expect profits especially during the beginning stages of the business.
4. This is because, our product to reach the customers might take time because there are already a lot of competition in the market. At the initial stages inorder to get a good customer base, we should offer our product for less cost, even less than the cost incurred by us. And we should also spend a lot in the marketing of our products.
5. So it is highly not practical to expect profits in the first month of entering the market, during the first year there may be profits to some extent.
6. And there may be situations in cases where the product is unique and very new to the market, in such cases profits will be very high at the beginning stages.