# How much profit does it make for most new businesses?

While it is possible that your new business can be an instant cash machine, several business publications recommend you provide enough money to support your company and yourself for six months. In most cases, Kiplinger Magazine states that the sooner you make enough profit yourself to pay, the more prepared you are. Careful financial analysis can give you a good idea of ​​how long it will take before Black.

Break down and analyze

Even analytics is a method of determining the profitability of your proposed business. Draw your specific cost estimates such as office space, utilities and insurance; Proceeds from the sale of goods or services; And the gross profit of each sale after the sale is reduced. Divide the gross profit by the total sales price and you get a percentage of the gross profit. Then the percentage of gross profit is divided into fixed costs.

Timeline

Your fixed costs are \$ 5,000 per month and your profit percentage is 25 percent, for example, divide .25 into \$ 5,000 and you get the point of even breaking \$ 20,000. This means that when you earn \$ 20,000 a month in revenue, your business even covers its costs and covers its costs. You will become more profitable than this. If you see more than \$ 20,000 five months after your business plan opens, then you will start to make a profit.