Will your product ever become profitable?
If it will not make you rich do not do it
This was the advice given my boss when I told him that I wanted to quit my job to pursue my bootstrapping carreer.
We all know that being rich is an abstract concept and its definition varies from person to person and country to country. However, this short advice does not mean that we should focus solely on the money but at the end of the day, if I want to succeed living from my projects, they will have to pay the bills.
We don’t have to necessarily be making money from day one, but one should already have a plan to monetize the business and how many paying customers are needed to break even.
Doing this planning exercise helps me determine how realistic my idea is. There are many tools that will quickly help you to determine the break-even point but one that I like to use is this breakeven point calculator.
We just have to input our fixed and running costs and the selling price and let the tool crunch the numbers.
In the end, it will be able to determine how many units need to be sold to break even. Calculating this early on it allows me to visualize the size that my business will have to become profitable. And I have to say that I have killed many of my ideas because were simply not viable in the timeframe I was looking for.