Ramen Profitability
Do you have aspirations of becoming a billionaire like Bruno Mars? You may not get there on ramen…
Definition: Derived from ramen noodles (known as the cheapest “meal” available) to describe a startup company that does not need to raise money to survive
Traditionally, startup businesses become successful after a significant amount of time and money is spent. This is no longer the case when you consider the thousands of businesses that are created virtually and on a shoestring budget in a matter of hours. Businesses that are “ramen profitable” usually begin making money within months, but you many not see the founders on the cover of Forbes Magazine. They make just enough to cover living expenses.
Starting a business this way can be tricky but it does have its advantages:
- Your humble beginnings are appealing to investors – because you are able to keep expenses low, and you already have an established product that the people want/need (and are paying you for).
- You focus on building your company, not raising money – when business owners are constantly worried about the bottom line, it can be terribly distracting to progress. Your business can grow naturally by taking the time and effort to improve your product and inner workings of your business so you can work towards your long term goals.
- You’re no longer at the mercy of investors – previously, if your business was losing money, eventually you’ll either have to raise more or shut down. Once you become ramen profitable, this painful choice goes away. You can still raise money, but you don’t have to do it immediately.
What could you do to adopt a ramen profitability approach for your business (if possible)?
