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Entrepreneurs obsess with growing big.

They obsess with the number of users, number of sign-ups, number of registrations, number of followers, number of branches all over the country or continent.

They adopt the attitude of “If we build it, they will come.”

Seldom do they talk about profitability.

It is assumed that if we can grow big, we will be profitable.

This thinking is erroneous because there are big businesses that are not automatically profitable due to their sheer size.

There are a number of small businesses that are profitable.

Profitability is not a function of size. 

Prof Clayton Christensen in his book The Innovator’s Solution: Creating and Sustaining Successful Growth says:

The best money during the nascent years of a business is patient for growth but impatient for profit.

What he is basically saying is your business model better be making money, fast.

Many startups focus on acquiring as many new users as possible, only figuring out later how to convert those users into revenue.

There is no time for such a strategy in this market. You will run out of money before you get there.

Focus on sales, on cash flow, on profitability while you are still small and once the business is profitable, then grow it.

Be impatient for profitability but patient for growth.

Chasing growth before profitability hoping that once you are big you will be profitable is like saying I will only be happy when I’m a millionaire.

You need to be a happy person now with or without millions.

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