All business survives on net profit.
In accounting terms, here is how you calculate Net Profit. i.e. (Total Business Revenue) – (Total Business Expenditure) = Net Profit
In the business world, there are two types of industries Service and Product.
So if you are in the service industry, you survive on a paycheck by paycheck or hourly charges to the client. You have to work every hour of every day to make ends meet.
But if you are a product company, you create a product based on your market and user research. You find consumer problems/requirements/gaps in the market and then try to solve them by creating your product in that category. So building a product is based on solving problems that your users are having.
In my case, I was a designer by profession. I graduated with a BFA (Bachelor of Applied Arts) in Advertising. After my first two jobs, I tried freelancing in the web, UX, print, branding and animation film industries. I was the lone proprietor of my business. I was doing everything talking to clients, executing a project, delivering it and then waiting for the final payment to be released. It was too much for me at that time.(more…)