What Makes a Business Profitable? Key Factors You Should Know
- Akino Davis
- May 25
- 4 min read
"Becoming An Entrepreneur: Beginner's Guide"
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If you missed last week’s edition, we explored The #1 Mistake Professionals Make When Choosing a Business Idea, and the response was incredible. This week, we’re continuing the conversation because once you've chosen your idea, the next question becomes, will it be profitable?
Let’s be honest, your biggest fear right now is probably this: “What if I pour time, energy, and money into a business that never makes enough to replace my salary?”
You're not alone. I remember that fear well.
When I was planning my own transition from corporate to coaching after years managing projects, facilities, and operations, I wasn't just worried about launching a business. I was worried about sustaining it.
Would I make enough? Could I do this full-time? Or would I have to crawl back to the 9-to-5?
Let’s break down this fear and the real answer to what makes a business truly profitable.
The Real Problem: Mistaking Busy for Profitable
Many professionals make the mistake of launching a business idea based only on passion, skill, or popularity but ignore profitability indicators. And that’s dangerous.
Here’s the problem I see often: You build a brand. You market it. You sell something. But despite all your effort, you barely break even. Or worse, you lose money.
It’s not because you’re not talented. It’s because you never assessed profitability before building.
The Usual Advice (and Why It Fails)
If you’ve Googled “how to know if a business is profitable,” you’ve seen things like:
“Follow your passion.”
“Build a product, then find a customer.”
“Just start! The money will follow.”
Well-meaning advice. But also incomplete.
The reality is, many businesses fail not because of lack of effort but because they never aligned what they wanted to sell with what the market is actively willing to pay for at scale.
So, What Actually Makes a Business Profitable?
Here’s what I’ve learned from coaching transitioning professionals and from launching SME Digital myself:
1. You Solve a Real, Costly Problem
Profitable businesses solve a clear pain point that customers are actively seeking solutions for. And ideally, one they’d pay well to fix.
Ask yourself, “Is this a nice-to-have or a must-fix-now?”
2. You Charge Based on Value, Not Time
High earners don’t trade hours; they package transformation. That’s why I teach my clients to stop undercharging and start positioning their services for value.
For example, I didn’t price my coaching based on time. I priced it based on the business clarity and confidence it gave clients.
3. Your Offer Can Be Delivered Efficiently
If your business model takes too much of your time, or it can't be systemized or scaled in some way, it’s harder to grow profitably.
Look for ways to productize, systematize, or delegate parts of your service.
4. You Know Your Numbers
Profit is not just sales; it’s what’s left after costs. Many first-time entrepreneurs don’t track margins, expenses, or breakeven points.
You must know what you need to make and how much each sale contributes to that.
How I Applied These in My Own Business
When I launched SME Digital, I didn’t just start coaching randomly. I asked:
Who do I want to serve? (Professionals in transition.)
What’s their biggest problem? (Clarity and confidence to start.)
What’s that worth? (More than just the hours. It’s life-changing.)
That’s why I designed my offerings from the Business Plan Service to the Becoming An Entrepreneur Coaching to be positioned for both impact and income.
Every product I offer solves a real pain. And it’s priced to reflect the transformation, not just the time.
Profitability Is Intentional, Not Accidental
You don’t stumble into a profitable business. You design it from the start.
You validate your offer, test your pricing, monitor your margins, and set up your business to scale.
When you do that, you remove so much of the uncertainty. You stop working endlessly “hoping” to make enough. You know your numbers. You focus on what moves the bottom line.
Final Thoughts
If you’ve been wrestling with the question, “Can this business make enough to support me?” Don’t guess. Build with profit in mind. Here’s what you can do intentionally:
Solve a problem people pay for.
Charge based on value.
Design for efficiency.
Know your numbers
That’s what separates side hustles from sustainable businesses.
Ready to build a business designed for profit before you quit your job?
Then subscribe now to the Becoming An Entrepreneur Newsletter for weekly articles, strategies, and personal insights at www.smedigital.biz/blog
Let’s build your business the smart way, which is from clarity to profit.
Whenever you are ready, there are more ways that I can help you:
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