New businesses generally take three years to make a profit, but most entrepreneurs do not believe that rule applies to them. They do not project the funds that will be needed until the business begins to make money. Entrepreneur David Jorgensen grew Katun Corporation, founded in 1979, to a $350 million enterprise by 2002.
In the mid-1960s, David Jorgensen and a friend who worked for The McGraw-Hill Companies came up with a great idea. They would publish college textbooks in their spare time. While the idea was sound and their efforts sincere, their execution did not match their enthusiasm. Mr. Jorgensen’s next startup, Computer Synectics, succeeded admirably for more than a year, to the tune of more than $1 million in sales, but became the victim of competition from larger companies like IBM, always a threat for any company, particularly a fledgling. A plan finally came together to perfection with Katun Corporation: the right partners with the necessary skill sets, hitting the market at the ideal time with a valuable product.
Just as constructing a sturdy house requires first creating a good foundation, building a new and successful business necessitates considerable research and work prior to opening the doors. Before you even think of trying it, have you truly identified a niche? Katun Corporation helped introduce the aftermarket in office products. Are you introducing a new product or service or one that outperforms the existing commodities? Entrepreneurs such as David Jorgensen are risk takers. Are you? Can you face the blank page?