Why “It Takes 5 Years to Turn a Profit” Is a Dangerous Myth
If you’ve ever heard someone say, “Don’t expect to make money for at least five years,” you’re not alone. This belief is so common it’s almost folklore in the small business world. But here’s the truth: waiting five years for profit isn’t just unrealistic—it’s often the kiss of death. Many small businesses never get there because they run out of money long before the five-year mark.
The Hard Numbers
Let’s look at the data. According to Statistics Canada, nearly half of new businesses don’t survive beyond their fifth birthday. In Alberta, the pattern is the same: thousands of small businesses close each year, and financial strain is the leading culprit. Monthly business closure data shows that the churn of openings and closings is constant—entrepreneurs can’t simply afford to wait years to see returns.
Why the “5-Year” Belief Is Misleading
The myth likely comes from stories of venture-backed startups or large corporations that take years to scale before turning a profit. Those companies have investors with deep pockets, buying them time. Most small business owners don’t have that luxury. When your capital is your savings, a line of credit, or maybe family support, every month without profit is eating away at your runway.
The reality is many businesses fail because they run out of money, not because they didn’t have a good idea. Treating “five years” as a rule of thumb is more likely to land you in the failure column than the success one.
How to Build a Plan for Early Profitability
Profit doesn’t have to be a far-off dream. With the right planning, you can design your business to become cash-positive far earlier than five years. Here’s how:
Run a feasibility test before you launch.
Validate your pricing and demand quickly.
Protect cashflow.
Set profitability milestones.
Stay flexible with costs.
Have contingency plans.
Track weekly.
The Bottom Line
Believing you need five years to make money is a myth that sets businesses up for failure. Unless you have deep-pocketed investors, you don’t have that kind of time. Build financial feasibility from day one, and profit becomes a milestone you can hit early—not a distant dream. If this sounds overwhelming. That is okay, Reach out and lets have a chat about how you move your business from being in the red into the black.