The Fastest Time To Profit

Here’s how long it took some of the

world’s biggest brands to turn a profit...

Ever wondered how long it takes a company to start making money? With our favorite companies reporting record revenues each and every year, how long did it take them to build up their company to this level? Despite huge revenues, in reality, It can take many years for even the most successful brands to actually turn a profit.

This is largely due to investment expenditure. Companies that plow all their earnings and outside investments back into their company can “lose money” each and every year. This is because, technically, they are spending more than they are making. However, this investment later sees the company grow into something far greater.

So, how long do companies prioritize growth over profit? That's for each company to decide. There are some companies that spend years and years growing without turning a profit, compared with other companies that can create a profit in their early years and still divert money to research and development.

Spend analysis is one of the keys means through which a company can track their revenue and profit. Spend analysis involves taking account of all expenditure within your company and how this spending has changed over the last year. This is important in calculating profit and profit is what income you have left after you account for all of your expenditure. Expenditure doesnt just include buys raw goods or paying salaries, but investment into your company is all a spending, and can be quite expensive too.

So where do the world’s biggest companies stand, and how long did it take them to turn a profit?

The Fastest Companies to Turn a Profit

It was the older and well-known tech firms such as Apple and Google that were those to turn a profit quickest. This is potentially due to a lack of competitors at the time, compared with the rapidly expanding tech industry today.

1

Ford

5 months

to turn a profit

After a falling out with his financial backers, Henry Ford abandoned his initial company, the Henry Ford Company, and went into business with an old acquaintance. With the help of a number of big investors, Ford created the Ford Motor Company in June 1903. By October, the company saw its first profits.

2

Apple

2 years

to turn a profit

Back in 1976, at the beginning of Apple, the company produced and sold one product, the Apple I. The Apple I initially sold just 200 units, but it was enough to keep pushing the company forward. The Apple II was released in 1977 and by 1978 the company was pulling in its first net profit, just two years after it was founded.

3

Intel

3 years

to turn a profit

For it’s first few years, Intel made hefty losses each year. It wasn’t until the creation and release of the DRAM, the first first commercially available dynamic random-access memory, in 1970 which led to Intel’s first ever recorded profit by 1971.

4

Alphabet / Google

3 years

to turn a profit

It took Google an additional year to become profitable. Founded in 1998, it wasn’t until the introduction of Adwords, a credit-card-activated self-service ad program, in 2000 that led the company towards its first quarterly profit a year later at the end of 2001.

5

Meta / Facebook

5 years

to turn a profit

Facebook, now Meta, took five years to reach profitability. Founded in 2004, Facebook grew quickly being initially targeted to university students at Ivy League colleges. After opening to everyone over the age of 13 in 2006, Facebook turned its first profit in 2009.

The Fastest Companies To Turn A Profit

Some companies, such as Dropbox and Tesla, waited over a decade before turning their first profit. Tesla spent 17 years unprofitable, largely due to burning through tremendous volumes of money in order to grow. Tesla was driving new and advanced technology, electric vehicles, and had the backing of a very wealthy founder with seemingly endless pockets (Elon Musk, currently one of the richest people in the world).

It doesn’t matter how big the company is, no company can be entirely self-sufficient. Every company relies on other suppliers for the procurement of goods and services to manufacture their products or fund their internal operations. This can come at a hefty price. Amazon, one of today’s biggest multinational companies dominating the e-commerce industry, only turned its first profit nine years after being founded. Amazon even experienced a phase of having to close down distribution centers and lay off a seventh of their staff in order to remain their operations.

Many companies, especially in their early years, chose to spend more on research and development and growing their company. So, which of today’s brands are still on the uphill road to profitability?

Company

Founded

First Profit

Years to Profit

Current Revenue (Billions)

Companies yet To Turn A Profit

Epic, creator of Epic Games and known for the incredibly popular Fortnite among other titles, was founded way back in 1991 and has still yet to turn a profit. In recent years, Epic has been engaged in a legal feud with Apple. As part of this, Apple’s lawyers released a full shakedown of just how unprofitable Epic is, quoting yearly losses of between 100 and 200 million dollars between 2019 and 2021. This is, however, another example of a company investing serious money now with the hope of future growth, and Epic is determined to build their Epic Games Store to Rival Apple’s App Store one day.

Reddit, founded in 2005, is still focused on growth instead of profitability and has never reported an annual profit. Reddit has, however, begun heavily investing in the ad platform, which may see the company become profitable as soon as 2022. Ads and premium membership plans are the primary methods that Reddit uses to make money, however, have historically not been a focus of the platform until recently.

Investing in a company is a strategy used by almost every company wanting to grow their business. Investments often surround the improvement of products or services, but can also be directed at reducing production costs or spreading brand awareness.

Company

Founded

Current Revenue (Billions)

Methodology

We looked at the most popular and well-known brands and explored their founding year and their first profitable financial year. All of the data was sourced from publicly available websites and full sources can be viewed here.