Take the time to make some profitability measurements and predictions - you have to know where "there" is before you can get there. Determine when you'll break even and become profitable, and you can let go of some of that anxiety and focus on actually starting a business.

Crunch some numbers to measure profitability

Your first step toward profitability measurement is to put together a cash flow projection for the first two years of your new business. Start by answering these four questions to get started on your path to predicting profitability:

1. How much cash do you have to start your business?

Determine how much money you have to start and operate your business.

2. How will your business make money?

Do some market research and competitive analysis to understand the growth potential of your business. You should have some market research on reasonable pricing for your product or service, the piece of the market pie you can expect to grab for yourself, and the growth potential in your industry.

3. How will your business spend money?

Take a look at your expenses. Think about exactly when payment is due for each expense - you're not doing yourself any favors by paying bills before they're due, since that money could be sitting in your bank account working for you by accruing interest

4. How will your business make up cash shortages during months with negative cash flow?

Build yourself a safety net or backup plan for those months when you know you're going to come up short. Measuring profitability is all about planning, and you may have already lined up additional back-up funds. No matter what the source, make sure you can spell out where you'll be getting that extra cash from, and how much is available to you.