Tech Company

How Profitable Is A Tech Company? (Updated for 2024)

Pat Walls

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Updated: October 5th, 2024

How Profitable Is A Tech Company? (Updated for 2024)

So you want to start a tech company?

And the first question that came to your mind was, “well, are tech companies actually profitable?”

Especially considering:

You could start a tech company with as low as $50
Based on our data, tech companies generate an average of $7.47M per year
You could see gross margins as high as 90% with tech companies

There’s money to be made. Don’t worry.

But, I don't want to spoil it all. Below we’ll cover everything you need to know when it comes to the profitability of a tech company.

Let’s dive in!

Is a tech company profitable?

Yes, a tech company is generally a profitable business. However, you still need to consider several factors since these things always impact the overall outcome.

For instance, since average revenue is $7.47M per year with an estimated gross margin of 82%, you could expect to recover your investment within 12 months or even less.

But of course, it all comes down to how much you earn compared to the potential revenues of your tech company.

To determine whether your business is profitable, you should earn more than your expenses in the beginning months. However, while you're in your first month, it can be challenging to know what to expect.

Therefore, you should maintain a record of your monthly expenses and income to determine whether you're meeting your goals. By doing this step, you can see how your tech company is doing and if any changes or adjustments need to be made to enhance or maintain your efforts.

Is a tech company worth it?

If you’re wondering if a tech company is worth it, the answer is a big YES. With tech companies, you have the potential to earn $7.47M per year (this is based on data reported by real founders).

Further, you could have your initial investment back within months. Simply put, it’s a business worth a shot, especially if you have the resources and make the necessary efforts to achieve or surpass the target.

With a market size of $, it will be possible for you to build something that grows and turns into a flourishing business. As such, it’s the type of business you might want to consider starting.

Of course, you must learn and understand every aspect of running a tech company to ensure success. Still, as long as you have the initial investment and can endure a few months before your actual gains, this business could be worth it.

You might want to consider reading more specifics about successful tech companies case studies.

Examples Of Profitable Tech Companies

Here are a few examples of profitable tech companies, and a few more details about them:

1. Madwire ($102M/year)

JB Kellogg, the Co-Founder and Co-CEO of Madwire, came up with the idea for his business while interning at a travel magazine company. After realizing his talent for website design and seeing the potential for helping businesses grow through digital marketing, JB and his father decided to start Madwire and grew it into a company with over 500 employees and $100 million in annual revenue in less than 10 years. Their mission is to help small businesses grow and make a difference in their local communities.

Is it profitable? Yes
How much money it makes: $102M/year

How I Started A $8.5M/Month Company Providing Marketing Solutions To SMBs

Co-founder of Madwire JB Kellogg grew his business from just the two of them in a tiny office to over 500 employees and $100 million in annual revenue in under 10 years, by focusing on exceptional customer service and a multi-channel inbound strategy.

Read this case study

Read by 14,129 founders

2. Appetiser ($8.4M/year)

Jamie Shostak, the co-founder of Appetiser App Development, came up with the idea for the business when he met Michael MacRae, who had apps with millions of users but was looking for a new challenge. They both shared a passion for building and growing tech products, and saw a need for speed, data-driven insights, and top-level quality in the industry. After landing two great clients, they realized the importance of setting up predictable growth systems and started reaching out to prospective companies through outbound sales tactics. They are now on track to make over $8,000,000 annually with over 200 employees worldwide.

Is it profitable? Yes
How much money it makes: $8.4M/year
How much did it cost to start: $0

We Started An $8.4M/Year App Development Agency [With $0]

Appetiser App Development grew from a startup with $0 to now making over $8,000,000 annually with over 200 employees across the globe, serving clients that have billions in valuations like Pointsbet and Good Empire, by helping startups succeed with their app development needs.

Read this case study

Read by 4,492 founders

3. CompressX ($30K/year)

Hieu Dinh, leveraging his expertise as a lead iOS engineer, created CompressX to solve his team's cumbersome video compression workflow, ultimately helping over 2,770 customers reduce more than 7 terabytes of data and generating $5,000 in sales.

Is it profitable? Yes
What's the gross margin? 90%
How much money it makes: $30K/year
How much did it cost to start: $134

My App Had Paying Customers Without A Landing Page

Discover how CompressX, a video and image compression app, has helped over 2,770 customers reduce 7 terabytes of data, earn $5,000 in sales, and achieve $3,300 in revenue in the first month, all while growing to 2,600 visitors and 4,800 page views on its website.

Read this case study

Read by 5,921 founders

Learn more about starting a tech company:

Where to start?

-> How much does it cost to start a tech company?
-> Pros and cons of a tech company

Need inspiration?

-> Other tech company success stories
-> Marketing ideas for a tech company

Other resources

-> Tech company tips

How much can you make with a tech company?

With a tech company, you can make an average of $7.47M revenue per year (based on data reported by real businesses).

You can start with an initial investment as low as $50. Then, with proper knowledge and sustained effort, you could have an ROI (return of investment) within 12 months.

How much does a tech company make a week?

Based on our data, average weekly revenue for a tech company ranges around $156K. As such, you could see monthly revenues of $623K.

To know if your tech company achieves the weekly profit target, you need to keep track of the total earnings you get per day. Afterward, you'll want to consider subtracting the expenses you have daily.

Learning your weekly profit can also show whether you're hitting your target goal for your tech company.

How much do tech companies owners make?

The income of a tech company owner can vary depending on various factors such as location, size, competition, and the owner's business skills.

But to give you some idea, the weekly revenue of an established tech company is about $156K. But this can be lower or higher depending on so many factors - it's almost impossible to say exactly.

While the potential for earning a good income as a tech company owner exists, success in this field requires a commitment to providing quality products and services and building a strong reputation within the community.

Tech Company Profit Margins

Generally speaking, a tech company can expect profit margin of around 82%. Profit margins refer to the percentage of revenue that remains after deducting all expenses associated with running a business. In the case of a tech company, profit margins can vary depending on various factors, such as the type and quality of products sold, the size of the store, and the level of competition in the area.

However, these figures can vary depending on the pricing strategy, inventory management, and overall efficiency of the business. To maintain healthy profit margins, tech company owners must focus on managing costs, negotiating favorable supplier terms, and providing high-quality products and services to attract and retain customers. By doing so, tech company owners can ensure long-term sustainability and profitability for their business.

Tech company owner salary

The salary of a tech company owner is an unpredictable figure. It's significantly influenced by numerous factors, including the store's location, its size, and the degree of competition. An owner of a well-established tech company, in a prime position, might see an average weekly salary around the ballpark of $128K.

But it's worth noting, such numbers aren't always consistent. The earnings can vary wildly, potentially swinging by as much as 80% either way.

Achieving consistent success and maintaining a reliable income stream in this industry requires a deep commitment. It's imperative to offer high-quality products, deliver impeccable customer service, and nurture a trusted bond with the community you serve.

Conclusion

In a nutshell, based on many of our examples, a tech company may be a promising business to start - but the success of your tech company mostly depends on your effort and your approach.

If you focus on these, you'll have a much higher chance of a profitable tech company.

Part of

Starting A Tech Company: Everything You Need To Know

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