Numbers are super important to Nathalie Niemeyer, a business growth training advisor at the École des entrepreneurs du Québec. But, in her eyes, before making forecasts, you have to start by thinking about your expectations in terms of profitability. “Every person is different and the context also influences decisions,” she says.

For example, due to COVID-19, entrepreneurs have had to accept taking more time to make certain investments profitable. Also, they have had to look at the other options they had in front of them.

“I was recently with entrepreneurs in the field of creativity and crafts,” says Nathalie Niemeyer. “What came up most was how much fun they had doing what they do. Profitability may not be there as quickly as they would like, but abandoning their business to find a job is inconceivable for many. So they are ready to accept lower profitability.”

See more clearly with the numbers

Once you know what you want in terms of profitability and why, it's time to take a closer look at the numbers. "The results will never be exactly what you predicted, although they are close, but the forecasts you make will increase the chances of success of an investment project," says Maxim Montminy, business growth training advisor at the École des entrepreneurs du Québec.

While entrepreneurs do not master all the vocabulary of accountants, Previsio allows them to easily enter the figures needed to produce their financial forecasts.

Nathalie Niemeyer thinks of five major factors to consider when assessing the profitability of an investment:

1- The selling price of the product;

2- Variable costs related to the product sold or the service provided such as the cost of raw materials;

3- The expected sales volume in the short term and the ability to increase this volume over time;

4- The fixed costs necessary for its creation;

5- The ability to optimize processes.

“Sometimes entrepreneurs are faced with their numbers and they don’t accept them,” says the trainer. “That’s when they start creating new solutions to optimize processes in order to be able to do more with the same resources.”

She also thinks of a small but not insignificant bonus: the entrepreneur's state of mind or values. "Sometimes, we will see entrepreneurs who will be able to see competitors as allies, for example to buy raw materials at a lower cost," she explains. "This spirit of collaboration can greatly influence profitability."

Thanks to Previsio, the entrepreneur can therefore have a good idea of what awaits him if he stays on course, or if he acts on certain variables.

“You don’t have to turn to your accountant once a year to ask if you’re making money,” says Maxim Montminy. “You have to regularly look at your profitability yourself and closely analyze your investment projects to make sure you’re staying on the right track.”

DISCOVER THE PREVISIO SOLUTION and distribute it in your network, for the benefit of entrepreneurs.