For many founders, the crucial question at the outset is whether their venture will be profitable at all. Profitability planning helps answer it. It shows whether, and to what extent, the investment of work and money pays off. To do this, you estimate net revenue and net business expenditure for the first three years. These figures show the resulting profit. A projected annual surplus is a good sign; if you expect an annual deficit, you should critically review business income and expenditure again.
And why look at the first three years? Experience shows that the third year after founding is the most critical, because additional expenses arise then, such as trade tax or contributions to chambers and associations that had not previously charged contributions because earnings were too low.
The figures help you assess whether the idea is commercially viable. If you are unsure, WiReGo is available for advice.
