Profits in Business. Can They Be Predicted?

Making profits in business is not a simple matter. Especially at the beginning of the business, when you have no customers, no reputation, and to top it all off, you still have to invest all the time. But once your business has reached profitability, is it possible to predict future profits?

This is a very difficult question, but in my opinion, no. There are a great many variables beyond our control that can cause us to stop making a profit.

Profits in business are unpredictable. Even the biggest can fail

An interesting case is the situation in 2008. At the time, one of the companies I worked for was booming. It had many loyal customers, stable profits, experienced staff, and was developing its platforms to optimize work. And yet, it didn’t survive the crisis because many of its customers became insolvent. When there were too many of them, the company was forced to close.

And it was a pretty big company. The crew numbered more than 100 employees. The company had an international reach and was constantly growing. Interestingly, when I was employed there, there was no indication that the company would close soon. At the same time that I started working, more employees from different parts of the world were coming into the company.

This sad story shows that we may try to predict future profits. But we can never be sure that they will appear. That’s why it’s so important to build adequate capital to survive the crisis that will come sooner or later.

I never rely on future profits in business

I myself, when running my business, never rely on future profits. And I certainly don’t spend them before they appear in my bank account, because I know it doesn’t make sense. Another thing is that with adequate savings I was able to keep the company running at a loss for almost a year. Why? I believed and believe in the success of what I was doing, but I waited for the right economy and constantly looked for new contractors.

Read also: Entrepreneurship as a passion

It seems to me that adequate savings, a strong mentality, optimization of costs and avoiding investments about which we have doubts are key to surviving the crisis. And after night always comes day, so if we survive the crisis, we are stronger, more experienced. And we also appreciate the profits more and do not spend them with a light hand, because we know how hard it is to make them.

All those who run a small business or are simply freelancers know this best.

Read also: My mistakes in business

The inability to predict crises and the uncertainty of the market (and even more so in the age of AI) cause us to hold back on investments. And they are often the driving force behind our business. However, no one wants to sink money into something that is uncertain. But that’s a topic for a completely different article.

And how do you approach the topic of predicting future profits in your business? Does what you plan for yourself a few months ahead usually work out for you?