How long does it take for a young company to become profitable according to its sector of activity?

• On average, 56% of VSEs become profitable more quickly than other types of business, between the first and second year, while a quarter of businesses with more than 500 employees become profitable between 4 and 5 years on average.
• 20% of French entrepreneurs surveyed consider time management to be the most important challenge
• 5 out of 6 young entrepreneurs today use digital tools to manage their business
• Becoming your own boss represents the main advantage of entrepreneurship for nearly 40% of respondents
• 33% of entrepreneurs in the education sector invested between €25.000 and €49.999 at start-up, twice as much as in the legal sector

Nearly half of businesses become profitable within the first year

In France, nearly 45% of companies become profitable between the first and second year, and it is mainly VSEs that become profitable the fastest (56%), while a quarter of companies with more than 500 employees become so between 4 and 5 years on average.

According to an analysis by sector, a majority of the most successful companies fall within the fields of architecture, engineering and construction; 69% of them become profitable between the first and second year. In addition, the health sector stands out among the best performers in the market from the first year. This is explained in particular by the fact that many companies were established during the pandemic in order to come to the aid of health establishments in the management of the health crisis. Conversely, the margin for improvement is greater for 60% of companies in the legal sector or 44% in the finance sector, seeing their company generate profit only from the 3rd year of activity on average .

From the creation to the sustainability of the company, different challenges and opportunities are imposed on entrepreneurs, the study endeavored to understand the financial challenges linked to the creation of a successful company. In terms of initial investment, while almost a third of entrepreneurs in the art and culture sector invest no more than €9.999, 40% of entrepreneurs in the legal sector invest between €10.000 and €24.000 at start-up. However, it is in the education sector that the investments are the most significant since 33% of business leaders declare having injected between €25.000 and €49.999.

Time management is the biggest challenge for French entrepreneurs

Setting up a sustainable business is as much a matter of passion, organization as it is wise management of one's time. As such, 20% of French entrepreneurs surveyed consider the factor of time management as the most important challenge they have had to face since the creation of their business. Indeed, the planning of working time and the prioritization of tasks can have a considerable impact on productivity and therefore on the profitability of the company, whether positive or negative.

But it's not the only one; the chart below reveals the 5 most common:

Whether saving time or increasing productivity, relying on the latest generation digital tools and services allows you to focus on the essentials, manage and develop your business.

The benefits of entrepreneurship

In order to understand the advantages of entrepreneurship, entrepreneurs were asked about the criteria which, according to them, constitute key levers of differentiation and satisfaction:

1. Be your own boss: 40% of respondents consider this aspect as the most important.
2. Flexibility of working hours: 52% of respondents over 55 consider flexible working hours to be the most pleasant advantage.
3. Watch your business grow appears as a priority for 38% of entrepreneurs in business for 11 to 20 years.
4. Potential financial autonomy: 23% of business leaders surveyed see financial autonomy as an essential part of entrepreneurship.
5. Workplace flexibility: 35% of entrepreneurs over 55 consider this aspect important, compared to only 15% among those under 24.

You can find the complete research on the SumUp website at this address.