How to measure the real profitability of your activity when you are a freelancer or manager of a small business?

When you are self-employed, making a turnover is not enough.
The real question is: How much do you really have left after all expenses have been deducted?
And even more: is your business profitable? Not only on the surface, but in detail, month after month.

Here is a simple and concrete method for assess real profitability of your activity, whether you are a freelancer, consultant, or manager of a small business.

1. Profitability = turnover

The turnover (CA) corresponds to all the amounts invoiced.
But it's not Not what you actually earn.

First you have to infer :

• your fixed expenses (subscriptions, premises, insurance...),
• your variable expenses (service providers, tools, travel...),
• your social security contributions,
• your professional taxes (or IRPP depending on status),
• and of course, your own remuneration (even if you are not yet paying yourself a formal salary).

👉 High turnover can hide low profitability if expenses are poorly controlled.

2. Calculate your monthly net income

Simplified formula for freelancers and small businesses:

Net result = Received income - (fixed expenses + variable expenses + contributions + remuneration)

That's what you really have left after you've paid for everything.

💡 This result can be positive (you are profitable), or negative (you are losing money).

3. Follow your rate of return

This rate allows you to put your results into perspective:

Rate of return = Net income/Sales × 100

For example:

• CA = 5,000€
• Total expenses = €3,500
  ➡ Net result = €1,500
  ➡ Rate of return = 30%

A good rate depends on your sector, but under 20%, it is often time to optimize.

4. Integrate your real working time

Financial profitability is not enough if your time is poorly valued.

💡 Calculate your Net hourly income :

Net income/Number of hours worked = Actual hourly rate

Example:

• Net income = €2,000
• Hours worked = 160h/month
  ➡ Actual hourly rate = €12.50/h

Ask yourself the question: Is this rate right for you?

5. Use tools to track your profitability over time

Instead of recalculating everything by hand, you can automate your follow-up by:

• custom dashboards (Google Sheets or Notion)
• lightweight accounting tools (QuickBooks, Indy, Axonaut...)
• Or centralized cockpits suchlike Klark, which aggregate your bank accounts and help you visualize your income and expenses in real time, while integrating micro monitoring tools.

In summary

Measuring the real profitability of your business allows you to:

-> make informed decisions
-> find out if your business is viable in the long term
-> pay you the fair value of your time and skills

Profitability is not only measured at the top of the balance sheet.
It is an indicator vital, strategic and accessible to all, from the first months of activity.

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