“Cash is king,” says a new Montreal startup seeking to show entrepreneurs just how important it is to map out their finances.
Longtime Montreal entrepreneur/investors Marc Alloul and Charles-Hubert Déry have created Budgeto, a new user-friendly application that allows people to build and share budgets in a few clicks. Investors, bankers and partners all want to see the numbers in a startup, said the pair, and their new tool allows founders to “hope for the best and plan for the worst.”
The problem, said Alloul, is that most of us totally underestimate the importance of no-brainer financial variables in our businesses, like burn rate and forecasting. “But most of the time we don’t learn how to build an efficient budget until the last minute when it has already drastically impacted our performance in raising money and getting a good valuation.”
After that, said the cofounder, the entrepreneur ends up spending much-need cash on outside sources to help build their budget.
Enter Budgeto, a new way to efficiently plan for the future through a simple web application. “Our plan is very ambitious,” said Alloul. “We’re not only providing a tool for online budgeting but one that will continue to monitor real operations as they happen.”
Alloul, 46, is an entrepreneur, physicist and investor originally from France. He has created and sold “about half a dozen companies” in the entertainment and mobile gaming space and became an investor in 2011 with W2/W3 investments. Along with investing and Budgeto, Alloul serves as a mentor or judge at FounderFuel, Acceleration Lab and the John Molson School of Business.
Déry, 37, is an accountant by day and mentor at HEC’s startup accelerator. Over the last nine years he ended up working with nearly 100 different startups doing financial projections, working with a few companies including KPMG.
The pair founded Budgeto in 2012 and have built its user list up to 600 different companies and institutions, 44 percent of which are paying customers. They’re targeting enablers in the startup community, or places like accelerators, incubators, universities, entrepreneurs associations, investors, banks and more.
The tool is easy enough for entrepreneurs to use and can provide a comprehensive, professional and sharable PDF budget for stakeholders. Users are required to enter in their variables in several sections, including company incorporation, employees, product information and sales, capital assets, debt and grants, share capital and more. At any time a user can launch a tutorial guiding them through any part of the equation, and the tool offers sample budgets in many areas.
“The most important thing is that in literally less than two hours you’re capable of having a profit and loss overview of your business, a statement of earnings and a cash flow balance sheet on a monthly or yearly basis,” Alloul told MTLinTech. “And that’s very powerful when you want to launch a business.”
Users can enter a business in Canada, the United States and some other countries, depending on where the business was incorporated. They can then alter and configure variables in all the sections so the tool gets a complete picture, including different ways of recognizing revenue from product sales, manually managing employee expenses and capital assets and more.
According to Alloul, most entrepreneurs have no idea what they’re doing in this area when they launch a company. “They have an office and can forecast a whole bunch of expenses but they never think about all these other things they need to run a company. Our idea is to provide them guidance.”
Users can also easily manage funding as the team at Budgeto is constantly updating various grants, tax credits and other programs. “It modelizes the interest rates, calculates it automatically and plugs it into your cash-flow utilization,” pointed out Alloul.
Share capital is also explained through Budgeto, as users can plan how an investment comes in and forecast a round of financing into cash-flow projections, another part that Alloul admitted many entrepreneurs struggle with when it comes time to enter the information into a budget.
The secure budgeting tool can help entrepreneurs build a pro-forma budget in minutes – on the phone, tablet or computer. And the best part about it? For one business building a 12 month budget, the tool is free.