Business101: Tips to help manage your business’ profits
JOHANNESBURG - February is a financial year-end for many businesses.
Provisional taxes have to be calculated and paid to the SA Revenue Service. Businesses get a clear picture of their profits after financial obligations such as debtors, creditors, loan accounts, inventory, payroll and finance leases have been considered.
While turning a profit in a sluggish economy is a terrific milestone, businesses are often faced with the difficult decision of how best to manage these extra funds to maximise future growth. Herewith are simple tips below:
As the saying goes, cash is king. It is always a good idea to maintain a certain degree of liquidity for any unforeseen over-and-above the business insurance policies you may already have.
Decreasing your monthly repayment instalments or eliminating them can free up cash in the long run. Look carefully at the fine print – does the arrangement allow you to pay off a big chunk - and consider whether it will better your business credit score.
Achieving long-term business success is about establishing a competitive advantage or unique selling proposition. Use your profits to maintain and strengthen it, review your position in the market and identify what needs to be done to stay ahead of the curve.
Invest in new ways to improve your business through streamlining customer experience, upgrading the quality of your product or service, or bettering infrastructure and internal business processes.
Employees are an invaluable business asset. Consider offering professional development programmes and benefits packages or discounts. Not only will your business benefit from the new skills, but it also impact on job satisfaction and employee loyalty positively.
Leadership is an important driver for success. As a business, you need to constantly upskill like looking at getting extra coaching in areas like executive leadership, business strategy, investor pitching, or conflict resolution.
Stop wearing all the hats and outsource tasks that sit outside your core competencies.
While it is not always realistic to staff up for everything that needs to be done within the business, there are tons of options for bringing in specialised skills - from consultants, freelancers and specialised agencies.
Marketing is often neglected at the expense of prioritising day-to-day operations. Give your marketing efforts attention to increase your market share and to reach new customers. Include proper performance metric tools and improve your company website.
Make your profits bigger by investing them in high-interest savings accounts. If you would like to invest in stocks and shares, make sure to seek professional counsel or let an expert handle it altogether, as there are risks involved.
Ben Bierman is the managing director of Business Partners Limited.