How do you spend your money in your business?

[Basment Dweller]

I have some questions for business owners that are generating good monthly cashflow, how do you spend your money? More specifically:

- What percentage do you spend on operating expenses?
- What percentage do you spend on capital expenses?
- Do you pay out a dividend? and what is your dividend policy if any?
- How much profit do you declare?
- What is your policy on re-investment and growth in the business?

[HR Solutions]

mmmmmm now that would be telling hey

[wynn]

This weeks Petes weekly has what I think is the sagest advice for any SMME


"Online, Offline and Out of Business...
June 10,2015

Cisco supplies large chunks of the Internet backbone. What we loosely call the "cloud", mainly because the first icon for the Internet was a little cloud, turns out to have more circuits, wires and servers than do the fluffy white things that obscure the sun in Cape Town.

The MD of Cisco recently said that 40% of all firms will close in the next decade. Big ones and little ones. Another recent survey claimed that 50% of all US workers will be working for themselves, from home, by 2020. No matter how you look at it, times are changing faster than we were taught to deal with.

Wilbur Wright, the fellow who flew the first airplane, spent years looking at birds, at how they flew, and came to the conclusion that "You can't soar in calm."

The more turbulent it is, at least up to a point, the easier it is to soar. That is the principle he used to get his plane into the air while other people were jumping off the Eiffel Tower with wings strapped on their backs. Without much success.

The thing is, whole genres of offline profits have been decimated in just the past 15 years. Newspapers, classified advertising, travel agents, software stores, music stores, bookstores,...

More are tumbling now as new systems come online. Taxi drivers lose clients to Uber, hotels lose guests to AirBnB, and car rental firms lose renters to Zipcar. These new solutions eat into the profits of offline firms very fast, all the while making life much easier for us pleb customers.

You can ignore it or rail against it. But having just spent six weeks teaching newbies how to start traditional businesses, I am more convinced than ever that our traditional way of doing business needs radical surgery.

Or you can see this as the opening it is. I would love to show you how to build your online venture via my Earnster.Ninja mentorship. But if you feel that I am not the right person for you, then please find another program. No matter which you choose, please start polishing your online business skills right fast."

[Basment Dweller]

Good article Wynn, so we should all be cautious going forward. I like to build up reserves for unforseen costs, the rule of thumb here is you should be able to float your business for 6 months if all your income stops.

I'm interested in what small businesses are doing with regards to dividends, does anyone here pay a dividend at all, or just draw a salary, expense a lot and re-invest the rest?

[Houses4Rent]

I pay a salary and dividends as it saves tax