MAKING BUSINESS SENSE

1
MAKING BUSINESS SENSE

• Link between Personal Finance And Business Finance

2
The Golden Quadrilateral
3
Business Operations

• Employment Employees
• Facilities Location
• Growth Strategy Plans
• Organization incl legal structure
• Risk

4
Business Finance

• Capital purchase assets
• purchasing or leasing
• Capital structure
• Owners contribution
• Debt
• Working Capital
• Cashflow
• Risk

5
Personal Finance

• Cash Money Management
• Income from BUSINESS
• Management growth of personal wealth
• Risk management
• Benefits
• Retirement planning
• Transition distribution planning

6
Personal Business Finance Relationship

• Size of business
• Number of employees
• Type of business
• Degree of involvement
• Kiyosaki Quad E/I S/B
• Life stage of business
• Investment phase
• Accumulation phase
• Preservation phase
• Distribution phase

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Organizing Your Business

• Types
• Sole Proprietor
• Partnership
• Close Corporation
• Pty Ltd
• Ltd
• Factors in Choosing
• Cashflow
• Taxation
• Protection

8
Assess It

• Planning
• Record Keeping
• Cashflow
• Networth
• Timeline
• Resources
• Time
• Treasure
• Talent

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Vision It

• Definition
• Financial Planning being intentional about how
  you earn, spend, save and invest, protect and
  pass on your money and/or possessions.
  
• Dreams/Vision
• Mission
• Goals
• Values
• Spiritual
• Health
• Family
• Social
• Financial career
• Mental and Education

10
Fund It- Personal

• Personal Savings
• Friends family
• Retirement Savings
• Homeloans
• Securities Loans

11
Fund It- Banking

• Banks
• Business Banking
• Business Lending
• Revolving
• Equipment Financing
• Signature

12
Fund It- Credit

• Banks
• Business Banking
• Business Lending
• Revolving
• Equipment Financing
• Signature

13
TAX

• Income Tax
• Employment Tax
• Payroll
• UIF
• SDL
• Capital Gains Tax
• Dividends
• VAT
• Excise Duty
• Licenses Fees

14
Run It (Budget)

• Start with knowledge
• Garbage in garbage out
• Be realistic
• Watch irregular expenses and income
• Contingency plan
• Do the what-ifs
• Keep debt to a minimal
• Get commitment
• Create rewards

15
Run It (start-up)

• Expenses (tax deductable)
• Ordinary and necessary
• Not extravagant
• Not personal
• Start-up costs
• Investigating
• Legal
• Partnership agreement
• Incorporation
• Business license (where applicable)
• Infrastructure
• Initial inventory

16
Run It (operations)

• Overhead
• Marketing
• Professional fees
• Research
• Education
• Insurance
• Travel
• Meals Entertainment
• Vehicle use
• Gifts
• Bad Debts
• Interests bank Charges

17
Protect It Risk Management
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Protect It - Insurance

• Property liability
• Life
• Personal
• Key Person Insurance
• Health
• Medical Aid
• Hospital Plan
• Disability

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Business Insurance Policy

• Inventory
• PCs should have coverage in the policy
• Equipment owned or leased
• Business property insurance form also covers
  furniture and fixtures
  
• Money or securities
• Coverage for personal belongings
• Property being held for someone else
• Business Records

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Grow It
Increasing Risk
Decreasing Risk
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Grow It Risk Profile

• Inflation
• Compound Interest
• Tax
• Time frame
• Rule of 72

22
Grow It -

• Emergency
• Savings
• Investment
• 33 Property
• 33 Securities
• 33 Money Markets

23
Plan It

• Retirement
• Start early
• Tax deductable
• Company contribution
• University fund

24
Transfer IT

• Sale or succession
• Valuation
• Tax consideration
• Estate Planning
• Provide for specific family needs
• Avoid probate
• Provide liquidity
• Achieve charitable intentions

25
Transfer It

• Will
• Trust
• Intervivos or Living Trust
• Testamentary
• Objectives
• Facilitate asset transfer
• Manage finances
• Shelter money from estate tax
• Split assets and income from those assets
• Achieve charitable objectives
• Tax considerations

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Summary

• Ensure books are audited
• Have a tax advisor
• Timeous submission to SARS
• Take advantage of taxable deductions
• Final Measurement
• Social
• Economic
• Environment