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September 19, 2019
Business

Developing Businesses through Managing Profit Allocation

A business must continuously grow, otherwise it will die and end up with stagnation. The business will potentially be crushed by other similar businesses which have more potentials and advantages than you have now. Therefore, it’s best for you to keep developed as you can grow and have a greater number of opportunities in the future.

 The key is to manage your business profits appropriately, so businesses can grow rapidly. Managing business profit can be conducted through these allocation steps:

 

• Separate your personal finances from the company’s

 Never integrate your personal account with company account. This is will confuse you to calculate and book company’s finances appropriately, and of course, very risky.

Or, you will most probably use company money for personal interests, because the interpretations that your company’s money is your money as well. Keep it in your mind, it is not.

 

• Use 10 per cent profit for business development

 Once you have booked company profits, you should begin to separate them for various business interests. Business development is certainly one of the most important sectors that you must prioritise. It’s suggested to allocate 10 per cent shares of the profits to the business development posts. Business development can be ranging from opening branches, improving human resources, upgrading support tools and instruments.

 

 Your 20 per cent shares of your business profit should belong to investment. It’s very important as you can’t fully predict the future of your recent business, it can be your safety guard. There are various investment instruments, such as deposits, gold, savings, stock, or property, anything that’s suitable to support your recent business.

 

• Allocate 10 per cent to Personal Funds

 It’s suggested for you to 10 per cent shares of your profits into your personal account. After all, it is very important for you to enjoy the results of your hard work. You can consider it as salary for CEO.

 

• Allocate 10 per cent for Social Purposes

 You will be very grateful for the amount of success and profits from the business you now have. For that, it would be very appropriate if you set aside specifically 10 per cent shares of every business profit you have as a social fund.

 

• Turn 50 per cent to Your Venture Capital

In order to keep your business grow, you’ll have to keep turning business capital. It’s best for you to allocate the rest of 50 per cent shares of your profit to capital posts as a healthy capital turnover will keep the business developing and expanding rapidly.

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