In this interview https://soundcloud.com/user-768186920/heart-to-heart-31-mar-5-things-that-every-smes-should-know, I share a few basics that start-up entrepreneurs could do to improve their finances.
Restaurants, liquor outlets, B&Bs, property investors and many other businesses are still suffering due to Covid-19 lockdown regulations and the resultant loss of income. Some of these businesses have closed down. How can you as a business person do to protect your family and ensure that your personal assets e.g. your home is not repossessed due to failure of your business?
Owning a business comes with a lot of responsibility. As an entrepreneur, you almost have to be a jack of all trades. You might be very good at what you do but without the necessary support, basic book keeping skills and understanding of the laws that you have to comply with, your business could actually struggle & sometimes even fail.
- If you are married in community of property and you have a small enterprise, register your company as a Pty (Ltd) as soon as you can. This will ensure that your business is a separate legal entity from yourself. As small businesses are struggling these days with Covid-19 having affected many businesses, big & small, If your company is struggling then even if the company has to close down, your creditors cannot attach your family home.
- Make sure that you or your spouse do NOT sign surety for the business because this will enable your creditors to go after your personal assets if you cannot pay your debts
- Open a bank account for the business and try your best to separate your personal expenses from your business expenses
- Pay yourself a monthly salary from your business, even if it is a small salary. This will enable you to apply for loans where necessary as you can show that you have a monthly income
- If you have employees, remember to register them for UIF so that if they lose their job, they can claim UIF
- If your annual revenues are less than R1mil, do not rush to register for VAT because this will increase your book keeping expenses
- Get a book keeper to assist you with management accounts and financial statements because when you want to apply for loans, banks will require a proper set of financial statements
Do you want a home loan or a car loan? Remember to contact ThuthukaSA firstname.lastname@example.org if you need money to buy a home or a car or if you need to get cash out of your home or your car