Costs - GB78
To calculate your total start-up capital requirements,
you need to first determine out how much you need to start
your business, and then how much you need to stay in business
until your venture begins to turn a profit.
Evaluating Renting, Leasing, Buying &
Financing Options - GB79
Why rent or lease? In general, rent for convenience, flexibility,
to "try before you buy" and to avoid locking yourself into
a long-term lease. Lease because its cheaper than renting,
doesn't require a big down payment, and helps control your
cash flow. Rent or lease because its easier than getting financing,
because you lack the funds to buy, to avoid taxing your cash
reserves, to avoid maintenance and repair responsibilities,
to avoid obsolescence and depreciation, to improve asset liquidity,
and to get immediate tax deduction benefits.
Preparing a B.E. Analysis, Cash Flow Statement
& Income Projection - GB80
The term cash flow is used to refer to the amount of money
actually available to make purchases and pay current bills
and obligations. It is the difference between cash receipts
(the money you take in) and cash disbursements (the money
you spend) over a specific time period.
Capitalizing Your Operations - GB81
The biggest drawback of equity financing, besides the fact that you will have to share your profits with others, is the loss of control over your business. Quite often, your equity investors will not agree with your short-term or long-term plans, and since you have given them a share in the ownership of your business, you will have to seriously consider their point of view.
Reducing Business & Living Operating Expenses
Buy in small quantities at first. It's not a good idea to
buy too much inventory or supplies when you are just starting
out. You can always reorder.
Starting a Retirement Plan - GB83
Pay all the costs of your IRA or RRSP outside the account
or plan. Many IRAs and RRSPs conveniently take their fees
off your principle. This is very convenient for them. But
for you, it wastes a possible deduction. Arrange to pay
all fees for your IRA or RRSP by check from funds not inside
the plan. This way you can charge the costs of commission,
registration and administration as expenses against your
personal income for tax purposes.
Building an Investment Portfolio - GB84
A bond is an interest-bearing security - a piece of paper
- issued by governments, banks, corporations, and municipalities
to raise cash. More simply put, a bond is a loan made to
large organizations by investors. When you buy a bond, essentially
you are purchasing an IOU from the issuer who promises to
pay you a set rate of interest for a specified period of
time - in some cases this interest rate is adjusted according
to market rates - and also, to return your capital on a
specified date called the maturity date.
Investing in Real Estate - GB85
Find locations that are close to needed amenities.
Apartment and homes need to be close to shopping centers,
churches, schools and other services. If you're considering
a commercial building, determine if there is adequate traffic
flow or proximity to working establishments. Homes should
also be close to places of employment, shopping centers
and churches. The further they are away, the worse their
Reducing Your Taxes - GB86
Your accountant is your best friend when it comes time
to doing your taxes. However, although they are essential
to a good tax strategy, keep in mind that they aren't as
specifically motivated as you are to save your money.
Selling Your Company - GB87
If your venture is five to ten years old, has had substantial
growth in sales during the period, and in recent years has
achieved an acceptable level of earnings, then perhaps you
should consider selling it. You should also consider selling
it, if you feel that it has reached a stage where it must
make the transition from being founder dominated to one
which utilizes more formal and more disciplined management
practices and you don't wish to participate in this transition.