The EntreLeadership Podcast We’re Going to Make $600,000 but Take Home Nothing
Jan 20, 2025
A struggling chef wonders why his catering business is cash-strapped despite potential profits. Discussions delve into the shocking capital gains tax in Canada, complicating entrepreneurs' financial journeys. Insights reveal that building a successful business extends beyond just products—it involves effective cash flow management and strategic decision-making. A former business owner shares lessons on cultivating a positive workplace culture while managing the rigors of entrepreneurship. The importance of iterative development and legal collaboration in fostering innovation is also emphasized.
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Increase Margins and Retained Earnings
- Increase profit margins, aim for higher profitability on total revenue.
- Implement retained earnings as an expense item to build a business emergency fund.
Accrual Accounting and Job Costing
- Implement accrual accounting and job costing for each event to track expenses.
- This helps set better pricing and identify areas for improvement.
Hire a Manager for Work-Life Balance
- Instead of selling a business due to high capital gains tax, hire a top-end manager.
- Offer a base salary plus a percentage of profit to incentivize performance.