[kictanet] Finance Policy - Tech Startups

[Francis Hook]

Phares, I'd wager at least 30% needs to be paid in taxes for a start :-)
unless you have included that in the expenses already (excluding PAYE for
staff) in which case I have to ask why such high margins?   If the value add
is very good, and assuming its a service and not a product (and you
indicate) then salaries too must be high?   If a product, the question
remains, what has been the value add such that after acquiring the product
and adding value, you still have huge profits?

If all above is taken into account...then I suppose re-investing in the
business, in expansion and in diversifying the offerings would be the best
way to go.

On 7 July 2011 12:15, Phares Kariuki <pkariuki at gmail.com> wrote:

> Hi,
>
> Question, for those who have run tech startups, how do you deal with
> excessive revenue? Given that tech firms many times operate on high margins,
> let's, for the sake of example, say you have a product that, with an expense
> book of roughly 1M (Rent + Salaries), and your monthly revenue is 8 M KES.
> What do you do with the remaining 7M? Some say invest in product development
> but even then, you will still have quite an amount of change. What happens
> to that change? Invested in a bank? Or in some form of Fixed Income
> Securities (Bonds, T-Bills etc). What's the general practice in .ke?
>
>
> --
> With Regards,
>
> Phares Kariuki
>
> | T: +254 720 406 093 | E: pkariuki at gmail.com | Twitter: kaboro | Skype:
> kariukiphares | B: http://www.kaboro.com/ |
>
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-- 
Francis Hook
+254 733 504561
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