[kictanet] Finance Policy - Tech Startups

[Dorcas Muthoni]

@Phares

Its important to have your expense projections of the year, having your
income upfront just means you are better prepared for the expenses.

corporate tax payment schedules are well adviced by KRA and your auditors
should be able to help you with such tax planning.

investing in product development is very important, that should be
fore-planned in your expense projections.

the essence of being in business is to make enough profits to invest both in
short term, mid-term and long term assets. several investment advisors and
preference should sort you out with nice opportunities. i also presume the
trechprenuer will be well versed with what they wish to invest in.

[?] my 2cents


On Thu, Jul 7, 2011 at 12:49 PM, Phares Kariuki <pkariuki at gmail.com> wrote:

> The reason I ask this question is how do you shield the corporation
> from fluctuations in revenue?
>
> What happens if revenues slide for say 3 quarters continuously? If you did
> not have some form of financial cushion, you will miss financial obligations
> (salaries etc).
>
> What I was driving at is how do Kenyan tech companies shield themselves
> from revenue fluctuations?
>
>
>
> On Thu, Jul 7, 2011 at 12:44 PM, Edwin Onchari <eonchari at lynxbits.com>wrote:
>
>> ** **
>>
>> ** **
>>
>> ** **
>>
>> 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.  ****
>>
>> ** **
>>
>> To add to what Francis has said – assuming that expansion of the tech
>> company is not possible, then as a good corporate entity, you could
>> participate in a worthy corporate social responsibility program****
>>
>> Edwin****
>>
>> ** **
>>
>> 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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>>
>> The Kenya ICT Action Network (KICTANet) is a multi-stakeholder platform
>> for people and institutions interested and involved in ICT policy and
>> regulation. The network aims to act as a catalyst for reform in the ICT
>> sector in support of the national aim of ICT enabled growth and development.
>>
>> KICTANetiquette : Adhere to the same standards of acceptable behaviors
>> online that you follow in real life: respect people's times and bandwidth,
>> share knowledge, don't flame or abuse or personalize, respect privacy, do
>> not spam, do not market your wares or qualifications.
>>
>
>
>
> --
> 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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>
> The Kenya ICT Action Network (KICTANet) is a multi-stakeholder platform for
> people and institutions interested and involved in ICT policy and
> regulation. The network aims to act as a catalyst for reform in the ICT
> sector in support of the national aim of ICT enabled growth and development.
>
> KICTANetiquette : Adhere to the same standards of acceptable behaviors
> online that you follow in real life: respect people's times and bandwidth,
> share knowledge, don't flame or abuse or personalize, respect privacy, do
> not spam, do not market your wares or qualifications.
>



-- 
Muthoni

My Blog: http://rugongo.blogspot.com/
--------------------------------------------
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Then they laugh at you,
Then they fight you,
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