@Phares<br><br>Its important to have your expense projections of the year, having your income upfront just means you are better prepared for the expenses.<br><br>corporate tax payment schedules are well adviced by KRA and your auditors should be able to help you with such tax planning.<br>
<br>investing in product development is very important, that should be fore-planned in your expense projections.<br><br>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.<br>
<br><img goomoji="gtalk.328" style="margin: 0pt 0.2ex; vertical-align: middle;" src="cid:gtalk.328@goomoji.gmail"> my 2cents<br><br><br><div class="gmail_quote">On Thu, Jul 7, 2011 at 12:49 PM, Phares Kariuki <span dir="ltr"><<a href="mailto:pkariuki@gmail.com">pkariuki@gmail.com</a>></span> wrote:<br>
<blockquote class="gmail_quote" style="margin: 0pt 0pt 0pt 0.8ex; border-left: 1px solid rgb(204, 204, 204); padding-left: 1ex;"><font color="#330099"><font size="2"><font face="arial,helvetica,sans-serif">The reason I ask this question is how do you shield the corporation from fluctuations</font></font></font><font color="#330099"><font size="2"><font face="arial,helvetica,sans-serif"> in revenue? <br>
</font></font></font><div><font color="#330099" face="arial, helvetica, sans-serif"><br></font></div><div><font color="#330099" face="arial, helvetica, sans-serif">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). <br>
</font></div><div><font color="#330099" face="arial, helvetica, sans-serif"><br></font></div><div><font color="#330099" face="arial, helvetica, sans-serif">What I was driving at is how do Kenyan tech companies shield themselves from revenue fluctuations?</font></div>
<div><font color="#330099" face="arial, helvetica, sans-serif"><br></font></div><div><div><div></div><div class="h5"><div class="gmail_quote"><br></div><div class="gmail_quote"><br></div><div class="gmail_quote">On Thu, Jul 7, 2011 at 12:44 PM, Edwin Onchari <span dir="ltr"><<a href="mailto:eonchari@lynxbits.com" target="_blank">eonchari@lynxbits.com</a>></span> wrote:</div>
</div></div><div class="gmail_quote"><blockquote class="gmail_quote" style="margin: 0pt 0pt 0pt 0.8ex; border-left: 1px solid rgb(204, 204, 204); padding-left: 1ex;"><div><div></div><div class="h5"><div link="blue" vlink="purple" lang="EN-US">
<div><div><p class="MsoNormal"><span style="font-size: 11pt; color: rgb(31, 73, 125);"><u></u> <u></u></span></p>
<p class="MsoNormal"><span style="font-size: 11pt; color: rgb(31, 73, 125);"><u></u> <u></u></span></p><p class="MsoNormal"><u></u> <u></u></p><p class="MsoNormal">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? <u></u><u></u></p>
<div><p class="MsoNormal"><u></u> <u></u></p></div></div><div><div><p class="MsoNormal">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. <u></u><u></u></p>
<p class="MsoNormal"><span style="font-size: 11pt; color: rgb(31, 73, 125);"><u></u> <u></u></span></p></div><p class="MsoNormal"><span style="font-size: 11pt; color: rgb(31, 73, 125);">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<u></u><u></u></span></p>
<p class="MsoNormal"><span style="font-size: 11pt; color: rgb(31, 73, 125);">Edwin<font color="#888888"><u></u><u></u></font></span></p></div><div><div><p class="MsoNormal"><u></u> <u></u></p><div><p class="MsoNormal">On 7 July 2011 12:15, Phares Kariuki <<a href="mailto:pkariuki@gmail.com" target="_blank">pkariuki@gmail.com</a>> wrote:<u></u><u></u></p>
<p class="MsoNormal"><span style="font-size: 10pt; color: rgb(51, 0, 153);">Hi,<br clear="all"></span><u></u><u></u></p><div><p class="MsoNormal"><u></u> <u></u></p></div><div><p class="MsoNormal"><span style="color: rgb(51, 0, 153);">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? </span><u></u><u></u></p>
</div><div><p class="MsoNormal"><u></u> <u></u></p></div><div><p class="MsoNormal"><span style="color: rgb(136, 136, 136);"><u></u> <u></u></span></p></div><div><p class="MsoNormal"><span style="color: rgb(136, 136, 136);">-- <br>
</span><span style="color: rgb(51, 0, 153);">With Regards,<br>
<br>Phares Kariuki<br><br>| T: <a href="tel:%2B254%20720%20406%20093" value="+254720406093" target="_blank">+254 720 406 093</a> | E: <a href="mailto:pkariuki@gmail.com" target="_blank">pkariuki@gmail.com</a> | Twitter: kaboro | Skype: kariukiphares | B: <a href="http://www.kaboro.com/" target="_blank">http://www.kaboro.com/</a> |</span><span style="color: rgb(136, 136, 136);"><u></u><u></u></span></p>
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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.<br>
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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.<br>
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<br>| T: <a href="tel:%2B254%20720%20406%20093" value="+254720406093" target="_blank">+254 720 406 093</a> | E: <a href="mailto:pkariuki@gmail.com" target="_blank">pkariuki@gmail.com</a> | Twitter: kaboro | Skype: kariukiphares | B: <a href="http://www.kaboro.com/" target="_blank">http://www.kaboro.com/</a> |</font><br>
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