'What to do with profits in a low interest environment' - 2017 Borden Farm Business Update

Name: 'What to do with profits in a low interest environment' - 2017 Borden Farm Business Update
Uploaded: 2017-02-07T03:23:13+00:00
Duration: 38 s
Channel: Gerri the NVT Guru
Description: Speaker advises that allocating profits requires a concise plan tied to clear business goals and personal objectives. The speaker emphasizes…

7 Feb 2017 · 1 min

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Speaker advises that allocating profits requires a concise plan tied to clear business goals and personal objectives. The speaker emphasizes understanding the business's earning capacity, recent profit history, and balance-sheet position to assess risk exposure and borrowing capacity, which then informs objective prioritisation of where profits should be allocated.

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When we're looking at allocating profits, I think it's vitally important to have a concise and accurate plan as to what are the business goals and personal objectives for you and your business, and then that allows you then to objectively prioritise where the money is going to be best allocated. I think part of that is having a clear understanding about the earning capacity of your business. How much profit would you expect to make, how much profit has it been making, and what's the financial position of your business in terms of the balance sheet? Because that gives us some understanding as to how exposed or not the business is to risk and what borrowing capacity the business might have access to.