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We recently formed a company for someone. He wanted the name Bidvest S…….. (Pty) Ltd. I can’t say what the S…….. was but it described the kind of business that he was in. The computer at CIPC would not see a conflict because there are so many Bidvests (52 at the last count) that it would interpret that as meaning that no-one had exclusive title to the word. The name was approved by CIPC and we went ahead and completed the company registration. Shortly after that he was complaining to us that the name Bidvest was a Trademark and they…

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Last week I talked about a client who is building his company on bad business instead of good business and I briefly mentioned some performance ratios that he needed to achieve in order to get things on the right path. So, if I know nothing about his particular industry, how can I tell him what he should and should not be doing? The answer is in the ratios. There are very few different types of business. Let’s take a look. Service companies. Their costs are almost entirely salaries and rental. Manufacturers. Their material costs are the highest of their costs,…

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We recently completed a year’s accounts for one of our bookkeeping clients. This time around, I noticed that his turnover had shot up from R1m to R4m. Seemed like things were going well. Until I looked closer. His net profit dropped from R53K to R47K, so he was doing four times the amount of work for less profit. On R4m turnover, he should be making at least 8% profit which is R320K, but he was making about 1%. His Gross Profit (the difference between sales and purchases) was 20% of turnover for both years, which is about a half of…

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If you manage your debtors, you are already a long way to a successful business. Here are a few examples of what people do right and wrong. Right. Don’t do a thing until you’ve been paid. That’s the way our practice operates, so we have zero debtors. Almost right. Insist on a 50% deposit and the balance immediately prior to installation. Almost right. “This is a cash practice. Please pay on the way out.” Note – “In” rather than “Out” would be perfect. Hardly right. Insist on a 50% deposit and the balance immediately upon installation. Wrong. “I’ll send you…

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In January, we decided that we would no longer charge our services to register new companies. All that would be required was payment of the R175 CIPC fee. I was fascinated to find that practically nobody took up our offer! When it came to the on-line credit card payment for the R175, perhaps they thought it was a scam and terminated the transaction. We phoned them all and their reasons were vague. I was tempted to do the job for absolutely nothing, but decided to approach it differently first. I figured that if we make it look like a…

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Many years ago, I searched long and hard for a production control package that could replace the progressively more complicated Excel workbook that we were using in the practice. I could find nothing that fit the bill. Then I hit on CRM (Customer Relationship¬†Manager). CRM is designed to help you manage your relationship with each of your customers. It keeps track of customer details, leads, sales, tasks, service dates and also sends automatic emails to keep the customer informed of upcoming events, such as scheduled services. Could I, perhaps, bend one of these packages into what I needed? What…

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So, you are the sole shareholder and director of a company. The company’s creditors issue summons against the company with you as a co-respondent. What is your position? Quite simply, as the shareholder you cannot be held liable for the debts of the company. That’s what the word Limited means in (Pty) Ltd. Your risk is limited to the possibility of losing your investment in the company, the share capital. There’s a proviso. If you received a dividend when the company’s liabilities exceeded its assets (in other words, the retained income was negative on the balance sheet), then that dividend…

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I was interested enough to give it another try. I wanted to see whether the company that I formed ended up with a name like K2021/123456/07, which is what happens if you take advantage of FNB’s offer. I spent a frustrating half hour registering a new account at CIPC and setting up a password, then, when I tried to log in, I go an error message. Grrrr! I decided to give it another bash and clicked on the reset password button. I received an email allowing me to change the password, which I did. Then, when I tried again to…

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CIPC have a website called BizPortal which is intended for people who wish to register their own company. It is not intended for the likes of us who register companies for other people. They’ve tried to make it simple and we know of a few people who have navigated their way through the process, but most people give up and take the easy way out by contacting us. Those who succeed in registering their own company often end up paying more for the finished article because they have no idea what a share register is all about, nor what…

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With the change in company tax rate from 28% to 27%, the question again arises whether to pay yourself in salary or in dividends. Salary is straightforward, but you need to bear in mind the additional cost of monthly payroll services. This totals about R14 000 per year, or R10 500 net of tax. The total annual cost in tax and payroll services for a sole director/shareholder who earns R2m gross is R760 191 and the net salary is R1 250 321 If no salary is drawn, but the R1 250 321 is lent to the director in…

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I get numerous WhatApps like these – Hi can you assist to register a constraction canpony or where is the best place to go? Evening i should like to register my company how do I do to go through? Hello hoeveel om te registration Hi my name is Tebogo john M I need ck what r Way’s to follow How do you hep people start a business I wannna know wt ur campany do you can help me by receiving ck certficate Hi ineed to start the business Am will to registere a business Let’s start by acknowledging that this…

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For me, a day without a meeting is like a day without sunshine. I love to help people with their businesses, their marketing, their plans to form a trust and anything else they want to talk about. I have currently had 82 Google reviews, all but 2 of them are 5 star and those 2 were 4 star. Why? Because I care. Booking a meeting is as simple as clicking on the link on our home page, or you can click here. The link takes you directly to my diary, where you will see that I am available…

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After the most testing four years of my life, I qualified as a CA(SA) and Registered Auditor at the age of 54. Now, many years later, I have resigned the auditor part. Why? Well, firstly, engineers are not born to tick boxes and, by golly, that’s what auditing is all about. The modern standards focus so heavily on procedural issues and reporting that I found that they missed the point entirely. In an entrepreneurial environment, a true professional could sniff out malfeasance that no amount of box ticking would uncover. Secondly, under the new Companies Act of 2008, very few…

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As many of you know, we are nomads. We rent penthouse style and move about once a year. The first two moves were with Biddulphs and they went smoothly and efficiently. The packers came in, wrapped, packed and loaded our belongings, and delivered them to our new apartment all without fuss or bother on our part. Then came the third move. Ouch! Helen’s jewelry was stolen and every small box that might contain something of value was opened, like the empty cellphone boxes that we all keep when we upgrade. When we phoned Biddulphs to advise them that some of…

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No-one in the company has more interest in making it succeed than you, so it’s your energy that makes things happen. Energy is not about huffing and puffing, scrambling around putting out fires, yelling on the phone at delinquent suppliers. No. Energy is so much more subtle, and so much more powerful. The Asian nations understand this so much better then us Westerners. They call it Chi, Qi or Ki and they treat it with the utmost respect. The arts of kung-fu, Reiki, chi-gung, karate, acupuncture, yoga, tai chi, feng shui, all rely on the control and channeling of this…

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Call me stupid, but I think that Debt to GDP is a meaningless measure of our ability to repay borrowings. Why? Because it’s quite possible for a country to have a massive GDP and be unable to pay foreign debts and equally, a country could have a relatively small GDP and be able to comfortably repay them. In order to understand this, we need to look at what GDP is. In a nutshell it’s total production of goods and services, including trade surplus or deficit. So, let’s say that a country had a GDP (like South Africa) of $350bn a…

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We often get enquiries from non-residents who wish to form a company in South Africa. Much of it is pretty straightforward, but there are a few special considerations. Anybody, or any company, anywhere, may be a shareholder, or even the only shareholder, of a South African company. Anybody, anywhere, may be a Director, or even the only Director, of a South African company. The Registered Office of the company must be at a South African street address. We offer our offices for this purpose. However, if the company wishes to open a bank account, then it must be opened by…

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I thought I was savvy about scams and would never get caught. But when my cell phone was stolen I learned a big lesson. I had my banking app on the phone, but always had to tap in my PIN, so I figured that was safe. I had internet banking on my desktop and had remembered the banking password to Google Chrome, but that was OK because the desktop is password protected. So, my cell phone was stolen and the thief, presumably having seen the Standard Bank app icon, Googled standardbank.co.za, must have found my email address somewhere else on…

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The easy one to understand is the Income Statement. This starts at the top with your sales, or what you like to call your sales. Me? I don’t think you’ve made a sale until the money is in the bank! But more of that later.

Then there might be an item called Cost of Sales, or Cost of Goods Sold. This is the total of all of the direct costs incorporated in the thing that you sold, so it would include, for instance, raw materials, transport of stock into your stores, consumables like paint, packaging, etc. Cost of Sales is then deducted from sales and the result is called Gross Profit. In a nutshell, this is the difference between what your stuff cost and what you sold it for, your markup, in other words.

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