BUSINESS PROFITS ARE GETTING SLOWER? DANGER! YOUR BUSINESS WILL BE CLOSED IF YOU'RE NOT CAREFUL
Posted: Tue Jan 28, 2025 8:34 am
Not only is the cost of goods increasing, the minimum wage is about to be increased, the OPR is increasing, inflation is also increasing, plus there is no or little assistance from government agencies, now there is also an 8% service tax increase.
What do you think will happen?
Let's try a little test...
If this is a sdn bhd company, its revenue in 2024 will be RM3 million..
Say, a service business with a net profit of 20%..
If the service tax is 8%, he will have to charge RM240k. (Many service companies also absorb the cost of this tax, to attract customers to buy from them)
With a net profit of 20%, profit is RM600k generated..
From this net profit, you need to pay 17% income tax if it is a limited liability company. If it is a regular enterprise, it is 25%.
So, income tax – RM102k (sdn bhd), RM150k (enterprise)..
So, how much profit is left?
RM600K – RM240K (service tax) – RM102K (income tax) = RM258K
That's just 1 year's net profit, not including loan payments (capital, equipment, property, vehicles, etc.)
If a business has a loan of RM20k per month, how much is it in a year? RM240k…
So, how much is the net profit left? RM258K – RM240K = RM18K only..
Want to do a monthly capital rollover, which is usually 1-3 months for stock items for service, is not enough..
Finally, it becomes negative cash flow..
That does not take into consideration the % of kuwait phone data defective products, emergency maintenance equipment costs, brick & mortar repair costs, etc.
I think this is an example of a service business.. Different industries, different calculations..
You should consult your accountant later..
So, if in 2024, or now, we don't monitor our business financial planning, our level of survival will be very risky.
What can be done?
Table of Contents
#1. Look back at the financial report 3 years ago.
#2. Rearrange budget & cost planning for 2024.
#3. Review product/service pricing
#4. Looking back at company debt
#5. Tax management.
What do you think will happen?
Let's try a little test...
If this is a sdn bhd company, its revenue in 2024 will be RM3 million..
Say, a service business with a net profit of 20%..
If the service tax is 8%, he will have to charge RM240k. (Many service companies also absorb the cost of this tax, to attract customers to buy from them)
With a net profit of 20%, profit is RM600k generated..
From this net profit, you need to pay 17% income tax if it is a limited liability company. If it is a regular enterprise, it is 25%.
So, income tax – RM102k (sdn bhd), RM150k (enterprise)..
So, how much profit is left?
RM600K – RM240K (service tax) – RM102K (income tax) = RM258K
That's just 1 year's net profit, not including loan payments (capital, equipment, property, vehicles, etc.)
If a business has a loan of RM20k per month, how much is it in a year? RM240k…
So, how much is the net profit left? RM258K – RM240K = RM18K only..
Want to do a monthly capital rollover, which is usually 1-3 months for stock items for service, is not enough..
Finally, it becomes negative cash flow..
That does not take into consideration the % of kuwait phone data defective products, emergency maintenance equipment costs, brick & mortar repair costs, etc.
I think this is an example of a service business.. Different industries, different calculations..
You should consult your accountant later..
So, if in 2024, or now, we don't monitor our business financial planning, our level of survival will be very risky.
What can be done?
Table of Contents
#1. Look back at the financial report 3 years ago.
#2. Rearrange budget & cost planning for 2024.
#3. Review product/service pricing
#4. Looking back at company debt
#5. Tax management.