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Financial outcomes for your business
17/02/2021

There are three possible financial outcomes for your business, each with their own challenges:

  1. Make a profit
  2. Breakeven, or
  3. Make a loss

Making a profit

Clearly, this will be your goal. If you make profits – and taxation will never eat up all your profits – this will generate cash resources that can be accumulated in the business or used to finance working capital or other investments in equipment.

Also, importantly, profits provide the means to repay loans and reward shareholders for their investment in your business.

Profits are associated with buoyant trading conditions and provide prima facie evidence that all is well.

Breakeven 

Breaking even in this context usually means that revenue/sales are equal to all costs. No profit, no loss.

It’s the equivalent to marking time and equates to any activity producing no additional resources for your business. However:

  • You can keep your team together
  • You can maintain contact with customers and suppliers
  • Your bank will be happy as they will see that your cashflow in’s and out’s are matching.

Many businesses during the current COVID disruption would be delighted to breakeven. Those that fail will experience the last option…

Making a loss 

Losses occur when costs exceed revenue. Losses can be funded for a period of time but will be terminal for a business if, and when, cumulative losses – less any recovered taxation – exceed cash reserves or the ability of a business to borrow to cover a growing deficit.

Business owners who find themselves in this latter position should seek professional help. There are options including steering the businesses back towards breakeven/profitability.

Act early. Don’t wait until you have exhausted yourself and your remedial options. Pick up the phone, we can help.


Contact us

Main Office
33a Portsmouth Rd
Woolston
Southampton
SO19 9BA
 
Tel: 02382 123 336
E:   This email address is being protected from spambots. You need JavaScript enabled to view it.
 
 

Hampshire

Satellite Office
The Old Bond Store
Back of the Walls
Hampshire
Southampton
SO14 3BH
 
Tel: 0345 222 1066 / 02382 123 336
 
 

Surrey

Satellite Office
16 Imber Grove
Esher
Surrey
KT10 8JD
 
Tel: 0345 222 1066 / 02382 123 336
 
 
 

Wartling

Satellite Office
Well House
Wartling Road
Wartling
Eastbourne
BN27 1RX
 
Tel: 0345 222 1066 / 02382 123 336
 
 

Visit Us

Monday - Friday 09:00- 1730​
Evening and Weekend appointments
are available on request​.
 
To make an appointment,
please email hello@genio-accountants
or call us on 02382 123 336.

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