Investing business profits
A profitable business eventually faces a good problem: cash building up with no clear use. Leave it idle and it earns little. Reinvest it badly and you have turned profit into a lesson. We help BC owners decide, from a business perspective, where the next dollar of profit does the most good. Tax and securities decisions stay with your CPA and registered adviser.
What you leave with
You have a written capital allocation plan for the next period of profits, agreed with your advisers.
Who it is for
- Owners whose company holds more cash than it needs to operate
- Partners who disagree about reinvesting versus distributing
- Owners weighing an acquisition against organic growth or banking the profit
What we deliver
- A cash needs analysis: what the business must hold for operations, seasonality and risk
- A return comparison: reinvest, acquire, pay down debt, hold or distribute
- Acquisition screening if buying a business or competitor is on the table
- A capital allocation policy you and your partners can apply every year
- Coordination with your CPA on holding companies and tax, and with your registered adviser on any investing
How it runs
01Position
A Strategy Session establishes how much cash is surplus, your goals and your partners' views.
02Options
We compare what each use of the money is likely to return and what risk it carries.
03Policy
We write the allocation policy and, where an acquisition is the answer, move into search and valuation.
04Coordinate
We bring in your CPA and registered adviser for tax and investment decisions and review the plan yearly.
Engagement and fees
Starts with a 90-minute Strategy Session at $499. Ongoing allocation advisory is a retainer. We do not manage money, do not sell investments and do not advise on securities. Every engagement is scoped after a call and confirmed in writing. See consultations and fees.
The business comes first
Before any money leaves the company, the company needs enough. That means working capital for the slow months, a reserve for the equipment that will fail and the customer who will pay late and funds for the growth you already know is coming. Owners often have less surplus than the bank balance suggests. We establish the real number first. Then we ask the only question that matters: does the next dollar earn more inside this business, inside another business or somewhere else entirely.
Reinvest, acquire or hold
Reinvesting in your own business, in people, equipment, marketing or a new location, is usually the highest-return option when there is demand to meet and the lowest when there is not. Acquiring a competitor or a supplier can buy growth and capacity at once, with the risks that come with any purchase. Paying down expensive debt is a guaranteed return. Distributing to shareholders is often right once the business is funded. We compare these honestly, with the numbers on the table.
Where the professionals come in
Whether to hold surplus in the operating company, move it to a holding company or pay it out is a tax question, and it belongs with your CPA. Whether and how to invest surplus funds in securities is a decision for you and a registered adviser, and we never make it for you. Our contribution is the business judgment: how much is truly surplus, which uses are available inside and alongside the company and what each would mean for your growth, risk and eventual exit.
Questions about this service
Do you manage or invest the money?
No. We do not manage funds, sell investments or give advice on securities. We help you decide, from a business perspective, how much is surplus and whether the business, an acquisition or a distribution is the best use.
Should I use profits to buy another business?
Sometimes. An acquisition can add capacity, customers or a new market faster than organic growth, and a profitable acquirer with cash negotiates from strength. It also carries the risks of any purchase.
What about a holding company?
Holding structures are common for owners with surplus, but whether one suits you is a tax and legal question for your CPA and lawyer. We help you understand the business reasons for and against, and we coordinate the conversation.
How much cash should the business keep?
Enough to cover the slow season, the surprises you can predict and the growth you have already committed to. The right figure depends on your industry, seasonality and customer payment habits, and we work it out from your own history.
Start with a confidential conversation.
Tell Ali where the business is and what you want to happen next. You leave with a straight read on value, timing and the two or three moves that matter, whether or not we work together.