When starting your own business, it is normal for entrepreneurs to have questions about the various bureaucratic issues involved in opening a company and attracting and managing its clients. Learning how to define the value of the pro-labore , the remuneration of partners, is also very important for maintaining the business. However, this subject is not always treated with due importance by new entrepreneurs.
Especially in the beginning, it is common for entrepreneurs not to feel obligated to receive a salary. This happens because they understand that it is time to invest in the business. But this is a mistake that can compromise the maintenance of your accounts. Determining your salary is part of good financial management .
Considering the importance of this topic, in this post you will find tips on how to define the partners’ salaries and maintain financial control of your business. Follow along:
The importance of knowing how to define the value of the pro-labore
Some entrepreneurs don’t even know the definition of pro-labore, which is a Latin term that means something like “for work”.
As a result, whenever they need resources to resolve personal problems, they end up resorting to the company’s cash flow without any prior planning — which can be fatal for the business if the habit continues for a long time.
As a partner, you have a role in the company and should be paid for it, after all, there is a cost for the work performed. Without knowing how much your hourly work is worth, it will be impossible to define the costs of your services and charge correctly for them.
Furthermore, receiving a fixed salary does not mean that you will not have a share in the company’s profits, as these are two completely different types of remuneration.
Obviously, if the company has more than one partner and one of them does not perform any function, he should not receive the pro-labore, but only the part that corresponds to him in relation to the business profits.
Therefore, it is essential to understand the difference between the terms so as not to disrupt financial management planning. Another crucial guideline is to never mix personal accounts with those of the company.
Determining the salary of partners
Determining the value of your salary is not as difficult as it may seem. Just follow some basic rules to arrive at a fair value that is in line with the market average.
Create a list of all the roles that the firm partner does first. To reach a precise position and proceed to the second phase, all obligations—no matter how numerous—must be listed.
After deciding on the role, you must investigate the market to ascertain the typical pay for that particular role. It is worthwhile contacting professional recruitment firms as well as websites and newspapers that list employment openings.
Don’t forget to include all expenses related to taxes paid when hiring a professional, such as INSS. In addition to all these tips, the entrepreneur’s common sense also counts, since the pro-labore must be fair and in accordance with the reality of the business.
Financial solutions for business growth
By maintaining financial control of your business, there will come a time when you will start to think about issues such as consolidation and expansion of the company — goals that will be difficult to achieve without well-defined financial management and expansion projects.
At this stage, the possibility of using financial solutions such as loans or bank financing comes into play — which are completely different alternatives from one another and which must be used in accordance with specific objectives.
For an entrepreneur with a more conservative vision, these two words may not sound very good, but in the business world, you need to know how to identify the right moment to take risks.
There are several paths you can follow to promote the expansion of your business, such as:
- the opening of a branch;
- the partnership with new partners;
- the diversification of services and products offered;
- and the acquisition of other companies.
In other words, there is no shortage of possibilities for you to plan the growth of your business.
The differences between financing and lending
Financing and loans are completely different financial credits, and each of them is suitable for specific situations.
In general, financing usually involves the acquisition of an asset or must be used for a specific purpose authorized by the lending bank. Precisely because of these details, obtaining it is usually more bureaucratic.
On the other hand, there is the loan — which, like the solution used by individuals, is more accessible and only depends on a credit analysis carried out by the bank.
All this convenience has a cost, as when requesting a loan it will not be necessary to justify the use of the resource, while the interest will be higher when compared to financing rates.
Obtaining financial resources
To keep your business finances healthy, it is essential to think strategically. You should also be careful to identify the best financial resources for your company.
When opting for a loan, keep in mind that it is best suited to correct specific and unexpected problems, such as:
- payment of suppliers;
- the correction of possible deficits in working capital ;
- and the acquisition of goods with price advantages.
Financing is the best option for a planned investment, which will certainly contribute to the company’s growth. It can be useful in cases such as:
- renovation and expansion of the physical production and service space;
- acquisition of equipment and technological resources;
- expansion of sales points;
- and implementation of new strategies, such as export.
Whichever option you choose, always remember that all credit alternatives must be carefully analyzed. And the company’s reality must always be taken into consideration. As much as it is important to take risks in order to grow your business, there are conditions and scenarios that need to be analyzed.