Planning for Profit – Making Smarter Business Decisions with Accounting Support

Karen Scheepers
May 15
3 min read

While many local entrepreneurs are focused on day-to-day survival, true sustainability comes from thinking ahead. Strategic business planning is not just for large corporations; it is essential for Potchefstroom’s small and medium enterprises (SMEs) as well. Understanding profitability, choosing the right structure, and measuring financial health are critical steps that often require professional input.

This article explores how accounting professionals, such as those at Wave Breaking Accountants, help businesses plan for profit, from determining break-even points to selecting the right business structure and tracking key financial metrics.

Break-Even Point: When Business Starts to Pay Off

A common question business owners ask is: "When will I start making money?" The answer lies in understanding your break-even point, the sales volume needed to cover all your expenses with no loss and no profit.

The formula is simple in theory: Break-Even Sales = Fixed Costs / (Selling Price - Variable Costs). But real-world calculations often require detailed data and expertise.

An accountant helps identify:

Fixed costs like rent, salaries, insurance,
Variable costs like materials, commission, delivery,
Contribution margin per product or service sold.

For example, a coffee shop in Potchefstroom might find it needs to sell 1,200 cups per month just to break even. An accountant can model different scenarios: What if rent goes up? What if prices increase by 5%? What if sales drop in winter?

This analysis informs everything from pricing and budgeting to staffing and promotions. Business owners gain clarity and confidence when they know the minimum sales needed to keep the doors open.

Business Structure: Choosing the Right Legal Framework

Should you register a (Pty) Ltd, operate as a sole proprietor, or form a partnership? The structure you choose affects taxes, liability, and operational flexibility.

Accountants guide this decision by considering:

Personal vs. business risk,
Tax implications (flat company tax vs. sliding individual rates),
Future goals (e.g., bringing in investors),
Compliance requirements (e.g., CIPC filings, audits).

For small businesses in Potchefstroom, a sole proprietorship may be simple and cost-effective to start with. However, as the business grows, a private company might offer better protection and financial benefits.

Wave Breaking Accountants assist with:

Registering with CIPC,
Setting up accounting systems for the chosen structure,
Structuring owner salaries or dividends efficiently,
Meeting all statutory reporting obligations.

Choosing the right structure from the start prevents legal headaches and tax inefficiencies later.

Financial Health: More Than Just Your Bank Balance

How healthy is your business? Many entrepreneurs use the bank balance as their only guide, but real financial health requires deeper analysis.

Accountants help interpret three key financial statements:

Income Statement – Are you profitable?
Balance Sheet – What are your assets vs. liabilities?
Cash Flow Statement – Is money moving in and out reliably?

By analysing these reports, accountants calculate vital indicators:

Gross and net profit margins (efficiency),
Current ratio (short-term solvency),
Debt-to-equity ratio (long-term risk).

Regular financial reviews uncover trends, is your profit margin shrinking? Are your expenses creeping up? Is customer debt slowing you down?

Accountants at Wave Breaking offer monthly or quarterly reviews, giving business owners peace of mind and actionable insight. They also perform benchmarking, comparing your business to industry norms to see how you stack up.

For example, a local retail store might discover its cost of sales is higher than similar businesses. The accountant can investigate supply prices or pricing strategies to improve margins.

Smarter Decisions Start with Sound Financial Planning

Growing a business isn’t just about sales, it’s about strategic decisions backed by real numbers.

With guidance from trusted accountants, Potchefstroom businesses can:

Calculate their break-even points and sales targets,
Choose the right legal and tax structure,
Assess their financial health with real data.

Wave Breaking Accountants works closely with clients to turn complexity into clarity.

From missed tax deadlines to unclear cash flow, small mistakes can cost big. That’s why more local entrepreneurs are turning to simple, practical tools, like a Financial Checklist, to stay on top of their finances year-round.

The essential items every business should track:

✔️ What financial records to keep

✔️ When to review cash flow

✔️ How to prepare for VAT and tax submissions

✔️ What to include in monthly vs. annual reviews

Whether you're a freelancer, retailer, or growing SME, this checklist (backed by insights from Potchefstroom’s own Wave Breaking Accountants) can help you stay organised, compliant, and focused on growth.