What’s the proper use of profit?

It might seem like a peculiar question, but deciding what to do with profit happens to be one of the most important planning decisions for a small business owner. Once the current expenses of a business are satisfied, there are really only three things you can do with a profit dollar. Not coincidentally, they coincide with the three major sections of the balance sheet: Assets, liabilities and equity.

Working from the bottom up, equity (owners equity) is the section that will be impacted if y...

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