A healthy dividend policy

Optimizing dividend policy is an important strategic objective for SME entrepreneurs, as it affects the company's financial health, shareholder satisfaction and future growth opportunities. But how do you determine a healthy dividend policy and what aspects are involved?

First, it is important to understand the basics of dividends.

Dividend is the portion of profits paid to shareholders. So only when profits are made can dividends be paid. Therefore, it is important to analyze current and future profitability. In other words, is there a business concept with an earnings model.

Paying dividends can only be done if operating cash flow is not compromised. Can you continue to meet all your payment obligations after the dividend payment is made is a crucial question that must be answered positively.

In addition, it is important to have a stable dividend policy. With this you create a predictable payout towards the shareholders. In the dividend policy you also take into account the amounts you want to reserve for, for example, investments and growth in the future. With this, you do not make the entire profit available for dividends, but only a portion. The remaining profit then remains in the company.

When determining a healthy dividend policy, the tax consequences must also be considered. For example, when dividends are paid to a shareholder who is an individual, dividend tax is due.

Finally, a dividend policy and the opportunity for employees to acquire shares in an organization can be a differentiator in the tight labor market.

Conclusion Optimizing dividend policy requires a balance between distributing profits to shareholders and reinvesting profits for future growth. By carefully considering financial health, shareholder expectations, strategic goals and tax considerations, SME entrepreneurs can develop a dividend policy that supports sustainable growth and satisfied shareholders and employees.