Dedication to growing a business that was invested in over the years is worth more than a spending spree. Here’s how to manage your small business profits.
The goal of most mompreneurs is to build their business to a point where it is making them a healthy income. Everyone’s idea of a healthy income will be different. Some may be happy to be turning a small business profit that covers their everyday living expenses. Others wouldn’t feel happy unless they had several million dollars in the bank.
If you have a sound business idea, business plan, and the skill to develop your business, there’s no reason why you shouldn’t make a success of your venture. You could easily be earning a six-figure sum every year. The question is, what should you do with your small business profit?How to Manage Your Small Business Profits Click To Tweet
There are few business owners who immediately spend all their small business profits on themselves. The dedication and commitment invested into to growing a business over the years is worth far more than having a spending spree .
If you’ve struggled financially or had to pay off business loans, you’ll appreciate that securing the future of the business is more important than anything else. Small business profits can be fruitfully employed to reinvest in the business and ensure it has growth capability. What you choose to invest in will depend on how much money you have available, and what the needs of your business are.
Sensible options include:
- Marketing: it’s essential to keep up the momentum of your marketing campaigns and adapt your methods to keep pace with the market.
- Staffing: engaging and retaining the best staff will give you a significant advantage over other businesses. Staff are the most valuable attribute your company possesses, and employing the optimum number of staff and reducing staff turnover are excellent ways to improve productivity and reduce unnecessary expenditure.
- Facilities: you might have set up your business in small premises or a cheaper but less desirable location, and if your business has matured and grown, you could be better off moving to larger premises. This needs to be a strategic decision based on the benefits of making a move rather than a vanity activity that offers no real value, otherwise you’ll be investing money with few prospects of making it back.
You could also look at expanding product ranges or extending the number of services you offer. Make sure this is carried out as a considered and thoroughly costed exercise in just the same way as you’d have prepared your original business plan.
If you are worried about covering any financial downturns in the future, you can consider putting your profits into a savings account. Standard accounts won’t make you very much in the way of interest, but you do have the reassurance of knowing your money is safe. You can access your money immediately should the need arise. Longer-term savings-based accounts usually offer higher interest rates. You won’t be able to access the money whenever you like as you could with a standard account. If you wish to make your money work harder for you, there are many possible investments you could make using your business’s profits.
Stocks and shares
Investing in the stock market is a widely accepted way of achieving worthwhile returns without necessarily taking too high a risk with your capital. If you’d like to consider investing in the stock market, talk to a financial advisor. A financial advisor has the expertise to advise you on a portfolio of investments that match your available funds.
Property is still a popular option especially for longer-term investments. The advantage of owning property is that you can earn an income by renting it out while retaining the capital. You can make a healthy return on your purchase price when you decide to sell. The downside of property investment is the work involved in being a landlord. This can be overcome by engaging an agency like OneTouch Property Management to take care of all the landlord’s responsibilities.
Another idea for investing your profits is to buy antiques, artworks, classic vehicles. These types of items are likely to increase in value over the years. But, you can’t guarantee that the artist whose painting you buy will turn out to be valuable in the future. However, it can be highly enjoyable sourcing and purchasing collectibles. You’ll also have some beautiful possessions to display in your home.
If you enjoy taking a risk and can afford to write off your investment if things don’t work out, then you could consider the excitement value and possibility of substantial gains investing in more risky or volatile markets. When Bitcoin was first introduced to the market. If you had invested in it then, you’d be feeling very happy about your decision now. On the other hand, you could find those hard-earned profits wiped out at a stroke. You will need to be sure you could cope both financially and emotionally if the worst happened.
Investing in yourself
Among the options available for managing your profits, don’t forget that you should be investing in yourself as well. If you aren’t well and happy, your business will suffer, so taking care of yourself should be a priority. Spend some of your profits on home improvements, or treating yourself to an experience or possession that you’d truly appreciate. The fruits of your labor is an important part of why you became a mompreneur in the first place. Don’t lose sight of your own pleasure and well-being.
However you choose to spend the money, be sure to enjoy reaching a stage in your entrepreneurial journey!