Through hard work and savvy marketing, you will eventually start to make a profit in your business. You will then face that all-important question: What do I do with the money and business profits?
The first thing you need to do is put some of your profits into your savings or emergency fund. This is common sense and should be good practice for all business owners. The second thing you should consider is ways to spend some of the extra funds you have acquired.
How to Spend Your Business Profits
However, care needs to be taken. If you misspend your money, you may damage your business. Buying surplus equipment to requirements, for example, or casually wasting money on anything that won’t profit the business, are both no-nos. Instead, consider the following (sensible) ways to spend your profits.
Pay off any debts
Many businesses get into debt when trying to raise capital. This is normal, but to allow your business more financial freedom, it is in your best interest to pay off whatever debt your small business loan or credit card acquired. Do the same with any friend or family member who may have also loaned you money at the outset.
Outsource areas of your business
You may be able to manage most of your tasks in-house, but if you have the extra cash to spend, it makes sense to outsource to those firms which could benefit your business, even if you only use their services for a short time. Using something akin to this best answering service for lawyers, for example, or a web design team to manage your website, are just two examples of places where your money won’t be wasted.
Reward your employees
Should you have employees working for you, then share your business profits with the people who helped you acquire them in the first place. You might want to give them a cash bonus, for example, or you could take them out for a meal as a way of showing your thanks.
You might also put some of the money into improving their workstations or break rooms. A happy employee is a productive employee, so don’t neglect them.
Other ideas include gifting them with products to use at home and work, such as Printed drink bottles, apparel, or stationery. Corporate gifts are always welcome. Investing in their education and training will benefit both you and your employees.
People who feel they have enough training and support are typically more efficient in their workday. Alternatively, how about offering them extra paid holiday time so they can get away and relax without using their accumulated holiday pay.
Pay some of your tax bill
Don’t wait until the last minute to pay off your taxes. This is one of those expenses that is an unnecessary evil; you have to pay it, even though you don’t see the rewards of your payments.
While you have business profits to spend, pay off a portion of your tax bill early, as this will lessen the strain on your bank account later on when the taxman comes knocking at your door.
You need to make sure your business is bringing in more money. One way you can do this is by marketing more. Spending money to market your business means adopting better strategies that give you an edge over your competition. Potential clients should be able to differentiate your marketing campaigns and get attracted to your product offerings.
This can be done by purchasing better ads in print publications, getting more prominent banners at events and conventions, or even just having an advertisement on social media targeted towards the demographic that would benefit from your products or services. If you couldn’t afford to attend trade shows, now is the best time to have custom-made trade show booths 10×10 for the next event in town.
Also, upgrade your website, make sure your social media pages are active, and always have eye-catching photos or videos. An excellent marketing strategy ensures that money is coming in, accelerating the business growth.
Invest your money
Using only a portion of your business profits, consider investing in another business or on the stock market, as you may see a sizeable return as a result. Provided you do your research beforehand, this is one way to escalate your bank funds and give you the means to grow your business faster.
Of course, the best company to invest your money in may be your own. Investing your profits back into your business can allow you to grow it at a steady pace. You can use your business to invest in all kinds of business growth measures, whether hiring new people or adding new products or services to your offering.
Setting up a new service could be easier and more affordable than you think with white label options like reseller hosting. You can provide a new service for your customers without having to set it up from scratch. Just choose a service that makes sense for your brand and that your customers will appreciate. All you need to do is repackage your chosen service to resell.
Take Out Insurance
Another thing that you need to try and do is take out insurance. Taking out insurance is always a good investment. Business insurance is now easier than ever for you to take out online and you would be surprised at how much protection it can give you if you ever run into an issue with your suppliers, your clients, or your employees.
It’s a good day when the profits start rolling in, but you should be wise in the way you handle them. Consider our advice, and if you have any tips of your own, be sure to share them with us. Take care, and thanks for reading.