As a new business owner, when you finally turn a profit, you are tempted to stuff all of that money directly into your wallet. Well, be patient. Here are some reasons why delaying your gratification will pay off! Invest profit into your business with these simple guidelines.
Reinvesting into my Company, I need Personal Income, Too!
Building your company to be profitable can be a grueling process. You are working extra-long hours, scraping pennies together, and working harder than anybody else for little reward. Once a profit is achieved, you think your work has paid off, and it has, but if you want to continue to increase that profit, be careful to choose your next money move wisely. Before you cash out, remember it takes money to make money. Investing some of that money back into your business will be invaluable. Of course, you have your own financial responsibilities, and you need an income, too, so find the right balance.
Reinvesting about 50% of profits will move you in the right direction. This means if your net profit is $60,000, you can afford to invest $30,000 into your company and now have a modest $30,000 a year salary. Invest that $30,000 into the building and advertising your company. That number will increase as your company grows. Pocketing that money halts your growth, you will continue to generate a net profit of $60,000. Let’s say we invest $30,000, and because we were able to improve our company, next year, your net profit is $120,000; again, we invest half. Still, we are pocketing that $60,000 that we refrained from keeping last year but with the opportunity to double our profits again!
Three Areas to Invest in Your Business
We have established that it takes money to make money, but how can be a tricky question that depends on your business and how much time and money you have to spend. Three options that are sure to be valid are advertising, getting your name out there and showing the world who you are; investing in increasing your skill set so you and your employees can benefit from new coaching and experiences; building your company to its potential, don’t underestimate your company, invest in its growth.
Advertising
There are tons of affordable ways to advertise your company and, with the World Wide Web, a lot of places to do it!
- You are making your company a website.
If you don’t have a website, this is a great way to get across information about you and your services in a place that is easy for your potential clients to find and access.
- Social Media.
Use social media to post your information. This can even be free; use Facebook, Twitter, and Instagram.
- Make a commercial
You can show this commercial for free and post it on your website or YouTube.
Increasing Your Skills
By strengthening your and your team’s knowledge and skills, you add value to your service. Invest in certifications related to your service, have someone come in to teach you how to advertise, have an expert guide you on how to maintain your website, and attend conferences. This will take time and money, but you will have a new skill set that will be continuously useful. You are never done learning.
Building Your Company
Invest in your company’s growth; look at what you will need to develop and expand if your company does start to generate more business. Hire new employees, rent new office space, or find another company to team up with. Envision the change you want to see and know that your company’s growth will demand optimal performance. Always calculate the risks of your investments and choose which options are most helpful for your company at the time. Do your homework, plan for future investments, move forward when you are comfortable making them, and watch your company grow!
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