When you achieve your first profit-making financial quarter, feelings of utter elation will consume you. It’s overwhelming because, for perhaps the first time ever, you are seeing a tangible return on your hard work. The business is working, thriving in fact. Wait for a second, wipe away all those tears of joy. What exactly do you do with your profits?
The smart person in you is warning you not to go out to your nearest car dealership and buy a sports car. And it would be correct, you never know what’s going to happen in the future so you need to be wise with profits. But you’re the boss, nobody can tell you what to do, only you can. Here’s some guidance on what the possibilities are.
You’ve invested your time, blood, sweat and tears into you’re business and, you’ve finally gotten a return. Normally people look at a return on investment (ROI) as purely a financial concept. However, time is money and when you’ve spent so many months working hard, a profit signals a payoff. However, a financial investment allows you to get more things done and in the process work a little less hard. An ROI loop is something many businesses implement. They simply take their profits and return them back into the business. This commonly occurs in the research and development (R&D) department. This is where the majority of time is placed, such as into researching materials, designs, prototype builds and more. When you have more cash to throw into the R&D of new products, you inherently speed up the process.
Use Your Knowledge
The longer you own a business in an industry, the more you learn about it. You meet and talk to many people every day, many of them have worked in the industry for a long time. You might be new to the scene but no doubt, by going to networking events, you will have learned who the top dogs are in your industry. Why not use this knowledge to your advantage? Just because they’re a rival doesn’t mean you can’t use them for your benefit. Speak with a Financial Planner who can manage your money and invest wisely in the areas you want. They focus on retirement investments, so they will stretch your money out into the long-term. Corporations and individuals utilize their services for business and industry investments.
A Force Multiplier
When you have a decent stockpile of profits, you will have an urge to buy a force multiplier. Your two main options will be, hiring more employees or buying better equipment. There are two schools of thought, one which says hiring more employees means you get more work done, while the other says, better tools means higher quality work. It totally depends on what you would like to enact first. More employees mean paying a fixed salary which is not so certain for an entrepreneur. Buying better equipment means you may be small but you could make products that rival the more successful brands within your industry.
Using the expertise of a financial planner you can make a sound long-term investment for yourself. However, you could take your profits and invest them in your R&D section to make better products and sell more.