3 Ways To Reinvest In Your Business For Longevity
Have you recently encountered a financial windfall, or experienced a particularly good quarter, and now you’re wondering how best to spend your surplus profits? Well, it’s no secret that the most successful business owners reinvest a large portion of their profits back into their business. Why? To become even more successful of course! In this handy guide, The A Firm financial experts have listed top 3 methods of reinvesting in your business the right way.
#1 Expand Existing Budgets
One exciting benefit of reinvesting in your business is that it frees you from an otherwise tightly restrained budget. Many small businesses – when starting out – are forced to “run lean” on vital components such as marketing, sales, salaries and branding.
While this approach is viable – and in some cases even necessary – in the short term, it is ultimately unsustainable. So now is a great time to take a closer look at:
- Components of your business that are performing exceptionally well. This could be a particular team member, or even a certain service you offer that is in high demand. Increasing their budgets will most likely improve the already good results.
- Parts of your business that are not performing as well. Perhaps a marketing channel does not have enough budget to get off the ground, or a product needs a redesign. Now is the time to give financial breathing room to the parts of your business that need it.
Pros & Cons List
|
Pro: Improve existing components that already work well |
Con: Increased budgets will likely need to be retained in order to see best results |
|
Pro: An increased budget will likely increase Return On Investment |
Con: Without proper experience or guidance, choosing what to increase budget on may prove difficult |
|
Pro: Give struggling parts of your business breathing room |
#2 Research And Development
The financial experts here at The A Firm have spoken quite a bit about the need for businesses to continue to adapt and embrace change. Nothing personifies this imperative quite like research and development. The business landscape has unfortunately become highly saturated, meaning that many small businesses will face stiff competition from others offering similar products & services.
Reinvesting in the research and development part of your business will allow you to stay one step ahead of the competition. A decent investment will ensure that you can offer a new product or service that is in high demand, but is not yet being offered.
Or, you may choose to reinvest in improving & upgrading one of your current best selling products or services. Modern customers typically have high expectations for the business they choose to trade with. Meaning that a stellar product or service is simply not enough; your product or service must also be constantly evolving & engaging your clientele in new ways.
Pros & Cons List
|
Pro: You may discover an entirely new product or service that is in high demand |
Con: Occasionally, research & development may result in a failure – back to the drawing board! |
|
Pro: You may improve one of your best selling product or service, resulting in more profits |
Con: Some business owners become too excited about new possibilities, and overspend – Learn how to avoid this here. |
|
Pro: You will ultimately increase the sustainability of your business by not relying on outdated models |
#3 Perform A Financial Audit
Make sure your business isn’t leaking any cash via outdated software, subscriptions, memberships, or systems you could be getting for a fraction of the price! As your business grows more and more, the amount of systems you have in place can quickly become unmanageable – especially for the person focused on running the business!
This is why some of the most successful business owners employ the services of registered accounts, experienced bookkeepers, and our qualified financial experts. The A Firm can take a comprehensive look at your business to:
- Provide strategic advice on the direction needed to scale your business
- Devise methods of saving your business (and yourself) from tax costs
- Efficiently find parts of your business that you are being overcharged on, or potentially overspending
- Manage growth strategies so your business can consistently increase profits year after year
Pros & Cons List
|
Pro: Receive expert financial advice on scaling your business |
Con: An A Firm Audit may discover instances of overspending, & require you to adjust your strategy accordingly |
|
Pro: Have the advantage of an experienced accountant when tax time comes around |
|
|
Pro: Gain a more intimate understanding of your business’s cashflow |
If you’re interested in getting the most out of reinvesting in your business, then you can’t go wrong hiring the help of a professional. Here at The A Firm, we have decades of experience helping business owners grow their existing practices. Take a look at our financial solutions or book a free chat with our director today!