I am the last person to give you advice on traditional investing. I don’t have much faith in the stock market. Anything that can move as quickly as it does, make or break a person in a day, is not something to be trusted. Yet I know wealthy people earn more money by making their money work for them.
I do have a few ideas and suggestions on how you can invest in your business. We work hard to build our businesses. More often than not, as business owners, we make personal sacrifices to ensure our dreams are a reality.
The best way to invest in your business is to invest in yourself and staff. What are some skills or classes you could invest in? When was the last time you worked with a consultant to set goals, build a strategy for growth? Would working with a professional or business coach increase your revenue? I guarantee, no matter how well established your business is, there are areas in need of growth and improvement. Choosing to invest money into skills, coaching, and strategies is money that will yield a high return. Choosing to improve, to grow is always the best decision. And a great way to use your money.
Let me get personal for a minute. Do you have a 90-Day Operational Savings account? After the last two years, the lesson I learned was the value of a 90-Day Operational account. Let’s be real. Our invoices are never paid on time. We always have payroll and overhead to pay. Having this cushion allows us to survive lean times, and to have a healthy amount of cash flow. But when we aren’t borrowing from this account, it’s just sitting there. What if you placed this money in a high yield savings account? Even with the low interest rates, you would still end up making money.
There are other accounts, or in my case line items of money, that I save. If I placed my quarterly tax payments, rainy day accounts, and other line items that if placed in a high yield savings account could be generating income for you. I know, you are thinking the interest rates are so low it isn’t worth the effort. But, as I always like to point out, the Target dollar bins are very dangerous. You think you only picked up one or two items, and the next thing you know, you have spent a hundred dollars. Similar things can happen with low interest rates.
Thinking along the lines of investing and saving money, brings me to the question of your budget. When was the last time you examined your expenses? I would be willing to wager there are several items you pay for that you really don’t need. This year, I have been focused on lowering our monthly expenses. Each month, I look at what we are spending and question the expense. Over the course of the year, I have been able to drop our overhead by $200 a month. That may not sound like much, but for us, that was more than a 50% cut in overhead. Consulting does not have a high overhead. And I chose to make untraditional choices. Like maintaining my office at home and traveling to my clients. This decision alone saved us over $300 a month.
Once you know what your expenses are you can create a cash flow sheet. Knowing what you need to make on a weekly and monthly basis is empowering. Monitoring your expenses this closely in comparison to your revenue allows you to make decisions like when to approve overtime, or send an employee home and save money on payroll. Managing your money well is also a way to invest in your business.
Working with a financial investor can help you save money and make money. Taking the time to review your books and financial goals will help you make the right investment decisions. I worked with a financial investor for a few months. I learned they can set you and your business up for success.
This is the time of year to look at your finances, set goals, and work on them. Make the biggest investment you can. Invest in your goals with smart money management.