Everything you need to know about reinvesting in your business!

June 28, 2022

It takes time to build and establish your business. But once you are able to cover all current overhead expenses, it's time to start putting extra money into your business.

What is reinvesting in your business?

Reinvesting just means putting a fixed amount or % of your company's profits back into your business. It's one of the best ways not to only grow you business, but increase its value.

Is reinvesting worth it?

Two huge potential benefits from reinvesting in your company are:

Your business can now grow. From successfully reinvesting in your business, you now can expand, hire new employees, and/or stock up on inventory or supplies.
Tax benefits. Reinvested money in your business is an expense, so you can write it off when it comes tax time.

Investing options for your business

Focus the reinvestment where you need it most:

Investment portfolio: Such as stocks, bonds, mutual funds, and much more. For most business owners, reinvesting also means putting together a portfolio for retirement. On average stocks return around 5-7% a year.
Yourself: Invest in courses, self improvement books, and videos to expand your current knowledge and skills.
Networking opportunities and events: Meet connections with potential clients, merchants or business partners.
Business expansion: Buy out another store, get the newest technology, or start a new business branch.
Business improvements: Improve your infrastructure, increase manufacturing time or invest in customer support.
A cash cushion: Have lump sum of money in case of unforeseen expenses or situations happen.
Marketing. Marketing. Marketing: Consider bringing on an in house or full time marketing person or agency to help further your reach and growth.
Your employees: Hire more employees if you need them, or invest on workshops to improve their efficiency.

Note that these options can work for almost any industry, but the results may vary. For ex. investing in customer service center could drastically increase sales for a retail store while not increasing an online store's sales nearly as much.

How much exactly to reinvest:

First off, every business owner needs to consider where you’ll get the best return on your money. Think about why you started your business and how it got to where it is today, that will be a good start.

Whatever your reinvesting approach you take, be sure to cover your current expenses and new growth opportunities. If you are looking for money to help expand your business, Click N Loans can help. Click here to apply to expand your business!