Your business is doing great. All of your bills are paid, your employees are happy, and you are ahead on your mortgage payments. There’s just one question: what should you do with all the extra money?
There are many ways to invest your excess cash, such as establishing cash reserves, investing in your business, maximizing capital expenditures, buying another business, or setting up retirement accounts, but there is one option that stands above the rest: Invest in your business.
While it’s important to have a cash cushion, you should invest as much cash as you can back into your business. Such investments should start with the most pressing aspects of your business: maintenance and upgrades to existing equipment and structures. Eventually, you are going to have computer issues, the roof will leak, or your AC unit will break so use your business surplus to make these capital improvements before they shut down your business indefinitely.
Every day your business is closed for repairs means you risk losing money, employees, and most importantly your customers.
Once you have made all the necessary repairs to your existing equipment, if you still have excess cash, start looking for ways you can upgrade your business for the future. Swap out your outdated paper tags with a modern heat seal system, all-in-one touchscreen computer, printer, wireless scanner, and state-of-the-art conveyor to increase your daily production. Don’t let outdated technology and equipment slow your business down.
After you have made all the necessary capital repairs and upgrades to your business, if you still have excess surplus, consider implementing new services to diversify your business’ stream of revenue. Pickup/delivery is the logical first new service, and it allows you to serve customers more frequently and with larger orders than in-store drop off. If you already offer pickup/delivery, now may be the time to upgrade your delivery van or start offering a wash and fold service to your customers.
There’s never a wrong time to invest in your business, and having a business surplus makes now the perfect time to replace, upgrade, and enhance your equipment and services.