It’s a happy day for the business owner when their company starts to see a profit. All of the hard work that has gone into the business finally begins to pay off, with one consequent question:
Where should I spend my business profits?
Common sense has to prevail, of course. In some cases, rather than spend the profits earned, the business owner should let the money sit within a savings account to gain interest and an even greater profit. After all, there might still be a rocky future ahead, so the temptation to spend should be curbed. Still, while this is an entirely sensible choice, there are spending decisions that are worthy investments. While some money should be stored away for rainy, turbulent days, including emergency situations, there is a practical sense in spending a share of any profits earned.
Here are some of the sensible ways to spend your business profits.
#1: Spend money on marketing
The more you market your business, the more people your business will accrue. In theory, your business should then experience greater profits. So, you might consider spending more money on ad space, be that in digital or print media, or you might outsource your marketing needs by paying an outsourced team to give this area of your business the push it needs. You might also spend it on those things that will enhance your marketing, such as exhibition stands to help you grab attention at trade shows, or on your website, paying for ways to improve your SEO, such as hiring a link-building company to extend word of your business.
#2: Spend money on your team
The better your workforce, the stronger your business will be, so consider where money can be best spent on your team. You might give them a cash bonus using some of the profits as you have earned, as this is a great way to thank your team for the hard work they have put in for you. In theory, this should incentivise them to work even harder in the hope of another cash bonus down the line. You might also spend your profits on training for your team, as this will develop their skills, which will then profit your business practically and financially. And should profits keep coming in, you might also spend money on employing extra staff, as this will give you the means to better grow your business.
#3: Spend money on yourself
It’s not selfish to spend money on yourself, provided you use your profits on something that will benefit your business, and not just line your pockets for a luxury lifestyle. As with your employees, one of the best ways to spend a share of your profits is on training. Using your funds to invest in leadership coaching will make you a better boss, and give you further skills which will benefit your personal as well as your professional life. Or you might spend the money on skills-based training in areas which you are weakest. You might also reward yourself with a cash bonus, provided you have also done the same thing for your team.
#4: Spend money on your business premises
There are all kinds of ways to spend money on your business premises. You might purchase new equipment for you and your team, for example, perhaps with the latest in technology to make everybody’s life easier. You might also purchase better office furniture, with seating that is more comfortable than what you are currently sitting on. Consider your employee’s needs, perhaps by spending a share of your profits on the staff break room, adding those things that will benefit their downtime, such as a healthy snack machine or a ping-pong table to energise them between work shifts. Spending money on your office decoration is also useful, such as giving your walls a fresh lick of paint, or by adding some wall decor to make the office space more welcoming. By spending your money in any of these areas, your business should profit further, as, in theory, the morale of yourself and your staff should be improved, and that will enhance productivity.
You don’t want to waste your business profits by squandering them in areas that won’t impact your business further, so consider our suggestions in this article. Again, we also advocate saving a portion of the money you earn – you never know when you might need it – but if you do want to spend money on your business, our suggestions are the way to go. Let us know your thoughts!