While turning a profit is a terrific milestone, particularly in a sluggish economy, business owners are then faced with the difficult decision of how best to manage these extra funds to maximise future growth. See some simple tips below:
1. Save for a rainy day – As the old saying goes, cash is king, so it's always a good idea to maintain a certain degree of liquidity for any unforeseen issues that may arise – over-and-above the business insurance policies you may already have in place.
2. Pay off debts – Decreasing your monthly repayment instalments, or even eliminating them altogether, can help free up cash flow in the long run. Look carefully at the fine print – does the arrangement allow you to pay off a big chunk - and consider whether it will better your business credit score.
3. Defend your competitive advantage – Key to achieving long-term business success is establishing a competitive advantage or Unique Selling Proposition (USP). Use your profits to maintain and strengthen this USP; review your position in the market, and identify what needs to be done to stay ahead of the curve.
4. Improve operations – Going hand-in-hand with the above point is investing in new ways to improve your business offerings. This could be achieved through streamlining the customer experience, upgrading the quality of your product or service, or bettering infrastructure and internal business processes.
5. Invest in your team - Your existing employees are an invaluable business asset, so consider offering professional development programmes, and benefits packages or discounts. Not only will your business benefit from the new skills, but this will also positively impact on job satisfaction and employee loyalty.
6. Upskill yourself – Leadership is an important driver for success, so as a business owner, you need to constantly upskill. For example, look at getting extra coaching in areas like executive leadership, business strategy, investor pitching, or conflict resolution.
7. Hire in help – Stop wearing all the hats, and outsource tasks that sit outside your core competencies. While it's not always realistic to staff up for everything that needs to be done within the business, there are tons of options for bringing in specialised skills - from consultants, freelancers and specialised agencies.
8. Marketing – An area which is often neglected due to prioritising day-to-day operations, give your marketing efforts a much-needed boost to increase your share of voice in the market and reach new customers. This should include proper performance metric tools and improving the SEO of your company website.
9. Invest – Watch your profits turn a bigger profit by putting them away in a high-interest savings account. If you would like to invest in stocks and shares, make sure to seek professional counsel or let an expert handle it altogether, as there are risks involved.