9 Ways Entrepreneurs Should Think About Investing Profit

by / ⠀Entrepreneurship Funding / September 22, 2020
close up to dollar bill

Even in a challenging economy, your business is making money and now you’re looking at where to invest it. First of all – congratulations. It’s not easy to build a successful business and you’re making it work! Next, let’s take a look at great uses for those profits. 

How to Think About Investing Profit

There are plenty of places to put your cash. Here’s how to prioritize and plan where your profits will go.

1. Outsourcing 

Is it time to stop doing the tasks you don’t like about your business? Even entrepreneurs who love what they do usually have at least one or two agenda items that feel more like chores than anything else. Start making a list of tasks you regularly do but want to outsource and you’ll be ready to start clearing your to-do list. You might be surprised by all the things you can outsource to streamline your business and your life.

2. Get a business coach

You’re already doing a great job with your business, but every entrepreneur can do even better with the right coaching support. Traditionally, business coaches have mostly helped executives at large companies, but today’s business coaches have a lot to offer any business and can help you develop your skills, implement processes, and make your business more efficient from the inside out. Coaches who specialize in every industry, business model, and business size can be found online.

3. Do some hiring 

Hiring a first (or another) employee frees up your time to do more, just like outsourcing individual tasks. Depending on the type of business you have and your goals, you might hire someone to help with customer service, a virtual assistant to help with administrative and communications tasks, a fulfillment specialist, website manager, or another role. If you’re not ready to hire anyone full-time or bring on an employee, you can hire an independent contractor or find help through a gig platform. Hiring has never been easier with all the options available to entrepreneurs now.

4. Save and invest your cash

Having savings socked away gives your business options and creates flexibility to expand, cover extra expenses, or invest later. You never know what tomorrow’s opportunities will be – and often, opportunities require investment. Given the uncertainty inherent in running a business, every entrepreneur is better off with a little extra money set aside. Starting or adding to your cash savings is a smart investment for today’s profits and a great way to strengthen your business. 

Don’t let your cash saving sit and collect dust. Make it work for you by investing in places that give you a good return while also providing the liquidity you need. Money market accounts are the most liquid but give you much smaller returns on your cash. Look at investing in things like stocks or even a currency or crypto trading account to keep your savings relatively liquid and available. With a strong bitcoin price, it’s a good time to invest for the future. 

5. Invest back in your business

If the time is right to expand – and it probably is if your profits are strong and the market supports more growth – then investing your profits back into your business is another smart approach. 

It’s possible you have a wish list ready for your investing, but if you don’t, then taking the time to plan your investments is a good idea. Equipment, marketing services, new software, your website, or design for your brand are great places to start.

6. Support your team’s skills

If you have a team, putting your profits into helping your team grow their skills can be a great investment for any entrepreneur. Being in touch with your team’s capabilities and career goals is also a good way to motivate team members and keep them highly engaged with their jobs.

7. Develop a new product or service

After getting in the groove with what you are offering customers right now, including a new product or service that adds value for customers and provides an upsell opportunity could be a smart internal investment in your business.

8. Stocks and other securities

2020 saw a strong stock market recovery and there are plenty of great opportunities to diversify your investments by bringing your profits into stocks, bonds, commodities, and other securities. Have an appetite for risk? There are plenty of non-traditional and interesting securities and funds out there to check out. For example, if you saw the cybersecurity industry was booming, then it may be time to look for some great cybersecurity stocks

9. Buy something nice or fun

Assuming you’re feeling good about how you’ve invested and you have the profits to spare, go ahead and treat yourself by pulling profits out of your business for something cool. Every now and then, even the most frugal entrepreneurs should reward themselves. Keep yourself motivated! 

Investing your profits helps your business continue to gain momentum. Track your investment growth, diversify, and plan carefully for your next opportunities. With the right investment mindset, you can keep building on your success.

Related Post: Business is Boomin – 10 Ways to Build a Booming Business

About The Author


Matt Shealy is the President of ChamberofCommerce.com. Chamber specializes in helping small businesses grow their business on the web while facilitating the connectivity between local businesses and more than 7,000 Chambers of Commerce worldwide.