How to Spend Smart to Improve Cash Flow
Congratulations — your business is profitable! Have you considered how much of those profits to reinvest in your business? While some entrepreneurs funnel as much as 50 percent back into their companies,1 depending on your goals and financial obligations.
Having a cash-flow-friendly strategy is key. Here are some investment ideas with the potential to provide a good return on the money you spend, to help you realize as much value as possible.
Grow your assets
Employees are your most important assets and when you invest in their professional development, it pays off in multiple ways. An engaged, high-performing staff drives higher customer satisfaction — which drives higher earnings. Plus, your employer brand becomes stronger, helping you attract and retain the best talent. Consider providing employees with expanded training, access to seminars and workshops, support for continuing education, and time to work on individual projects.
Broaden your perspective
Most entrepreneurs are driven by their vision for the business. But you run the risk of tunnel vision if you go it alone on every decision. While you know a lot about the core of your company — outdoor gear product innovation, let’s say — you might not be as savvy about other aspects, such as marketing or strategic planning. Investing in a few well-chosen expert relationships to compliment your own strengths may help you identify new growth opportunities, save money operationally, and avoid costly mistakes.
Go bigger and better online
A strong online presence is critical to building your brand and expanding your sales reach. Invest in a professionally designed website to maximize customer engagement and ease of contact. Assign a manager to keep the content fresh and respond promptly to customer questions and views. Consider adding analytics to harness visitor data to sharpen your marketing. Leverage social media sites or create webinars and how-to videos for video platforms, if appropriate for your business. With the incredibly powerful reach of the web, even a modest investment in your online presence can pay huge dividends.
Buy yourself some me-time
You need to get away from the business periodically for your own health and that of your company. For starters, that vision thing we mentioned earlier needs replenishing from time to time. Plus, business owners tend to be stress magnets. (Did you know that when you and your employees experience high levels of stress, it can cost the company as much as 50 percent more in health insurance?2 3) Earmark some profits for your mental health — whether that means attending a conference in an exciting destination (maybe with your significant other or family?) or taking off for a solitary getaway. You’ll come back refreshed, ready to re-energize your business.
Cash is the fuel that drives your business, and it makes sense to invest available profits in long-term refueling strategies — like employee education, online brand building, and tapping into expert mentors — that can keep your business on a growth trajectory for years to come.
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2020-92934 Exp. 1/2022
2Azagba, S., Sharaf, M.F. Psychosocial working conditions and the utilization of health care services. BMC Public Health 11, 642 (2011) doi:10.1186/1471-2458-11-642.