Every small business needs a way to make a little extra cash for the till. When small businesses are getting started, there is always a learning curve and money doesn’t actually start building until a few years down the road. Even then, there still may need to be a few more years before everything is financially settled.
In the meantime, small businesses can make a few investments to generate some passive income while they are building themselves up. Here is how to invest and what to invest your money in.
Calculate Your Risk
You don’t want to take all of your money and invest in something that will drain you. The market is volatile. It is up one day and down the next, and when it goes down, it can take everything with it. Sit with your financial advisor and figure out how much you are willing to risk without losing the business.
Once you know what you are willing to go without for some time (because some investments are long term) then place your money into that investment and see what you can possibly make off of that choice. But, what is a good thing to invest in? Let’s see.
Forex Trading
A lot of people think that forex and stocks are the same thing when in reality they are not. Stocks are shares of companies that you can make money off of while forex is all about investing in currencies. You can put your money in the American Dollar, Australian Dollar, Indian Rupee, or the British Pound. How these currencies grow on the market directly affects your investment.
In modern times, you can also invest in cryptocurrencies. These currencies are the hottest investments going right now as they are not regulated and are equal anywhere in the world. More people find it safer to trade, buy, and sell in cryptocurrencies making them huge money makers. Learn how to invest in Ethereum, Dogecoin, or Bitcoin.
Stocks and Shares
‘Old faithful’ is stocks and shares. Your small business can take some of its revenue and place them into everyday companies. As those companies grow and their stocks become worth more money, the more money you can place back into your small business. The dividends you earn from these investments can be used to give money back to investors or stashed away to maintain your company and keep it afloat.
Any advisor can easily tell you what’s worth investing in, how much to invest, and how long it should take to make some money off of that choice.
Money Market Funds
The lowest risk investment your company can make is a money market fund. These types of funds are great for paying investors while making cash for yourself. Money market funds are mutual funds that focus on low-risk securities and investments that are safe but don’t produce a high profit.
These funds focus mainly on cash, cash equivalents, and commercial paper. These are great investments to start off with until you can amass enough funds from your business to invest a little bit higher with a bit more risk.
Property
Property is a great investment for your small business because it can produce a huge return in a small amount of time. The best way to use property to your advantage is to own the building and the land your business is located on. When you are seeking investors and start-up cash for your business, the best thing you can do is seek an opportunity where you can buy the building where you want to set up shop.
When you own the property you can use it for other purposes like renting it out for storage, renting out other spaces to other businesses, and having the opportunity to borrow off the property if need be. Real estate is always one of the smartest investments you can have.
What Else?
There are other types of investments that your company should consider when you start seeing profits roll in. These are investments in people and products. These investments are what help keep you going once you start seeing a profit.
Invest In Your Team
Your team is your backbone and without it you are nothing. Investing in your team is the smartest thing you can do. Establishing things like incentive programs for a job well done or programs to keep the high level of productivity going is smart. Gym memberships, extra PTO, bonuses, and discounts for local businesses are all great ideas.
Incentive programs go hand in hand with reminding your staff that you care for their well being and their lives outside of work. When your team feels seen they will be loyal and they will continue to go above and beyond.
Marketing
Online marketing is one of the smartest investments you can make. Social media bridges the entire world and even if you are a small company somewhere in Europe, you can reach people from America to Australia to Africa. The more you can build up your social media, your website, and your ecommerce sites the better you will perform in the global market.
Ensure that you are paying good money for a marketing team that has the know-how to utilize these arenas to your advantage and grow your audience as big as it can get. Once you have your accounts set up, you can reach as far as you want and your growth will be rapid.
Conclusion
There are several other investments your company can sink itself into that will benefit you in the long run. The biggest piece of advice is to always be smart and only play with the money you know you have. Always invest in businesses that are not in your own industry as that is the equivalent of helping the competition. Also, always invest your money in retirement funds for yourself and your team as that is one of the biggest incentives to make sure a company does well.
When you are smart with your money you will see a bigger return for your risks and the financial choices you have made. Invest today and build a stable foundation for your future.
