About half of small businesses survive after the first five years, while only a third make it past the 10-year mark, according to the Small Business Administration. One of the biggest reasons why small businesses fail is the inability of entrepreneurs to direct capital effectively. Many of them invest in the wrong things while some never invest at all in their business. As a small business owner, you have limited capital to work with, so you always have to ensure that every investment you make into your business is justified in both the short and long run. You must resist the temptation to spend your profits frivolously and instead, find smart ways to invest and re-invest them so that you can speed up the growth of your business.
Invest In Employees
Chances are you started your business with few or no employees at all. As your business starts growing, you might find it hard to perform all the tasks effectively due to an increased workload. There may also be tasks that you currently handle but you know would be done more efficiently by an employee who specializes in them. In such cases, hiring more employees is a great investment as it reduces your workload while improving efficiency and productivity in your business. Investing in employees doesn’t always mean hiring more of them. You can also invest in your current employees by training them regularly and providing them with the tools, software, or materials they need to increase productivity.
Invest In A Business Vehicle
Buying a vehicle is a large investment for any small business, but it can be a very useful tool especially if you do deliveries or need to move around a lot as you conduct your business transactions. On top of boosting your efficiency, a vehicle can help you reduce your tax burden since most of its maintenance costs can be written off when you’re filing your business taxes. Also, if you brand it properly, it can act as an advert for your business everywhere you go. However, being a large investment, you should be thorough when comparing the different vehicles in your price range so that you end up with the perfect fit depending on your business needs.
Invest In Advertising
The growth of your small business depends on your ability to generate profit. Profit is a product of sales, and sales are a product of employing effective marketing strategies. If you want to grow your customer base or retain the customers you already have, you will need to continually invest in advertising. Marketing strategies come in all shapes and sizes, and many of them will require a lot of funding, especially if your target market is scattered over a wide geographical area. It could be costly, but it will be worth every penny.
Your goal for your business should be to grow so much that it’s no longer categorized as a small business. To do that, you’ll need to find smart, well-calculated investments that will help take your business to the next level.