Handling a small business doesn’t only mean sorting out day-to-day activities.
If you want your business to thrive and grow, you should think outside the box.
In other words, the income you generate directly from your projects shouldn’t be the only revenues coming to your business account.
What you should do is consider some other options that would improve the financial stability of your business. Ensuring sources of passive income and making investments on the side are some of the ways of diversifying the inflow of your assets.
In this guide, we’re going to discuss five frugal investments that will add to the growth of your business.
#1 Online courses and tutorials
People who have never run a small business before should spend a lot of time learning about SMB-management and other relevant topics.
Because of that, making a list of courses for SMB-owners that are relevant for your niche is a nice beginning. Some SMB-owners need to improve their soft skills, in terms of management, while others might want to learn how to build a product from scratch. No matter what you’re interested in, there are numerous courses that can make you a better business owner.
Apart from that, ensuring steady and relevant professional development and training of your employees is a must. From online security and digital marketing to the core activities your employees need to carry out, help them become qualified professionals so they can contribute to your company.
#2 Sharing profit with employees
To continue the story about employees from the previous paragraph, business owners must understand that their employees are valuable assets. This is especially the case with SMB-owners, who usually rely on a small number of people as they’re starting their venture. If you choose these professionals carefully, your business will be more successful.
One of the best ways of showing trust and loyalty to your employees is to set up a profit-sharing plan. This investment will ensure that one part of the net profit your business generates is shared with your employees. You can call it a bonus, a reward, a thirteenth salary, whatever you prefer. When your employees know that they will be additionally rewarded for their effort, they will work even harder to contribute to the success of your business. It will strengthen their loyalty to you, as well.
#3 Raising brand awareness
Aside from investing in your employees, it’s also important to invest in your brand.
The most efficient strategy to build a sturdy and influential business trademark is raising brand awareness.
Since this is a broad concept, let’s break it down into several chunks.
New businesses need to catch the eye of their public audiences, i.e. they need to inform the world about their existence.
First and foremost, you can offer some trial periods so that your potential customers can try your services for free.
Businesses operating in the eCommerce niche can launch a special campaign with discounts, coupons, and freebies. When you’re starting from scratch, offering lower prices is a logical start to generate your first leads.
Furthermore, new SMB-owners should utilize the power of social media. Launching a business page on Facebook and Instagram and sharing your business ideas and offers there is a nice start.
In that light, every new business needs a website, as well. The marketing experts from a web design company from Houston claim that having a website improves the online operability of every business. This is a sort of an online shop-window, plus, it adds to the trustworthiness of your business.
#4 Investing in professionals
As your business keeps growing, partly thanks to the investments described above, it’s time to obtain new acquisitions on the professional side. For that purpose, you can hire a recruiting agency, describe what kind of professionals you need to make your business stronger, and let them do the job.
On the other hand, you can search for the right experts to fit into this slot from your business contacts and your network of associates.
Also, think about giving referral bonuses to your existing employees who refer you to a skillful and experienced person for that position.
The more investments you make in new employees and managers, the higher return on investment you can expect. Of course, these acquisitions should be made when you have enough assets, i.e. when your business is on the rise.
#5 Form an emergency fund
One share of your business profits should be used for forming an emergency fund. No business owner should ever allow that their business depends solely on the current projects and payments coming from it.
If you want to ensure a bright business perspective, making business savings is a must.
In terms of this emergency fund, it can be divided into several different sections. For instance, one part of these savings might be reserved for your employees’ salaries. Another part could be used as a special fund for covering your overhead expenses in case of liquidity issues.
Having an emergency fund is important in case you get sued by any of your clients for any reason whatsoever. You don’t want such decisions to affect your daily business operations.
For all these reasons, a certain percentage of every payment to your business account needs to be directed to this emergency fund.
A business is like a household. If you spend your assets only on current affairs and leave nothing aside, your household will stagnate.
But if you want to ensure the constant and seamless development of your business, you must invest your money in other things. Still, make sure to invest your money in safe assets. So, investing in your own education, your employees, and your brand are wise investments. Together with a special emergency fund, they will serve as a firm base for adequate business growth.