Investment opportunities for small to mid-sized businesses.
You’re making money. Now What?
You rode the roller coaster ride of starting a small to mid-sized business. Then, one day, you looked at the books and realized your business is making money. Congratulations! Now what?
Here’s what experts recommend:
Reinvest in your business.
Financial journalist and digital consultant John Boitnott recommends “a reinvestment hierarchy.” First, cover current cash flow and expected expenses. Second, training and benefits for your employees. Third, improve infrastructure and marketing. Finally, look at external investments.
Establish a retirement fund.
Offering a retirement plan for your employees may have been impossible when you were struggling to launch your business, but once you can, you should.
“When creating your plan,” financial blogger Robert Berger writes, “you have to not only think about your personal goals, but also about your goals for your business.”
There are several retirement plans for small to mid-sized businesses, including the IRA, SEP IRA, 401(k) and defined-benefit plans. Consult a Northwest retirement expert for the advice you need to establish the right retirement strategy for your team.
Invest in the market. Financial markets are an attractive option, and it’s easy for wannabe investors to dive in – with or without the help of a professional.
This can be tricky, as Jeff Brown of The New York Times notes, because “if you devote 60, 80 or 100 hours a week to your business, do you really have time to read 100 prospectuses to find 10 good stocks? Many financial experts say that despite their business acumen, business owners tend to be fish out of water as investors, quick to fall prey to overconfidence and a sweet line from a self-serving adviser (or a brother-in-law).”
Brown suggests business owners dabbling in the market “keep it simple” while minimizing fees and taxes with indexed mutual funds and exchange traded funds.
Investments: Not FDIC Insured. Not Bank Guaranteed. May Lose Value.
Insurance: Not FDIC Insured. Not Bank Guaranteed. May Lose Value. Not a Bank Deposit. Not Insured by Any Government Agency.