What To Do With Your Profits From Your Business!
Worried about what to do with your profits? I would not consider this a monumental problem in business unless you are a spendthrift so that is never a question! Yes, it is a good feeling when your business starts to turn over a profit due to your hard work. In this contributed article, here are some points to consider when that question about what to do with your profits arise.
If your business has started to become profitable, then you’ve done the hard part. There are plenty of startups who don’t get this far. However, with that freedom from the grind to break even, there also comes a certain loss of direction. Where do you go from here? How do you make the best use of profits?
Here are a few pointers business owners could use on what to do with your profits.
Give Yourself A Salary
You may have avoided paying yourself for running your own business in the past. It’s not uncommon for new business owners to become rather frugal while they lay the foundations of their empire.
However, it’s not recommended and now that you have some breathing room, you can feel free to start paying yourself a salary as Xero suggests. It allows you to build personal savings that serve as a buffer between you and the business account.
What’s more, the financial stress that can come with few personal earnings can affect your business decision-making abilities, so it’s better not to take the risk.
Put It Back Into The Business
Is your business the best it could be?
The answer is: probably not. You may not have as many team members as you need to fulfill the duties you’re currently straining under. You might have spotted hardware or software tools that could help the teamwork much more efficiently. You may even feel like your team simply deserves a better office.
Which investments you make are up to you, but there’s no denying that investing in the business creates a momentum within the team that encourages and empowers them to keep working to increase those profits.
Spread Your Investments
When it comes to earnings, don’t be afraid to invest in those, either. Look at the potential of using trading platforms like CMC Markets to start spreading out your investments a little. By diversifying your money, when one investment takes a hit, it’s less likely to put you at serious financial risk. Forex, stock, and bond trading can all help you generate profit all the quicker, which then improves the amount that you’re able to invest back into the business.
Create Some Protection
You’ve worked hard to get your business where it is, so make sure you don’t let it start sliding back down due to a few overlooked vulnerabilities. Take a closer look at the different kinds of business insurance you could use based on the risks you are most likely to face.
It’s a good idea to set up a buffer of pure cash that you can liquidate easily in times of emergencies that your insurance policies might not be able to cover by themselves.
Whatever you do, the only wrong answer is “spend it all”. You didn’t come all this way just so you could live a little more lavishly for a while before your nose is against the grindstone again. Use your profit to make it easier to profit in future.
Yes, you ALSO need to have a plan about what to do with your profits made from your business!
Images courtesy of Pixabay and Pexels.
How would you like to learn how to post on a blog like this one?
You can put your thoughts on paper but learning how to build your own blog is something different. If you have the right training it is not that difficult.
When you learn how to build your own blog you get to choose the things that you write about. You can also use the blog to make extra income. Here is where I learned how to build my own blog and connect with people who helped me along the way.
Click Here and see what it is all about!
View only
Hello there, I am 
4 thoughts to “What To Do With Your Profits From Your Business!”
So far I don’t have this problem, but I’m getting there. I’ve never even thought about business insurance! That’s a good thing to consider. And it’s always good to save!
This is a provocative post for any entrepreneur as we must all decide what suits our own needs as our business grows.
Hey there Dianne,
Thanks for stopping by. Yes, the good news is that you don’t have to wait until your business makes a profit to think about these things. You will be one step ahead and you will also be more prepared to put things into action as the ‘moolah’ starts rolling in. All the best and may the profits start rolling your way soon.
Michelle
Michelle,
It does take a while to see a profit in most online business’s. By the time you make a good income you forget to pay yourself. Most of my profits to this point pays for my online adventures, I have taken very little for myself. I will use this information to look into what to do with the profits after the bills are paid. It is hard to plan because of the ups and downs of income. I have seen some people fail because they spent all of their profits on eating out and clothes. What percentage of your profits should go into savings for a rainy day fund.
John
Hello there, John.
Thanks for stopping by. Great thoughts that you have expressed. Yes, making the profits will take some time, and taking the profits can be a ‘bad idea’ when you are not firmly established. Yes, once you are ‘there’, you need to remember to pay yourself and then also to reinvest in the business. I think you should also invest 10% into a rainy day fund. You ever know when it might come in handy.
All the best.
Michelle