Every small business could use some additional income, regardless of industry. One of the best ways to pad your bottom line is by making smart investments and conducting thorough research.
There are some very popular options such as stock trading and forex trading that many small businesses use to maximize their profits.
However, internal investments are equally beneficial and are often neglected.
This post will go over some investments your small business can make to maximize your overall profit.
Be sure to check out SOCAs Pooled Employer Plan (PEP) if you are looking to pool your plan with other employers.
In this section, we will focus on investments that you can make outside of your business. Remember that all investments carry risk, even low-risk investments, so do your research and familiarize yourself with the market before you invest your capital.
This is one of the most straightforward types of investments. Sometimes called ownership investments, when your business invests in shares, you own a small portion of another business and receive a proportional amount of their profits.
Shares fluctuate daily (or more accurately whenever the market is open) and the more you invest in one single company increases your risk.
Research stocks you are considering purchasing carefully and be sure that you know the market. The best returns come from a base of knowledge.
Forex trading is much like investing in stocks, but the main difference is that forex trading deals with investments in foreign currencies.
There are fewer options when dealing with forex trading. However, there are more complexities to consider as well due to hourly trading.
When forex trading online, be sure to stick with reputable platforms like ETX Capital to ensure that your investments are secure.
Money market funds are simple, low-risk investments that many small businesses take advantage of. This type of investment is a mutual fund that involves highly liquid, near-term instruments.
The name of the game is high liquidity and low risk.
However, due to the less volatile nature of the market, returns on investments are lower than other types of investments.
Always be sure to max out your 401(k) accounts for the best returns. Small businesses and solo 401(k)s can contribute up to $58,000 annually. SEP IRAs work in a very similar way but do not involve creating and administering a 401(k) plan.
These options offer tax deferral based on the amount invested and contribution levels for the plan.
If you are aiming to pool your plan with other employers, then check out SOCAs PEP here.
Businesses can purchase up to $10,000 in Series I savings bonds annually. These bonds are indexed to inflation and often result in higher interest rates than many CDs and money market accounts.
These savings bonds must be held for one year and have a three-month interest penalty for years two through five if you redeem them.
This section will go over some internal improvements you can make inside your company. These improvements are often neglected as business owners are comfortable with the status quo. Consider these options to help your business continue to improve.
Many small businesses lack a disaster recovery plan or business interruption insurance.
In a survey done by Manta, 61% of small businesses lack a disaster recovery plan and 60% do not have business interruption insurance.
Consider what would happen to your business in the event of a natural disaster like a tornado or flood. Could you afford to shut down for weeks or even months?
The companies that are best at hiring, will repeatedly hire the best employees. Employees determine a companys future, so if you are not hiring the best, your competitors are.
Interview applicants thoroughly and invest heavily in training resources.
Be sure that you are not hiring out of need. If you are desperate, you are less likely to find qualified employees.
You need to advertise yourself if you hope to make more sales. Advertise your companys bestselling products and services to see the best return on investment.
Be sure to know your customers needs and pain points for improved sales.
Also, be sure to make consistent investments in search engine optimization (SEO). Better SEO helps you get found on the web and provides an excellent return on investment.
For every $1 spent on SEO, you get $2.75 back.
If you want your small business to succeed, then you must focus on investing your money wisely.
External investments help increase profits, while internal investments boost productivity.
Another thing you can do to help your small business soar is to focus on proper networking. One of the best ways to network is through local and regional chambers of commerce.
If you want access to the best network of small and medium businesses, then you need to encourage your local chamber of commerce to join forces with the Southern Ohio Chamber Alliance.
SOCA is focused on providing excellent benefits packages for small businesses all over the state of Ohio. Find out what SOCA can do for your small business. Encourage your local chamber of commerce to join SOCA now.
Looking for additional savings and benefits? Check out SOCA PEP to see what we can offer your business.