It’s a big milestone when your business starts to turn a profit. But once you’re done celebrating, you’ll need to decide what to do with the extra money.
You can take the funds out of the business and use it for personal means but that generally isn’t a recommended way to pay yourself. Instead you should continue to pay yourself a consistent salary and reinvest the profit in the business. You can hire more employees, open a new location, or increase your marketing – to name a few obvious ideas that should result in increased revenue.
But there are lots of other investments that you can make in your business that might not be so apparent. Here are four ways to better your business that you may not have considered.
1. Upgrade your back-office software
Depending on your business and the technology you use to run it, you might be able to save time and cut costs by upgrading your back-office software.
If your business uses accounting, payroll, point-of-sale, invoicing, bill payment, or expense tracking software and you haven’t upgraded in the past five years or so, it’s probably time to look into more modern options.
Cloud software is rapidly replacing older desktop programs since it’s accessible through any computer or mobile device that can connect to the internet. And in many cases, different systems connect and share data so you don’t have to spend time punching in numbers.
2. Purchase more efficient equipment
Like software, your business might use equipment that works just fine but could be replaced with something newer and more efficient.
For example, professional service businesses could increase productivity by investing in new computers, workstations, and teleconferencing equipment. Home service contractors might be able to get their jobs done quicker and easier using the latest and greatest tools available. And restaurant businesses could increase efficiency and lower costs by purchasing new refrigeration units or cooking equipment.
A company’s assets, such as equipment, depreciate over time. This means you can claim the expense on your taxes until the asset is fully depreciated. Once that happens, you’re free to keep using the equipment but do not get any tax benefit and you might also have to pay for maintenance and repairs. You can learn more about replacing fully depreciated equipment in this blog post.
3. Cut costs by “going green”
You can lower your utility bill and possibly get tax benefits by “going green.” There are of course varying degrees of energy efficiency upgrades you can make. You can go as far as replacing a fleet of vehicles with hybrids or installing solar panels on your building. Or you can keep it as simple as making sure your office powers down at the end of the day or cuts back on the amount of paper it uses.
Even the little things can add up to significant energy and cost savings over time. You can consider hiring a company to perform an energy audit on your business. These service providers can do a thorough review of your business’s energy consumption and let you know where you can improve.
4. Invest in your employees’ growth
Perhaps one of the least considered ways to grow a business is to invest in the people that help run it. This doesn’t necessarily mean you have to give raises and bonuses, especially if your staff is already properly compensated. Instead you can offer to pay for training or education, which should result in a more skillful and knowledgeable staff.
There are a lot of good reasons to offer an education benefit. The employees who take advantage will obviously learn new skills that give them the ability to do more for your business. They’ll also likely be happier and more loyal, knowing that you care enough about their professional development to invest in their growth.
The ideas outlined in this blog post aren’t going to apply to every business. But hopefully you’re inspired to look for other areas of your business that can be upgraded. Exploring your financial records can shed light on where exactly your money goes so you can identify what needs to be improved.