While setting up a business is hard, running it properly to ensure its growth and profitability in the long term is also a challenging task.
Gaining new customers is the main focus of any new business owner to achieve its business’s survival; once this latter starts to be profitable and generates earnings comes the question of reinvesting those earnings to improve or stimulate the business’ growth.
Here are different kinds of investments that can be made to improve its profitability, based on my own business owner experience, which does not mean these are the only ones but should be doable for any business owner.
a. Invest in yourself
Investing in your own personal growth, improving your knowledge is by far the most effective investment any business owner can make.
It is the cheapest investment you can make; books that will change your mindset, your focus, or your work effectiveness range from 10 to 60 dollars, and their impact can be huge.
In my case, that’s a book that set me on the track of launching my own online business; the 4 hours workweek is a best seller written by Tim Ferris that cost 20 dollars and changed my focus, inspired me to set up my business and be an online entrepreneur.
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The return on my investment has been massive, but it took time; investing in your knowledge will not give you the return you expect immediately; it will take weeks, months, or even years to see the results.
Now that my business is running fine, I focus on reading at least one book per month to educate myself on marketing, sales, and human resources investment. I have experienced firsthand the power of learning through constant reading and recommend it to anyone wishing to grow its business.
Doing so, I have spent around 1200 dollars in the last 5 years through book education and multiplied my business revenue by 14. This is by far the best investment I have ever made to grow my business.
While books are the easiest way to learn something new and improve one’s skills, It is also possible to do so through online webinars, conferences, or online courses. I personally have used those to work on myself.
b. Invest in your employees’ skills
Employees are not different from the business owner; their skills can be greatly improved with the correct education.
As explained here above, if you can incite your employees to read the correct books and check online free courses to expand their knowledge, they will benefit from it in cleverness and effectiveness.
This is not an easy task, and not every employee will be willing to do so. In my case, I manage a team of 3 employees, and only one is willing to get this kind of education.
Believe it or not, he is the most efficient of the team, the most profitable one also, and the one with the biggest wage.
Reading is not the only way to improve employees’ knowledge; education about a technique, process, or learning to improve the use of existing machinery is a great way to boost their work effectiveness.
Back in 2018, we were using a vacuum casting machine in our Jewelry workshop, and we were encountering some quality issues. I called a company specializing in selling this kind of machine, and offering training to a jewelry workshop like mine.
We had an expert staying one week with our team to set up a good process and educate my team to improve the machine’s casting process.
This one week of education allowed us to suppress quality issues from our casting process and divide by 3 the time required to finish our jewelry. It has been a very profitable investment.
c. Invest in machinery and software
Mechanizing your business and using software to do some tasks is a great source of time savings for any business. I think this will be pretty obvious to anyone.
Business working on making products will improve their production cost through the use of the appropriate machinery, while any tertiary business will save a huge amount of time using the correct software.
d. Invest in your own real estate
Any business needs a place to operate. While renting is the best option at the beginning or for short-term periods, buying your own business’ place is imperative.
Because you will still pay for it, but be the property owner, and the value of this latter might improve over time. This will allow you to get better loans in the future to offer more guarantees to your bank.
Also, being the owner of the place allows you to remodel the place following your business’s needs. Whereas you require more space for production purposes or for offices, you will not have to deal with the owner’s restrictions.