Some problems are better to have than others – and this has to include finding that your business is holding on to excess profits at the end of the financial year. It’s a sure sign that things are working well, you’ve got plenty of business and the future is looking hopeful.
While it’s always going to be a good idea to keep the majority of your excess capital as a buffer against the unexpected happening, there are also some very good ways to make use of money that’s somehow leftover – and here are just five of them.
Pay off debt
Unless you’re very fortunate, your business will be carrying some form of debt. It may have been loans that you took out for equipment or company vehicles. Or it may just have been to get hold of some capital to get the business up and running. Whatever the reason, you’ll be paying interest on the loans so a first priority should be to reduce the amount you owe as soon as you can. It may be that you want to hold on to a proportion of the debt, and that’s fine too, but cutting the amount is a must.
Organize a company retreat
Presumably, if you’re doing well, any employees you have are playing their parts too. So either instead of or as well as, giving them a bonus, why not consider taking them on a company retreat? This can serve a number of purposes, as well as being a reward. For example, it’s a great bonding and team-building exercise. It also gives everyone a chance to think about the future of the business while away from the day-to-day. But, to make sure everyone gets the most from it they possibly can, it’s a question of planning it carefully beforehand.
Seek out forms of investment
While there are many forms of investment to engage with, forex, or foreign exchange trading, is one that beginners can learn more about easily. For the uninitiated, forex trading is the practice of speculating on currencies or, to be more precise, on currency pairs and whether the exchange rate will rise or fall. Once the preserve of banks and other financial institutions, these days there are numerous trading platforms that anyone can use, not to mention a great deal of online advice about how to go about forex trading. It’s also an activity that you can try out risk-free by using one of the many demo accounts available. Then, if it seems to be working for you, you can start to speculate for real.
Become a peer-to-peer lender
If you can remember the hurdles you had to negotiate when you were starting out, raising finance may well have been one of them. If you’d like to give other start-ups a helping hand, now you may be in a position to do this, then why not join one of the many peer-to-peer lending schemes? You can set the interest rate that you’d like to receive and the amount you’re prepared to lend. You’ll even be able to stipulate the sort of business you’d like to help out.
Stockpile business essentials
There are always going to be consumables that your business needs. While these may differ according to the field you’re in, you’ll probably be able to predict what your annual requirements will be. Using excess cash to buy as many as possible of them upfront could prove to be a money-saving move as their price is likely to increase in the future and you’ll have to pay more – cutting into next year’s profits.
So, hopefully, these have given you a few ideas about making your hard-earned profits work a little harder for you in return. Now it’s time to give some of them a try.