There are more than 28 million small businesses in the United States. And each business owner has one main goal: to be as successful as possible.
If you’re like most business owners, you put your heart and soul into your company. So, how much time and money do you have to invest in your future?
Though it’s important to spend money on your operation, you need to take care of yourself, too.
That’s where investments come in. With the right strategy in place, you can grow your personal wealth without taking away from your company.
But where do you start?
Well, get ready. We’re about to go over the best investment strategies for small business owners!
1. Invest in Your Business
Does this sound a bit counterintuitive? Shouldn’t you be investing in things outside your business?
The short answer is, yes. But you also need to put money into your brand.
The more successful your company is, the more money you’ll make in the future.
So, what qualifies as a business investment? Anything that contributes to the growth and improvement of your company.
This includes buying new equipment to replace outdated machines. Or you could launch new products, hire new employees, and make repairs you’ve put off.
Investing in a business looks different for every business owner and it can change over time. The key is using your money to improve the source of your income.
2. Start with Low-Cost Stocks
If you’re like most people, you automatically associate the stock market with high-cost investments. This isn’t always the case.
Sure, some shares for big-name brands cost thousands. But others are available for just a few dollars.
The best way to boost your chances of success is to choose stocks in different industries with different levels of risk. If you’re not sure where to start, this website will give you some helpful pointers.
3. Pay Attention to Risk
Every investment carries a certain degree of risk. If the investment does well, you’ll earn a decent return and grow your income. If it doesn’t, you could lose money.
It’s important to pay attention to the risk no matter what you’re investing in. Why? So you can hedge against it with a diverse portfolio.
Buy shares and invest in funds that serve different industries. And always avoid investing all of your funds in a single company.
This helps reduce your risk of losses and increases the likelihood of consistent returns.
4. Start a Retirement Account
You need to invest in yourself as much as you do your business.
At some point, you’ll want to retire. And you’ll need a solid retirement account to cover your expenses when you’re not working.
So, start as soon as you can. Open a retirement savings account and make monthly contributions. If you already have one, increase your contributions if at all possible.
It never hurts to max out your contributions each year. And if you have extra money, consider opening a high-yield savings account or increasing your investment portfolio.
5. Create a Wealth Management Plan
There’s a lot more to wealth management than simply picking the right investments. And it never hurts to ask for help.
Find a financial advisor or Certified Financial Planner and work with them to create a solid strategy. They’ll help you separate your business’s finances from your personal finances.
And once they do, they’ll work with you to identify your goals and create strategies to meet those goals. You’ll still have work to do, but they’ll give you a solid plan of attack to get there.
6. Find an Accountant
Taxes are both time consuming and frustrating. And when you’re a business owner, you’re responsible for both your personal and business taxes.
Instead of trying to handle both yourself, hire an accountant. They’ll take care of the data entry, preparation, and filing for you.
But as an added bonus, accountants know the ins and outs of the tax code. This means they’ll spot deductions you might miss or not know about altogether.
And missing deductions is like leaving money on the table. The more you maximize your deductions, the bigger your tax return will be. And you can use that money to increase your investments or help build your business!
7. Get Smart About Your Budget
Let’s get real…you need a budget. And when you’re juggling both personal expenses and business costs, it’s easy to let the budget slip.
But spending more money than you need to takes a lot out of your profits.
Instead, get serious about your budget. Look at your past expenses and find ways to cut back if possible. Think about how much you can really afford to spend and stick to it.
The more money you save, the more you’ll have to use towards your investments.
8. Build a Cushion
You’re a responsible business owner and have plenty of savings in place to cover unexpected expenses for your company. But do you have the same for yourself?
If not, start putting a little extra away each week to create an emergency fund.
You never know when an accident might happen or if your business will shut down for extreme repairs. Having a cushion in place guarantees that you’ll be able to pay your bills and maintain your lifestyle.
And everything helps. If you don’t have much to spare each week, start with a small amount. Remember, $50 a week can make a huge impact on your savings account.
Try the Best Investment Strategies for Yourself
The best investment strategies for you might be completely different. But these strategies are a great place to start.
And the more savings you build up, the more room you have to try other tactics to increase your wealth. Once you’re ready to branch out, check out our latest posts for more helpful investment tips and tricks.