After a few years of self-employment success, it could be time to take your offerings to the next level. You may wonder about reinvesting in your business. Is it time? And, if so, how should you go about it? Here are a few best practices to consider when you’re ready to make this move.
How to Know If It’s Time
Your first few years in business are all about getting your feet wet and making sure you can ride out the storm. If you can’t seem to get past a certain point — even if you’re making a living and your business is consistently profitable — you might be ready to reinvest. It’s not just about surviving anymore, but actually thriving. Ask yourself: Where do you want to be in the next year? In the next 10 years? Reinvesting can push your business to new heights.
In this scenario, “reinvesting” is putting your income back into your business in the hopes that it will generate even more money. Just like investing in the stock market is all about beating the cost of inflation and making your money work for you, reinvesting in your business is all about taking your profit and putting it toward additional income-producing avenues.
Where Should I Reinvest?
When you’re ready to reinvest in your business, consider taking one of the following three routes:
Is there something you can learn that will add value to your business? For example, will learning how to code or use Photoshop help you add additional services to your existing offerings?
Consider the types of professional growth and educational avenues that could help elevate your business. Whether you pursue a certification, a degree or an online skills-based training course, you’ll spark ideas that can help you develop new revenue streams for your business.
After a few years in business, it’s time to take yourself seriously as a business owner. You’re not “just a freelancer” anymore. To level up, you may need to upgrade your website to something faster, more user-friendly and SEO-conscious to up your traffic and score more conversions.
When it comes to advertising, consider your options. Perhaps you’d like to invest in Facebook or Instagram ads, or launch a local outreach campaign to build a strong network within your community. By investing in marketing initiatives, you can get your product or services in front of new eyes — bringing in a greater volume of potential customers.
3. Professional Assistance
So, you’ve been riding solo for the past several years, and you’re good at it. But let’s face it: You’re only one person. Getting a little help could make your business even stronger. If you hire a virtual assistant or outsource some of the work involved with your day-to-day operations, you could start working on your business rather than in it. Get the administrative tasks off of your plate, and focus on the core work that will empower you to take your offerings to the next level.
Making Sure It’s Worth It
Investing money back into your business can be a risk, but if you have a plan to analyze and break down your efforts, you can approach it wisely. Consider working on each of the above efforts for a three-month trial period. Make a plan for how you’ll approach each investment, and map it all out. Ask yourself:
How long will each investment take, time-wise? Is it ongoing, or a one-time effort?
How much will each investment cost? Can you break it down per day? Per month? Per year?
Once you’ve made these projections, track your efforts and make sure you’re seeing a return on your investment. In other words, are you making more than you’re putting into the initiative in question — or at least breaking even? Or are you spending too much time on your investments, and not seeing a change in your profit? As you track your progress during the trial period, you can adjust accordingly and experiment.
The Do’s and Don’ts of Reinvesting in Your Business
It all comes down to understanding what you should and shouldn’t do on the road to expanding your business. Here are some simple rules to keep in mind:
- Track your progress.
- Plan out a strategy for growth.
- Align your investments with your overall business and values.
- Do what helps you focus on your core business (i.e., what makes you money).
- Reinvest a percentage of your profits back into your business (some say up to 50 percent — but ultimately, you have to decide what works for you).
- Plan your exit strategy or the ultimate goal for your business: Are you looking to get acquired or retire?
- Give up if you don’t see results immediately. It can be a process.
- Try too many things at once.
- Invest so much that it hurts you financially.
- Follow the hype of what everyone else is doing: Remember to focus on your business.
- Take money from retirement to reinvest in your business.
- Take out loans to reinvest in your business, unless absolutely necessary. If so, look for the best rates and read all of the terms.
Now that you have a few years of business experience under your belt, it may be time to take the next step. There are plenty of ways to reinvest in your business: Just be sure to make your investments carefully and thoughtfully so that you and your business can come out on top.