So, You Want to Invest in Your Business?
Investing in your business allows your business to grow! Deciding to invest can be exciting and scary. You may be dreaming of expanding your location or possibly you’ve been wanting to save up some money so you can treat your team or cover education opportunities for them.
When you invest, you’re putting time and money into something with the goal to get a greater return. To most, it’s about expanding or growing your team, but investing can also be adding technology, or putting yourself in a stronger financial position by paying off debt or creating a reserve or emergency fund in case something happens.
Are you and your business in a position to invest?
Shopify (https://www.shopify.ca/blog/investing-in-your-business) has a great blog on what you need to know before you invest in your business. In light here are their three things you should know before you invest in your business:
- Your current businesses finances
- Your current personal finances
- Your goals for your business
We’ve said it before, and we will say it again;if you don’t know your numbers, you don’t know your business. Knowing your numbers allows you to know how much money you’re bringing in (revenue), how much money your spending, and what your profits are. If your business’s cash-flow is currently decreasing; it’s important to first focus on strengthening your bottom-line or leaning out areas you may be overspending. If you’re looking for some tips, we recommend checking out our tips on managing your inventory or increasing your cash-flow!
Shopify refers to the Profit First method, from the book Profit First by Mike Michalowicz. And where your money should be allocated. Between paying yourself, covering your operational expenses, saving up to pay taxes, and last but not least, profit for your business.
Aside from your business’s finances, it’s also important to look at your personal financial health and ensure that you’re in a place to invest. Additionally, when you invest in your business you’re able to gain more control over it. Meaning certain actions you take when investing in your business can allow you to reduce waste, control your costs, and ultimately become financially sustainable. Additionally, if you do have debts to pay off, that is the first thing you should do before you go further into investing in your business.
Investing in your business isn’t a bad decision. However, it comes to investing, you want to ensure that you can minimize the risk of your investment and maximize the outcomes. So let me ask you the question of this, why do you want to invest in your business? What do you hope to achieve?
It’s a misunderstanding the investing is constantly putting your profits back into your business. As stated before, investing can look like a lot of things. Your goal will be dependent on if you’re putting a lump sum of money in your business, incrementally putting money away for a future investment, or taking time to implement a new strategy or tool to create efficiencies in your salon. No matter your choice, investing is a calculated decision to help increase your cash-flow.
There are other ways you can invest in your business, such as technology. Technology has become a great way to help to simplify day-to-day tasks in your salon, such as scheduling appointments, tracking inventory, and even calculating the exact cost of hair color in every bowl in real-time.
SalonScale hair color management software has been proven to help salons ensure every last drop of hair color used in a color service is paid for. Helping them to cover expenses, expand their salon, and ultimately become a sustainable business.
What’s the next move?
Well, that’s up to you. Whether your ready to make a move and invest in your business or you want to get to know your number a bit better – that’s up to you. Like our friends at Shopify say, don’t let the actions of other pressure you. But if you’re ready, then you’re ready! And we can’t wait to see the moves you make!