The Art of Leveraging Profits: How to Make Your Money Work For You

As the recession nears, all industries, from commercial real estate to restaurants, are trying to find the best ways to spend their money. Fortunately, there are plenty of methods that work for most businesses, and they can help you build personal and professional-based wealth.

7 Ways to Make Your Money Work for Your Business

You’re in business to make money, and the best way to do that is to leverage your profits. Here are 7 ways to maximize your profits and make your money work for you and your business.

1. Create a Business Budget

This advice is as old as the concept of a budget itself, but do you currently keep one or stick to it? A budget will show you if you’re spending more than you can afford. Budgets also help you steer your money to where it matters most, like bills, paying down debt, and business goals.

Do your best to remove or reduce any unnecessary expenses, and figure out a sensible savings plan for your business. Take this time to set financial goals and think about what you want to achieve with your money, such as starting the process of building a subscription box business.

2. Open a High-Yield Savings Account

Before you send your money off to do its thing, you’ll want to open a high-yield savings account. In this account, place six months of operating expenses inside. An FDIC is one of the best places to store your money, as their interest rates often exceed 1% and are located online.

3. Invest More Into Assets

The stock market and real estate industry are two major ways business owners can see their money grow over time. It’s a good idea to hire an investment advisor for this purpose, as novice investors may make the mistake of selling too early. This is especially true during a recession.

If you want to invest in your business directly, consider spending more on office equipment, employee wellness, and remote working options. Happy employees are less likely to quit, and that’s a good thing for your wallet, as turnover costs can be 30%-400% of an employee’s salary.

4. Expand Your Customer Base

One of the best ways to increase your profits is to increase the number of customers you have. Look for new markets and target them with marketing campaigns, or focus on growing your existing customer base through loyalty rewards, referral programs, or quality customer support.

5. Pay Down Business Debt

Having a bit of debt isn’t a bad thing, but you shouldn’t take on more than you need to. If you take on a high financial burden, you run the risk of defaulting on your loans. This leads to a poor credit score. Low credit scores may make it difficult for you to borrow money in the future.

While it sounds counterproductive now, using your profits to pay down debt will give you more money to work with later on. Speak to a debt specialist at the bank to consider your options. One great thing to do is pool your debt into one low-interest loan, reducing your payments.

6. Become a Partner in a Business

Instead of taking on the stress of building another business, become a silent partner in another venture. Similar to other forms of investing, this avenue can come with some risks. Make sure to look over financial statements, projections, and business plans, before taking the plunge.

7. Hire Right and Offer Value

Never forget that the biggest asset your company could hold is valuable employees. Without employees, you can’t run your business, make a profit, or leverage anything you own. If you’re not investing in yourself, you should invest in your employees and your onboarding process.

To understand where your process may be lacking, create anonymous surveys employees can fill out. Do you need to make changes to your company culture? Should you hire fresh talent? Once you’re able to find the best solution, you’ll see your profits (and your reputation) soar.

By implementing these strategies, you can leverage your profits and get the most out of your business. With a bit of hard work and the right approach, you could even maximize your profits.