Are you an entrepreneur or small business owner? Do you want to invest in your business for maximum profit and fast growth? If YES, i advice you read on.
One of the most crucial factor an entrepreneur or manager must keep an eye on; is the business expenditure. Big corporation with millions of dollars in budget can afford to spend money on even the most absurd things; they can afford to gamble with a few million dollars on research but not you.
You are probably a startup company; or a small business owner with limited capital and you have little room for waste. So you have to make sure that every investment in your business is justified; both in the short and long run.
“Waste of resources is a mortal sin at IKEA.” – Ingvar Kamprad
Effective capital direction is essential to success in business. Now we must all invest in our business at one time or the other; but I want you to know that all business investments are not equal. Some business elements are more important than others; but unfortunately, these important elements are often the most ignored.
Most entrepreneurs invest in stocking inventory; while ignoring other little things that matters. Now what are the little things that matters? How should an entrepreneur invest in a business?
The Two Most Important Elements You Must Invest in your Business
“Everything we earn we need as a reserve.” – Ingvar Kamprad
I believe this point is quite clear. An entrepreneur that is concerned about growing a business must first demonstrate commitment to growth by re-investing the business profits. Once a business kicks off and profit begins to pour in, you may be tempted to take out cash or look into other industry. At this point, effective capital direction and concentration is highly needed.
“Watch the costs and the profits will take care of themselves.” – Andrew Carnegie
To build a successful business, you must resist the temptation to divest your capital or profit; you must resist the urge to spend your money on frivolous activities. You must invest your re-invest your profits in your business; you must seek ways to increase efficiency and sales. You must concentrate your resources on the core tasks that matters.
“Concentrate your energy, your thoughts and your capital.” – Andrew Carnegie
“The best thing to invest in your business is your time. To schedule, plan and use time effectively, know your turf and know your objectives. Assess the obstacles and opportunities, then devise your strategies.” – The Mafia Manager
Warren Buffett ran Berkshire till his 80’s; so did Ingvar Kamprad. J. Paul Getty, Steve Jobs and Mary Kay Ash ran their companies until death. What does this portray? It simply means that an entrepreneur must run his/her business; an entrepreneur must be at the helm of affairs. You may have a team of competent managers but nothing beats being part of the core team running your business.
“I have run engineering since day one at Oracle, and I still run engineering. I hold meetings every week with the database team, the middle ware team, the applications team. I run engineering and I will do that until the board throws me out of there.” – Larry Ellison
After many years of building a business, I have come to observe that nobody can run your business better than you. You can have the best managers in the world but you can never find someone who is passionate about growing your business as you. I am saying this from experience.
Your competent managers and professionals will work hard for your business, but their effort will have to be proportional to their compensation. But an entrepreneur that started a business from the scratch will be willing to work for free just to see his business succeed.
“Time is your most important resource. You can do so much in ten minutes. Ten minutes; once gone is gone for good.” – Ingvar Kamprad
Capital alone is not enough; you need to invest time to grow your business. Just think of Warren Buffett and Steve Jobs; they worked hard for their various companies, yet they were among the lowest paid CEOs in the world. Invest time in running your business; it pays in the long run.
“It’s my job for Oracle, the number two software company in the world; to become the number one software company in the world. My job is to build better than the competition, sell those products in the marketplace and eventually supplant Microsoft and move from being number two to number one.” – Larry Ellison
Now that I have listed the two important things you must invest in your business, I will now proceed to highlight specifically how to invest in your business. Now what must you invest in to grow a business successfully? You can find your answer below.
9 Smart Ways to Invest in your Business and Maximize Profit
a. Invest in yourself
“To succeed in business, to reach the top, an individual must know all that is possible to know about that business.” – J. Paul Getty
You are the entrepreneur and this means you are the chief decision maker in your business. The success or failure of your business largely depends on you; so it’s important that you invest in yourself first. Even before starting a business, you must invest in yourself.
You must invest in developing leadership and business skills. You must learn how to sell, negotiate and work with people. More important than all, you must know everything about running a business; from accounting, sales and marketing to product development, etc.
“The ability to sell is the number one skill in business. If you cannot sell, don’t bother thinking about becoming a business owner.” – Rich Dad
b. Invest in marketing your business
The sustainability of a business is highly dependent on the management’s ability to generate profit; and profit is a product of sales, while sales is a product of effective marketing. As part of your marketing effort, you must strive to promote your business on the web.
“When people are placed in positions slightly above what they expect, they are apt to excel.” – Richard Branson
Most entrepreneurs don’t invest in their employees; and they don’t see the need to. But if you aim to build a successful business, you must invest in your employees; you must invest in increasing their knowledge base. Another way you can invest in your employees is to train them regularly.
“Outstanding leaders go out of their way to boost the self esteem of their personnel. If people believe in themselves, it’s amazing what they can accomplish.” – Sam Walton
You should also provide them with tools, software and materials that will make their task easier and increase productivity. You must strive to keep your employees happy. You can achieve that by paying them well and encouraging them with incentives. In fact, just maintain a good relationship with them and you will bring out the best in them.
“If you pick the right people and give them the opportunity to spread their wings and put compensation as a carrier behind it, you almost don’t have to manage them.” – Jack Welch
d. Invest in building a brand for your business
“If you are not a brand, you are a commodity.” – Robert Kiyosaki
Most people believe that branding is for big corporations with millions of dollars in advertising budget but it is not so. The game of branding is now an all-comers affair. Both big and small businesses can now build their brand without breaking the bank.
You don’t have to wait till you have a million dollars in revenue; you don’t have to wait until your business gets big before building a brand. Start small and work on your brand from the beginning; this will enable your brand grow alongside your business.
e. Invest in your company’s communication system
“Team, it turned out that Michael Dell wasn’t perfect at predicting the future. Based on today’s stock market close, Apple is worth more than Dell. Stocks go up and down and things may be different tomorrow but I thought it was worth a moment of reflection today.” – Steve Jobs
One of the most important, yet often ignored systems of business is communication. In fact, communication is so important that no business can survive or grow without it. So you must invest in your business communication system. You must ensure that there is a smooth flow of information between the management, employees, customers, suppliers and investors.
“The customer is our business.” – Peter Drucker
The primary reason a business exists is because of the customer. Without the customer, there is no business; so you must invest, not just in finding new customers but also in keeping your existing customers happy.
Also, you must bear in mind that it is cheaper to retain a customer than to find a new one and business thrives on recurring sales from loyal customers. So keep your customers happy. You can do this by initiating a loyalty program, giving them incentives and maintaining a close relationship with them.
“Courteous treatment will make a customer a walking advertisement.” – James Cash Penny
“The ability to deal with people is as purchasable as a commodity as sugar or coffee and I will pay more for that ability than for any other thing under the sun.” – John D. Rockefeller
No entrepreneur ever built a successful business alone; successful businesses are built by a network of people. That’s why my mentor Robert Kiyosaki said that:
“The richest people in the world build networks; everyone else is trained to look for work.” – Robert Kiyosaki
To become a successful business owner, you must build a network of people and businesses around yourself. A good way to invest in building relationships is to form strategic partnerships with other businesses. You must also maintain a close touch with other entrepreneurs, professionals, advisors, VCs, angels, etc. Before rushing to build a network of business people, you must make honesty your watchword. You must be a person of integrity.
“It takes 20 years to build a reputation and only five Minutes to ruin it. If you think about that, you will do things differently.” – Warren Buffett
“Business is not just doing deals; business is having great products, doing great engineering and providing tremendous service to customers. Finally, business is a cobweb of human relationship.” – Henry Ross Perot
h. Invest in information
“The most meaningful way to differentiate your company from your competitors, the best way to put distance between you and the crowd is to do an outstanding job with information. How you gather, manage and use information will determine whether you win or lose.” – Bill Gates
Information in the hands of a smart entrepreneur can become a competitive advantage. Having the right information and acting on it is the sole reason why some companies dominate certain industry. So you must invest in acquiring information. Information can be industry news and happenings, trend analysis, research work, inside information, etc.
One of the most important information an entrepreneur must acquire is information about the competitor. You must invest in obtaining information about your competitor and you must be prepared to act on such information. You may think you don’t need this but you do.
“Therefore I say: know the enemy and know yourself; in a hundred battles, you will never be defeated.” – Sun Tzu
i. Invest in legal protection
A lot of entrepreneurs rush into business without first covering their backs; they launch their products while failing to protect it. This is one of the most dangerous mistakes small business owners make. Therefore, it is advisable that you seek legal protection for your business. You might think it’s too expensive but more expensive and painful is the loss of a business due to poor legal structure.
A good way to start protecting your business legally is by choosing the right legal business entity. Patents, trademarks, copyrights are also good legal shields for protecting your business assets.
In conclusion, these are the few things you must invest in today. Even if you have limited operating capital, investing in the highlighted elements will produce positive results on your business both in the short and long run.