5 Factors Managers Need to Consider for Business Investments

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How you choose to invest in your business will generally decide its fate. If you make wise investments, you are more likely to end up with a successful business. But if you fail to plan and invest smartly, the outlook is significantly bleaker.

 

1. Are you focusing on the bottom line?

When you’re running a business, it can be easy to get lost in top-line figures. If you know someone in the same industry just hired another 10 employees and hit a record for revenue, the competitive spirit can sometimes try and get the better of you. Don’t lose sight of what really matters for your business – at the end of the day, you may be running the stronger business with a higher margin of profitability. Make investments that work for your business.

 

2. Are your investments secure?

Whether you are lending to others, selling goods or purchasing assets for your business, ensuring your investments are secure is a good idea. That’s where tools like the Personal Properties Security Register (PPSR) come in handy – they can allow you to research the debt status on goods you are purchasing, as well as protecting your rights when selling. If your business will need to use the PPSR regularly, it may be worthwhile engaging a specialist to help you streamline processes when ordering searches or registering products. Try software from a company like GlobalX Legal Solutions to help you manage your interests (click here for more information).

 

3. Are you focusing or diversifying?

Have a strategy and stick to it! While it can be tempting to diversify as soon as you can, sometimes the better course is to focus on your business. When you tie up money in other investments, it leaves you with less for operational costs, which can put pressure on you to accept clients that don’t fit your model. This can end with large amounts of time being wasted or negative opinions being formed and circulated if the relationship isn’t managed carefully. Keep the cash internal until it makes sense to diversify, and then do so by investing in ways that you are comfortable with and knowledgeable about.

 

4. Are you investing in people?

Your business is only as good as the people who represent it. Hiring cheaply often seems like a good idea at the time, but keep in mind that one efficient, knowledgeable and intuitive employee is often worth at least two run-of-the-mill employees. Invest in the people that work for you and you will see returns in profits (and likely in the overall functioning of your office).

 

5. Are your investments smart?

This is perhaps the clincher – however you choose to invest your resources, have you put enough thought into it? And if you are investing outside of your business, have you researched the industry you are investing in? Recognising gaps in your knowledge is important; if you are unsure, it’s always better to get an expert on board. You might get lucky by throwing your money at the first opportunity that comes your way, but the chances of that happening are slim at best.

As a manager, making these sorts of choices are part of your daily routine. Getting them right is crucial to success of your business, so big picture thinking is essential. Do you prefer investing internally or externally in your business?

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