Your Business is Turning a Profit and Doing Well- What Next?
If business is doing well and you’re getting plenty of customers, making money and earning a healthy profit then that’s great. But it doesn’t stop there, if you want to continue doing well you need to futureproof your venture so that you can give yourself security and keep trading for years to come. Here are a few ways you can go about it.
Pay off your debts
Most companies start off in the red. Once you’re already established in business, you can set up future companies using profits and this isn’t an issue. However, if this is your first venture, you might not have started with much cash (unless you were fortunate enough to have plenty of personal savings that you could use). For this reason, you’ll have utilised business loans, and other forms of credit to get your company off the ground. When you have premises to hire, a website and app designer to pay, recruitment costs to cover, licenses and insurances to purchase and much more, it can all add up. As soon as you’re able to, start paying these debts back. Due to interest rates, being in debt is expensive- and so getting out of the red and into the black helps to stabilise your finances, and saves you money. Make paying your debts a priority as soon as you start earning money, it makes no sense to have money sat in the bank while your debts are generating more interest each month.
Buy your own office premises
Just like buying your own home rather than renting can help to give you security, the same is true of your office premises. When you rent, each month you’re paying a landlord a chunk of money which you’ll never get back. With a mortgage, you’re paying towards owning your own building. If you ever fall on hard times in the future, you have money tied up in your building that you could potentially sell if needed. Often, the mortgage payments aren’t much more than the rent you’ll pay (in some cases, they can be cheaper). However, you will need a deposit to put down. Once you’re out of debt, start saving towards this. It gives you much better financial security in your business. Plus, when you own the building you can make any changes you see fit, rather than be limited by the space that you’re renting. You can take down walls or put them up, change things like windows and exits and much more to make it fit your business.
Invest in your own vehicles
Whether it’s a fleet of ships to transport products overseas, or a group of company cars which your salespeople can use to get around the country to do their job, buying your own vehicles is a good option. That way, you’re not stuck paying expensive hire costs or having to pay additional money to outsource to a third party company. There are plenty of of ways you can ensure your ships are working to their best capacity, for example look into how telematics improve fleet performance. Having your own transportation will be a significant cost upfront, but can save you serious cash in the long run. These types of vehicles will last for many years, and so it’s a good investment into the future of your business.
Have business software custom designed
There are plenty of really great softwares for business out there on the market. You can find tools and programs to help you to run, and in some cases entirely automate whole areas of your business. However, it’s possible to go a step further, and actually have your own software custom designed. This way, it’s perfectly adapted for your business. Each area of your business will link up seamlessly, and it can improve productivity and workflow in a big way. When you buy standard business software, you’re somewhat limited by it and have to adapt your business around what it can do. With bespoke software, it adapts around your company. It can give you full control over all areas of the firm and allows you to get the information you need at a glance. Of course, something like this won’t come cheap, but it’s incredibly valuable and if it earns you more profits it will cover its own costs.
Set up your own manufacturing plant
If your company sells products, you’ll either be buying these from a manufacturer to resell, or outsourcing the work to a manufacturing plant. However, if you set up your own plant, you cut out the middleman. Admittedly, there are a lot of costs and issues to contend when when you’re setting up something like this, and it’s best done by companies that have plenty of money up front. You’ll have the cost of premises, equipment, tools and machinery. You’ll need all of the correct licenses and insurances, and you’ll need to find people who are right for the job. More qualified people for these kinds of roles will require higher wages. However, once all of the initial costs are covered, it’s far cheaper to manufacture yourself than use a third party company. In time, the plant will essentially pay for itself with the money you save, and it’s all profits from there. A huge undertaking in your business, but if you’re in it for the long haul and want to give yourself more security then it’s a direction you can go in. It also gives you more control of your business, since you’re not at the mercy of other companies when you need to hit deadlines or get things done.
Once your company is earning a profit and doing well, here are just a few of the things you can do to secure yourself financially and future proof your venture. These things will all cost money up front, but will save you money in the long run, giving yourself the best chances of success.