Now that things have turned around for the U.S. economy and small businesses, many owners are looking for ways to ensure their companies continue to grow and remain profitable. A recent study shows that business owners are ready to increase investments in their businesses in 2015. Here are four ways you can invest in your business to keep it healthy and profitable.
1. Increase Employee Compensation
As the economy improves and more businesses ramp up hiring, it makes sense to do all you can to keep your quality employees from looking elsewhere for a higher-paying job. In the survey mentioned above, 46 percent of the small businesses surveyed said they will begin to set aside funds to increase employee compensation. This type of investment makes sense if your employees possess skills, experience, or talents that would be difficult to replace. Many employees have gone a long time without raises due to the stalled economy — and now that business is picking up, consider choosing this type of investment if you want to retain your best people. Even if you can’t yet afford to give your employees raises, you can let them know they’re appreciated by offering them bonuses or financial incentives when they meet predetermined goals.
2. Plan for Capital Investments
According to the survey, small-business owners are beginning to look toward the future, and for 35 percent of those surveyed, that means investing in capital improvements. Have you put off buying the equipment your business needs because of economic uncertainty? If so, this might be the year to update old gear, purchase business property instead of continuing to lease, or invest in other assets that will increase your profitability. And thanks to the Section 179 tax deduction, you will be able to write off up to $25,000 on new or used equipment on this year’s taxes.
3. Improve Business Processes and Technology
The business world has turned a corner as far as how it operates and what customers expect. That is likely at least partly behind why more than half (57 percent) of business owners surveyed plan to invest in improving their business processes and technology. For instance, because of a change in Google’s latest algorithm, business websites that aren’t compatible with mobile devices have taken a hit in the search engine rankings. If you haven’t updated your site, consider investing in the improvement this year.
In addition, if you’re still doing your books and payroll by hand, investing in software could help streamline your systems. And according to the survey, only 25 percent of small businesses have a website with e-commerce functionality, despite the fact that more and more consumers are shopping online. If you’re one of the 75 percent of business owners who still don’t have the ability to sell your products or services online, now would be a great time to make the investment.
4. Save for Unexpected Emergencies
If you became seriously ill, your area was hit with a natural disaster, or the equipment you rely on to run your business broke down, would you have the funds to get through the crisis without having to close your business? Fifty-five percent of those surveyed are saving for unexpected emergencies as an investment in their business this year to ensure that if they face such a crisis they can keep operating.
The revived economy is great news for small-business owners, and the uptick in sales and profits makes it a perfect time to invest in your business.