Business Banking: How to Invest Wisely
Doing this is easier said than done with businesses always on the lookout to expand the company along with the materials and equipment available to them in order to offer more to their clients, and doing that while tightening the purse strings is a difficult compromise. So how do you invest on behalf of your company without getting a phone call from an angry bank manager or accountant?
The first place is to start with a clear plan for the short and long term in terms of what you want to achieve, want you want to spend and where you want to get to. This might sound like business management 101, but believe it or not there are companies out there who bring a few clients in on big contracts and they then abandon their financial plans. Their minds start to drift and they think about office moves, new hires and investing in new equipment without thinking about the cost in terms of both money and time.
If you can formulate your plans and stick to them, anything else is a bonus! It's a bit like making a family budget for the month ahead. You know what you have to spend, you know what's coming in and you know how much disposable income you have to spend on days out, food shops and so on. In a business sense, if you know how much you're likely to make at the end of each month - and then you exceed that, then you're going in the right direction.
Making a business investment is a good way of putting the bank manager on edge. Sometimes it's essential. You might have so many employees now that there just isn't space in the current office and you have to look for an alternative location. In other cases it could just be that you've seen the pound signs and thought you'll buy all new computers for the whole team, even though there is nothing wrong with the existing models - they just aren't as shiny and new!
One of the best ways to show that you are worth the investment and that it's a good idea is through a guarantor loan. This kind of backing is supported by a friend, family member or colleague showing that you can be trusted to make the repayment and that someone believes in what you are trying to achieve to such an extent that they are willing to put their name on the agreement.
A final suggestion in how to invest wisely on behalf of your business is to really consider whether new staff are required or not, and how often you might need them. Paying out for a full salary might be worthwhile sometimes when you know you have both the income to afford it and the workload to support it, but in other cases where it's a short-term contract with a client for example, it may be worth bringing in either freelance help or part-time staff which will cost the company less in the long term.
