Friday Focus: Investing As a Business Owner

Most entrepreneurs are on the hunt to seek investment, add capital to fuel their endeavor. Nothing wrong with that, cash is king, and no business can operate and grow without some form of investment sourced internally or externally. However, there is also a requirement to invest as a business owner.

Many new entrepreneurs overlook spending on their businesses as an investment, whether spending on marketing, production, logistics, distribution even hiring all are investments and every expense should be looked at the same way as investors, either corporate or private, scrutinize a company before adding capital for equity.

Among the many factors an investor may investigate before parting ways with cash is the all important return, commonly referred to as ROI (Return on Investment). Similarly, a business owner should do the same when adding new services. Analyze, compare alternatives, research and trial new features or products ensuring they will garner acceptable ROI before using those all-important cash reserves.

It is a common pitfall for newer entrepreneurs, to invest heavily in something they assume will generate growth and sales for their business, when a lack of due diligence can cause a loss of capital and an unfortunate uphill climb, which, in some instances can be insurmountable.

The key is to stay vigilant, pragmatic, and measured when investing your cash in services, products and people while growing your business. A little extra time and research goes a long way.  

For personalized guidance for your business on this topic and others contact us.

- Vincent Calace

Founder & CEO Venture Business Development