Areas Where There’s No Such Thing As Over-Investment For Small Businesses

Today’s entrepreneur walks a fine, fine line. Starting out, and in those all-important early years, entrepreneurs have a single dictum drilled into their brains. That’s the ABC- Always be Cost cutting. Nascent businesses have to keep an eye on their overheads, eliminating surplus cost wherever it should arise. That said, prudent investment is also one of the surest paths to success in business. Any time a business is given the opportunity to improve its output, increase its volume or make its operations more efficient it can only ever be a boon that solidifies the viability of the business.

It can, however, be difficult to know where to put that money for maximum dividends.

Investment in small business

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Understanding fiscal multipliers

It’s important to understand how to spend effectively, and this can be facilitated with an understanding of  fiscal multipliers. A fiscal multiplier represents the return that business owners can expect to make on their investment. If you invest $1,000 in a new piece of equipment, that’s a substantial overhead, but if the equipment can generate $2,000 a year of profit, the fiscal multiplier for that item will be 100%. While not every investment can guarantee a 100% ROI, there are still areas in which businesses can expect to make substantial returns.

Digital marketing

It’s all very well having a great product and offering amazing services, it’s all a wasted effort if nobody knows who you are. Digital marketing is essential for success (and even survival) in the 21st century. Technically savvy entrepreneurs with a knack for social media may feel that they can do this all on their own, but it makes far more sense to invest in outsourcing your marketing to a specialist provider. After all, your attention is better spent on the daily operations of your business. Thrifty business owners may be reticent to part with their profits but since marketing costs yield an average return on investment ratio of 5:1 investment in content creation, Pay Per Click advertizing and outside marketing fees is rarely a bad idea.

Employee development

A business is bigger than its founder and as dynamic and talented as entrepreneurs tend to be, investing in the right people can take a business to the next level and ensure success. The right employees can allow businesses to grow and prosper bringing their skills, knowledge and expertise to grow your business in ways that you’d never be able to achieve alone.

Employees this talented, however, tend to have certain expectations. They want to be assisted in their professional development and and at the very least have the training to use their equipment and do their job well. Since you can’t guarantee that every applicant will be a Training Connection graduate, it makes sense that they not only have the skills and knowledge to do their job but to grow in their careers. If you don’t provide the development they crave, they’ll happily go to your competitors for it.

Capital investments

It’s understandable for business owners to be skittish about spending money on new equipment, tech and even premises when they’ve made substantial capital investments in getting started. They should, however, still invest wherever they have the opportunity to increase productivity.


Lynne Huysamen

Mommy to a pigeon pair, blogger and online marketer. Lover of chocolate, good books and buckets of coffee.

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