Here’s a run-down of the best investment opportunities for your business in 2020, from the time-tried to the hottest tips for the new decade.
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The time has come. Your business has moved past its initial stages and is now generating consistent profits. Congratulations!
But where do you go from here?
It is a well-known fact that in order to grow, businesses must reinvest some of their profits. Structural investments can increase efficiency and help boost profits further, while financial investments generating high returns can bolster a business’s capital. In any case, investing now won’t just see your business prosper. It can also potentially help tide your business over in times of low profits in the future.
Now, here comes the eternal question: What should you invest in?
The answer varies depending on a variety of factors, starting with your business situation and your risk-friendliness, but ranging as far as the global stock market situation.
Here’s a run-down of the best investment opportunities for your business in 2020, from the time-tried to the hottest tips for the new decade.
1. Invest in Yourself
Benjamin Franklin once said, “For the best return on your money, pour your purse into your head.”
He was right.
Now is the time to spend money on increasing your own skills and those of your staff. Today’s business world is fast-paced, and acquiring new knowledge is essential for future success. Having versatile skills at your disposal expands the scope of your business, making it more resilient to any fluctuations in demand you may face in the future.
Submersion and crash course training, or attending conferences and seminars are all excellent opportunities to hear from other successful people in your industry. Such interactions are a crucial element in becoming familiar with new trends in your field, shaping the future of your business.
2. Promote Your Business and Extend Your Network
Your business is making stable profits in your circle of clients. Great! That means the services and products you offer are in demand. Now it’s time to invest in getting the word out there and increasing your audience and reach.
There are two essential components to invest in to achieve this purpose: promoting your business and extending your network by building business relationships.
As far as promoting your business goes, it is the time to move beyond merely owning a website. Investing in online marketing—your content strategy, social media marketing, SEO, and analytics—can increase your reach and open up new markets.
As for the networking side of things, no business can prosper without the right connections. Now that you have a solid business foundation, going to networking events, conferences, or trade shows is crucial to building a network in your industry. Later on, knowing the right people can help you stay up-to-date with the latest industry developments and land more favorable deals.
3. Invest in Hiring Help and Delegating Tasks
Depending on the size of your business, you might be involved in almost every process, ranging from development to administration. Now that you can boast substantial profits, you can afford to focus on what you do best. Then you can hand the rest of the tasks off to someone else to deal with.
This can mean hiring staff for administration, customer service, or accounting.
Delegating tasks to people who can focus solely on them increases your business efficiency and frees up your time. As a consequence, you can invest all your energies in excelling in the business processes you know best.
Furthermore, even if you already have a team of proficient employees, you might want to consider investing in outsourcing some tasks. For example, hiring an accountant specialized in your industry, could not only mean the end of your tax headaches but may also provide valuable outside perspectives and insights into industrial processes.
4. Invest In Financial Products
Putting money in the stock market has been a go-to investment to increase business capital for years. And often rightly so. According to the S&P 500 Index, the market was up an incredible 29% in 2019. And while growth might be slowing in some industries, it shows no definite signs of stopping overall.
However, before you begin thinking about financial investments, it is vital to establish investment literacy. Any investment goes hand in hand with risk. So, learning how to invest is ultimately the very first thing you should spend your time and money on.
Choosing the right kind of investment for you will depend on four key factors:
- how much flexibility you require
- your personal objectives
- how much risk you’re willing to take
- how much time you are ready to spend on monitoring your investments
Generally, stocks are considered the riskiest and least flexible investments. You will also have to spend a considerable amount of time researching to find the best value investment.
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More secure and flexible options come in the form of mutual funds, especially money market funds. Alternatively, you might consider Forex trading. These often allow for fast-paced decisions, and the time you have to invest in researching your options is generally lower as well.
On the other hand, Erik H. Gordon, an entrepreneur, believes mutual funds are one of the best options for somebody who is just beginning to invest in financial products.
If what you’re looking for is a stable investment with a minimal amount of involvement—you are busy after all and might not have time to follow the stock market’s every twist and turn—index funds could be a good option for you.
But what are the best markets in which to invest in 2020?
According to Forbes, the healthcare industry will be a stable option this year. Also, if you’re not averse to a calculated amount of risk, investing in the energy market might be for you. This is because, even though oil and gas stocks have dragged in past years, the currently particularly volatile geopolitical situation in the Middle East could change that—and fast.
Alternatively, investing in clean energy funds is seen to have growth potential. Finally, real estate investment trusts (REITs) are an option that promises a steady dividend yield while maintaining low volatility.
In any case, before diving into financial investments, you should consider how to diversify them best, maximizing your investment security. Finding a financial adviser may also be an essential building block in the foundation of building your business’s capital.
The Bottom Line
At the end of the day, supplementing your business profits with a well-founded re-investment strategy will pay off in the long run.
Ultimately, it is up to you whether you choose to reinvest profits back into your business—increasing your skills, promoting your business, delegating tasks or extending your network—or to pursue a tailored financial investment strategy.
In the end, you are certainly the person who knows your business best. You are the one, after all, who has laid the groundwork for its success. Now it is in your hands to find the best investment strategy to ensure your long-term business success.