Businessing Magazine Logo Businessing Magazine Logo

You Are Finally Making a Profit, Now What Should You Do With It?

You Are Finally Making a Profit, Now What Should You Do With It?

When you start a business, your goal is to begin turning a profit as soon as possible, and then to grow that profit as much as you can. That’s a fundamental element of capitalism.

But there is a story about a dog who chased cars every day until one of them crashed in a ditch. The dog ran to the car but didn’t really know what to do; he had always focused on chasing the car, but didn’t know what he would do once he caught it.

Profit is the same way for some people. They focus all their energy and efforts on achieving it, but they don’t necessarily know what to do with it once they get it.

Don’t let that happen to you. Once you are creating profits, find a way to put those profits to work for you. Below are three avenues, suggestions, and principles that should guide your money towards working for you. Spending it on incremental things or letting it sit in a savings account will not help you in the long run, so read closely!

Crowdfunding In Real Estate

Don’t let the word fool you. A crowd of people is a disorganized mess, but a crowd of accredited investors is anything but disorganized and anything but a mess. Many investors are finding that crowdfunding real estate is a great option, because it does a couple of things that many other investments cannot do.

First, it’s like a mentoring relationship. Many crowdfunding investors see themselves in the nascent entrepreneurs that they are helping, and they get great satisfaction from helping someone else get started. Paying it forward is a great motivation.

Second, it’s not complicated. You don’t have to commit piles of money or hours of research. Crowdfunding firms have researched their clients and know the projects will be successful, and they also make sure that other investors are legitimate and can hold up their end of the bargain. These firms eliminate the risk from both sides and bring together the thunder and the lightning.

Third, its not open to everyone. Unlike a website like Kickstarter who made the term “crowdfunding” famous by collecting a buck from everyone with a username, crowdfunded real estate is completely different. Sure it is a group or crowd of people, but this group is made of savvy investors with smart financial minds. The power of many is especially true when that group is made up of professionals.

Diversifying Your Holdings

Of course, one of the most obvious things you can do with your profit is use it to start another business. Serial entrepreneurs love to start a business, build it into a moneymaker, and then sell it. They then take their earnings and move along to the next idea.

This is much like people who repeatedly sell homes. Their profit on the starter home helped them get a bigger second home, and its sale put them further ahead with the third home, and on and on.

The key word here is diversifying. It’s great to be successful in one part of the market, but if a downturn comes along, that segment may struggle. During the good times, you should be taking your profits and investing them in a completely different part of the economy to make sure that you can weather economic storms. So sometimes the best thing to do with your profits is to use them to insure their own continuation.

Invest In Valuable Items

Forget gold bars here. This is more in the direction of fine art. You can simultaneously spruce up your business and secure your money with investments in paintings, statues, or other creations that are sure to hold value.

Of course, that last part is the important one. Don’t just go buy something expensive and put it on a pedestal at the front desk. Work with art dealers and appraisers to make sure that the object will hold value. Then insure it, of course.

This can pay a lot of dividends for you. It increases the prestige of your company and gives you a reputation as a person of taste and culture, which can do a lot of good in bringing in new customers or clients. And it keeps your money occupied indefinitely, yet remains liquid enough to retrieve with very little notice.

Profit for profit’s sake isn’t satisfying for many people. They want a way to put that money to work, because they have worked so hard to earn it. With these unique options, you can turn the black ink on your bottom line into more great things in your business and in your life, and still add some class to your business or some satisfaction to your heart.

short url:

by Rebecca Jones // Contributor to Businessing Magazine.

Opinions expressed by contributors are their own.