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In the past two years, businesses around the world have faced immense and unpredicted difficulties, with many having no choice but to shut their doors.

But there have also been those that were able to withstand the challenges brought on by the pandemic and to stay afloat. How is this possible? One way is through investment.

Investments ideally allow for future growth opportunities within a business, but they can also be a “financial cushion” for unforeseen circumstances. Often small business owners don’t plan ahead for unforeseen circumstances, which costs the business more and places additional pressure on cashflow.

5 things to consider when investing

  1. Having your own “kitty fund” is the cheapest form of funding for business growth and creates a platform for future sustainability.
  2. Investment products on the market range from short- to long-term, providing flexibility around the term of the investment.
  3. Call and Notice Deposit products allow for flexibility of monthly contributions that vary depending on the amount of free cashflow.
  4. Consider your monthly cashflow (working capital and operational expenditure) before deciding on the type of investment product that’s right for your business.
  5. Re-assess your financial position and growth, and growth against your business plan, and think about whether it will be better for you to reinvest your profits into future business growth that could yield a higher return or to invest for a rainy day.

All businesses, regardless of the segment in which you operate or the size of your operation, should invest part of your profits into investment products outside of re-investing into the business.

 

About the Author

Natisha Lazarus
Head of Business Banking, Business Banking