With 2013's Q3 coming to a close, company owners in every industry throughout the nation will want to finish the year strong. If sales and profits are booming, discussions of expansion or hiring more employees for 2014 may arise. Using a strong year to start or continue growth in the following year is a common strategy for small and medium-sized businesses. As the year comes to an end, it's time for business owners and executives to strongly consider methods of investing in their companies. This article provides tips on how business owners can invest in their companies to end the year on a solid note.
One investment option for your business is to hire additional employees across departments. In a recent survey of over 150,000 small business owners and their outlook on the remainder of 2013, 20% want to bring on more employees. Restaurant owners can hire more chefs, waiters, and hosts. If your company is heavily sales-focused, adding staff to your sales channels can help to drive profits. Also keep in mind that it would be wise to hire across multiple channels in your company instead of just one. Expanding evenly across various departments will likely help your operations transition smoothly as a whole. If there is a market for your company's products or services, increasing your workforce is a way of capitalizing on that opportunity.
When hiring additional employees, there comes a need for more office space. Another form of investment for your business is to expand, whether acquiring an additional store, office, or branch. 39% of small business owners have seen increased revenues in 2013, and 34% have considered expanding their companies. Doing this should be a calculated move that significantly contributes to increased revenues, and there are many factors to consider such as location, real estate or rent costs, local competition, and demographics. The entire process, starting with just the decision to expand to finally opening your doors, can take months. Before preparing the paperwork, you should already have an estimate of the overall financial impact, type of fixed and variable costs, and the appropriate number of personnel per location.
Business owners can strategically invest more wisely by regularly monitoring where revenues streams are strong and weak. Not all products will sell equally well. For example: Product A is selling well and Product B's sales are doing poorly. In this case, it may be advantageous for your business to reduce the supply of Product B and invest in strategies to capitalize on selling Product A. Investment strategies may include increasing staff for successful channels or divisions, increasing the supply of successful products, or marketing more heavily to certain audiences, to name a few. Business owners should consider reducing production or products that may not be performing well.
Many company owners also consider an equipment leasing program in order to take advantage of the Section 179 Tax Deduction for the remainder of 2013. The Internal Revenue Service (IRS) has made changes over the years, which have resulted in both higher and lower deduction limits. Leasing allows businesses to invest in equipment for a specified term for an affordable monthly payment. The 2013 Section 179 Tax Deduction limit is $500,000. Within the last few years, the deduction limit has dropped to as low as $139,000. Section 179 is expected to significantly decrease on January 1, 2014, which means business owners should to act on any equipment financing decisions soon. 54% of surveyed small business owners know this, and plan to take advantage of the Section 179 Deduction before the year is over. For more detailed information, consult your corporate tax professional.
These are just several of the many ways to invest in your business in order to end the year strong.
Bio: This article was written exclusively for Business.com by Balboa Capital, a leading provider of small business loans and equipment financing programs. Statistics and figures in this article were sourced in 2013 by Balboa Capital from online surveys of over 150,000 small business owners in the United States. (Image: via freedigitalphotos.net)