What should you do with the first-ever profits from your small busines

By Henry Brown

The moment your small business begins to turn a profit, you will realize it was all worth it.

All the sleepless nights, all the relentless scheduling, the worrying and the financial arrangements–they’ve all come to fruition, and you’re now looking at your profits with a glint of pride in your eye. You, unlike so many others, have gotten to the point that shows what was possible, and taken your business idea and made it a viable reality.

You are now faced with another decision: what are you actually going to do with your profits? So many business owners focus on generating a profit that they don’t think about what happens next. Below are four options you may want to consider.

#1 – Award them to yourself

There is nothing wrong with taking the profits as a dividend and spending them as you would any windfall. You have done the work, made your business dream a reality; why shouldn’t you enjoy the spoils? Many business guides would caution you against this step, as it is not the most financially prudent one, but there’s also a need to be realistic. You’ve worked for those profits, and if you want to take a two-week vacation in the Caribbean with them, then that seems completely reasonable.

#2 – External investment

This option still involves taking the profits for yourself, but rather than spending and enjoying the cash, you can invest them for your future. There are hundreds of different investment opportunities you might want to explore, from exchange-traded funds (ETFs) to property investment–so you might want to spend a little time exploring your options. When you’ve made your decision, speak to a real estate agent or find the best brokers for ETFs and proceed from there.

#3 – Internal investment

One of the most common ways of using the profits from your business is to reinvest the profits into the business. You could use the profits to increase your product line, improve your work environment, expand into new areas–essentially, any kind of business growth that requires some capital behind it is a sensible way of using profits. If you choose to internally invest, then there’s every chance the new measures you take will be able to generate even more in terms of profits in future.

#4 – Donation

Finally, you can choose to donate your profits to a worthy cause of your choice–either partially or in full. Many business owners choose to do this for tax reasons as well as outright altruism, so if there’s a cause that speaks to you, then this is an option well worth considering. However, it is important to ensure you don’t donate more than you can realistically afford; when money is donated you’ll never see it again, so only donate away what you truly can afford to give.

In conclusion

The four options above offer a range of different benefits, so you should be able to find a choice that aligns with your preferences. Make your decision about the profits you have enjoyed this year, then turn your focus to ensuring your next business profits are even larger still.


Henry Brown is an online marketing executive. When he isn’t talking shop he’s roaming the streets of London, uncovering the extra-ordinary in the ordinary.

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