Can a Small Business Invest in Stocks?
There are few things that require more investment than owning your own small business. As a small-business owner, you should always be looking for ways you can increase your company’s value and give yourself the ability to expand. While most of us know a little about personal investing and own a stock or two, you should also be aware of what investment options are available for your small business. You may be surprised by the assets your business is permitted to add to its portfolio. If you own a small business, read on if you want to know whether or not your business can invest in stocks.
Can a small business invest in stocks?
In the United States and Canada, it is legal for businesses to invest in stocks, bonds, mutual funds, and rental properties. This gives business owners a lot of options when it comes to crafting investment strategies. A financial plan that allows you to use your investment portfolio to improve liquidity could be what enables you to expand your business even further. There are a lot of opportunities out there for small businesses that are ready to build up their investment portfolio.
As an individual, you can consider taking on investments that are less conservative than those usually recommended to businesses. One option for anyone interested in trading speculative assets is to start by investing in penny stocks. Many traders get their start with penny stocks, which offer the potential for significant intraday movement. The savviest traders learn how to capitalize on that intraday movement. A quick search for the best penny stocks to buy now can give you some solid options to research before you make your first purchase.
It’s important to remember that investing comes with inherent risk. If you’re in charge of making stock purchases and other investments for your small business, it’s a good idea to connect with a qualified financial advisor. The decisions you make about how to grow your small business investment portfolio will have a significant impact on your ability to achieve and sustain profitability. Think it through and make a plan for what happens if your investments begin to lose money. No one wants to imagine the possibility, but it’s always best to be prepared.
What else can you do to grow your small business?
Marketing is often a good area for small businesses to dedicate resources. Smaller businesses are unlikely to have their own marketing team, which is why owners should consider investing in a fractional CMO. A fractional CMO provides you with access to a high-level marketing professional to help guide your overall strategy, without the expense of hiring a full-time CMO or building an internal marketing department.
A fractional CMO can work under your direction and with your staff to overhaul your promotional strategy and develop a strategic marketing plan that will help your small business increase its growth and market share. There are a lot of resources multinational corporations have available internally that small businesses simply can’t afford; that’s why looking for creative solutions like a part-time CMO is essential.
Small businesses have the ability to make many of the same investments as individuals, but the strategies that work for individuals are often not well suited for business investing. You can and should keep a diverse personal portfolio, but keep your business invested in more conservative assets. Small businesses can also minimize expenses through the use of a fractional CMO or by outsourcing some accounting and financial tasks. Having the liquidity and cash flow to support your business’s growth and development is essential, but so is putting those resources to effective use to improve your profitability.