Growing your business and making more sales is one way to grow the wealth of your business, but it’s only one component. To truly build the wealth of your business, you should be thinking about more than just your bank account. Wealth management for small businesses applies similar principles to personal wealth management. To grow the wealth of your business for a revenue stream that is truly sustainable, incorporate the following tips into your business plan.
Capitalize on your intellectual property
If your business is truly innovating, think about selling your skills. Allow others to use your copyrighted materials for a small fee. This puts into place an additional source of revenue that doesn’t require any monetary investment. Steve Pavlina, a personal development blogger, puts it this way. “[Creating] a piece of intellectual property may involve a good deal of work, but that work need only be done once… After that, the property can be duplicated and shared with many people. You could potentially be generating earnings 50 years from now for a piece of intellectual property you create today.”
Any financial planner will tout the benefits of investing. It allows your money to grow and pay dividends in a manner that can’t be achieved through savings alone. The Bank of Montreal outlined the dos and don’ts of investing in a blog post called, “Investing for Small Business”. The bank advises, “Longer-term investments are more suitable for business goals that are further down the road, such as business expansion. Plus, they generally offer greater returns potential.”
Find a professional
Financial planning is part of any business plan, but many entrepreneurs fail to meet with professionals. In an Investopedia blog post titled, “Do Small Business Owners Need Financial Advisors?”, author Dan Moskowitz states, “Even if a small business owner has made necessary plans for the future, it would be difficult for that small business owner to invest strategically for the near future when he or she has to deal with personnel decisions, capital allocation, how to grow sales, how to cut costs and constantly putting out fires.”
Enact a partnership
Partnerships are a risk since you have to rely on the actions of others, but they can be beneficial for generating additional revenue and growing your company’s wealth. One such partnership involves cooperative sales. If it makes sense for your company to partner with a related business, it is worth investigating as a revenue stream. Just be sure to partner with a company whose reputation is on par with yours.
One way that wealthy people stay wealthy is that they don’t spend money that isn’t necessary. Every year, your company should audit its spending and find ways in which costs may be reduced. It’s not necessary to be cheap, but there may be areas in which your company is spending more than it should be. Keeping these small financial leaks in check will help you grow your wealth.
This article was written by Alaina Brandenburger for Small Business Pulse