Investing your company’s funds wisely
Once a company gets through the startup phase and begins to post successive quarterly profits, it’s time to fine tune the financial planning process. Central to that chore is making wise decisions about investments, namely how the business intends to use its limited capital in the most effective, efficient way possible. One of the best techniques for finding out what’s needed is to ask yourself a series of questions about four key areas of potential improvement.
Some owners think it’s enough to make money, but they soon realize that’s just half the battle. The other half is investing it in such a way that you are able to keep everything you earn and, if you’re lucky, bring in a bit of interest along the way. Here are four topics to explore if you want your organization to use its capital as efficiently as possible.
People
Do you already have the team you need? If so, what happens if growth continues and more expertise is needed quickly? Is there a plan in place to hire new talent, to acquire fresh personnel on a regular basis, and train them in time to meet future needs? It’s imperative to do people planning in the same way you do financial planning, and to take the job just as seriously. There’s no worse feeling than having to turn down business from a new client solely because you don’t have enough team members to get the job done.
Fleet management
Is your fleet the right size, and does it have the most modern safety and communications equipment? Even a small fleet, when it has highly trained drivers and a cutting-edge FTS (fleet telematics system), can work at peak efficiency around the clock. Proper, rapid, and accurate communication is at the very core of the modern transport industry. If the central authority and fleet drivers can’t seamlessly communicate with one another, all is lost. The best way to streamline the work of any fleet is to learn about the latest systems by reviewing a guide on vehicle telematics and then equipping your team with whatever they need.
Interest bearing accounts
What is your company’s policy about parking idle cash? Does it go into a checking or no-interest account overnight? How much cash, on average, sits in such accounts on a regular basis? This is essentially an accountant’s job, but if the organization’s financial leaders routinely bypass the chance to earn interest on deposits, then you’re missing the boat. Make a written policy about what to do with idle funds, aiming to earn even a small amount of interest on all sums that sit for more than 24 hours.
Marketing
Owners and managers often view marketing and promotion budgets as money pits or financial black holes. In fact, what you’re willing to invest in this direction is what keeps your brand and corporate image alive. No matter how wonderful your products or services, you won’t earn a dime if no one knows the details about the company’s offerings. Review marketing budgets annually, with an eye toward increasing them by a fixed percent each year.
