7 Smart Ways to Reinvest Your Small Business’ Tax Refund
If you’re a small business owner who will see a couple thousand dollars back after tax day, you’ll most likely be ecstatic from this great news. It’s easy to think about splurging that bonus, but it’s important to remember to make the most out of that cash.
You should find time to do some proper business and cash flow planning. You might find that reinvesting your recent return will be more beneficial than simply spending the cash. If that’s the case, we’ve got 7 smart ways you can reinvest that your refund.
1) Pay Off Debt
So many owners take out a small business loan or home equity line to help fund their venture. You may have even dug deeper into your business credit card. That’s okay.
With your recent influx of cash, it’s a perfect time to reevaluate what you owe and consider paying down your business debts. The short term income hit will be beneficial for your company’s long-term available cash flow.
2) Purchase Tech
Time and money remain among the two most limited resources available to small business owners. With that in mind, your recent return may present you the opportunity to better streamline processes.
A new accounting, sales, or marketing platform can automate a lot of the tiresome tasks eating away at your time. Even the systems you bought just last year may be in need of an upgrade, so keep that in mind when setting aside money in the future for tech.
3) Save It
Sometimes not investing immediately is the right move. If there’s nothing you absolutely need right now, feel free to put that money away so it’s available for the proverbial “rainy day.”
Try to maintain a goal when saving. If you plan on using the savings in the near future then consider placing your return in a short-term CD. And remember that you may have to pay a little more in taxes in 2019.
4) Pay It Forward
Why not empower your employees further by investing in training programs? Employees that receive training consistently outperform those that do not. Plus, it’s a great way to make your staff feel more valuable, leading to increased morale and resulting in a happier workforce.
Be sure to be up front and transparent in your training programs. It will also help recruit top talent in your industry and area for those new positions that open up in your company.
5) New Equipment
Some businesses constantly require updated machinery to keep up productivity and sales. But you can purchase more than just vehicles and heavy equipment.
Everyday tools in the office, when updated, can really increase the efficiency of your employees. Consider purchasing new copiers, printers, desk, or computers. You may not see dividends immediately, but you’ll notice the difference in time management before long.
If you’re not ready to hire permanent, full-time employees, outsourcing can be the perfect alternative. Assess which tasks in your business could benefit from outsourcing, and look for independent contractors or freelancers to tackle them.
7) Take Care of Yourself
You are the foundation of your business, so taking care of yourself is important. However if you’re like most entrepreneurs, you don’t have a lot of spare time for self-care.
Solve the problem by spending your refund on a personal trainer to come to your home a few days a week, a meal delivery plan, a gym membership, or other service that saves you time and boosts your energy levels. Or take a vacation to fit in some much needed rest and relaxation.
To be completely sure how to spend your tax return most efficiently, we highly recommend reviewing your options with an accountant or financial adviser.