How to spend excess business profits?

[Purply]

What do most businesses do with their profits that will benefit them the most in the long run?

We are currently thinking about buying the "factory units" we occupy as a long term investment, but not sure if that is the best route to go.

Perhaps some other business owners on mybb can make some recommendations that are in the same position?

 

[Rustie]

The answer to your first question would be to invest back into the business. (stating the obvious!)
What that "investment" could be, will range from a legio of possibilities depending on your type of business.
It could be as simple as buying more high turnover stock items based on demand history. It could be improving supply chain.
You will need to identify where in your business you have the best opportunity to save, improve or expand.

We bought a machine that allows us to do manufacturing ourselves, instead of relying on a 3rd party to do it for us.
In the next 5 years we are sweating bullets to pay the thing off, but just the time saved from transporting stock between us and a 3rd party is already saving us money, never-mind the actual 3rd party costs.
What we didn't factor in that came as a windfall, was insurance costs. Because our product is not on the road anymore during production stages, we were able to negotiate a 40% insurance saving.

 

[Enzo Matrix]

Reward the ones that got you this excess profits i would say, and yes also re-invest into the business

 

[Purply]

Pretty much did everything mentioned above already. Have excess machinery for expansion which we bought beginning of this year in cash. Streamlined our suppliers in order to get the best available product at the best prices.

We keep stock/material for a minimum of 6 months and replenish twice yearly as buying in bulk gives better savings.

Since we in manufacturing we pretty much make everything we need and resell it as profit of course.

Our staff gets more than double the salaries compared to our competitors since we believe in building the company as a team.

That being said, we are an EME with two extremely hands on owners and two team members. Everyone willing to work and do what is needed to ensure our clients remain happy.

Been going at this for 7 years and we just keep on growing, gaining clients on a daily basis.

 

[AlmightyBender]

Always an option:

 

[Enzo Matrix]

Crypto!

FTW

 

[cenredash]

I guess hookers and blow is out of the question?

 

[CamiKaze]

What does this business of yours do?

 

[Purply]

What does this business of yours do?

We provide engraving services to the printing, leather and cork industries to name a few, mostly used for hot foiling/embossing onto their packaging/products.

 

[Rustie]

Pretty much did everything mentioned above already.

If your own business model have reached some kind of ceiling, you might need to think of moving horisontally.
This could be identifying ancillary product or service in an adjacent market or industry.
If your available resources creates capacity to speculate in those areas you might find a gap in the market you are already geared for, but was not aware of.

Also, you might also look at competition in your own or adjacent market to see if you cannot leverage your spare capacity to steal some market.

 

[ArtyLoop]

Excess cash and he comes to MyBB to ask what must he do with it... FAIL!

 

[Purply]

If your own business model have reached some kind of ceiling, you might need to think of moving horisontally.
This could be identifying ancillary product or service in an adjacent market or industry.
If your available resources creates capacity to speculate in those areas you might find a gap in the market you are already geared for, but was not aware of.

Also, you might also look at competition in your own or adjacent market to see if you cannot leverage your spare capacity to steal some market.

Most definitely, we always have our eyes peeled and ears to the ground looking for new avenues we can move into, without it affecting our current level of service which is our main focus at all times as that is ultimately the reason we get repeat business.

For now our excess machinery is being used during peak times to alleviate stress, but they mostly stand idle otherwise. It serves more of a "backup" in case of breakdowns on our main production line which can take anything from 2 - 5 days to get fixed since parts need to be flown in from overseas and technicians need to be book etc etc.

 

[Purply]

Excess cash and he comes to MyBB to ask what must he do with it... FAIL!

You Sir need a reality check, here, have a cookie.

Online forums are an extremely valuable resource of actual people with real life experiences.

By now you probably want another cookie, so have at it.

 

[Enzo Matrix]

You Sir need a reality check, here, have a cookie.

Online forums are an extremely valuable resource of actual people with real life experiences.

By now you probably want another cookie, so have at it.

pwned

 

[ArtyLoop]

You Sir need a reality check, here, have a cookie.

Online forums are an extremely valuable resource of actual people with real life experiences.

By now you probably want another cookie, so have at it.

Why not do what most people in your position do? Buy a new BMW or a new toy to play with.. I believe you can get a nice drone, or something

 

[Rustie]

One of the other options are great, especially for tax purposes in some ways.
Buy a vacation home that is owned by the business.
Make it available to staff.
It generates tax deductible expenses that, if managed properly, will help with tax avoidance.

 

[ArtyLoop]

pwned

Hardly..
Forums might be a valuable resource, but this one ain't one of those.

 

[Purply]

Why not do what most people in your position do? Buy a new BMW or a new toy to play with.. I believe you can get a nice drone, or something

I apologise for my previous comment and value your continued participation.

 

[Purply]

One of the other options are great, especially for tax purposes in some ways.
Buy a vacation home that is owned by the business.
Make it available to staff.
It generates tax deductible expenses that, if managed properly, will help with tax avoidance.

Thank you for this, will be worth thinking about it in future, especially as you mention the staff can also benefit from it if they so choose.

 

[Rustie]

I apologise for my previous comment and value your continued participation.

#offtopic -hearmeout
I have this system where I immediately ignore members that submit posts that derail, detract, subvert or just don't add any value.
I have followed this for the last year at least.
There are a very specific "profile" these members fit in.
- close to or over 10k post counts
- belongs to certain "groups" on myBB
- regularly post single line nonsensical comments
- post prolifically in certain threads
- have a certain "fellowship" that always responds to their one line contribution
- is supported by others in this group in some way very close to animal pack mentality, especially if something starts going adversarial

Reading threads like yours for instance, now weeds out all these comments.
The beauty of this system is that every now and again, somebody will "quote" these blocked members and then you get to read what they contributed. For the most part they just confirm why that block exist.

#ontopic
I hope you find a way to use the extra resources your business have in a productive manner.
It is definitely a great position to be in in today's business climate.