After years of sluggish returns in the wake of the 2008 recession, revenues for small business owners are expected to make a huge comeback this year.
According to a Wasp Barcode Technologies poll, 57 percent of small businesses anticipate an increase in profits over last year's figures. Better still, 29 percent of that cross section are planning a financial bump greater than 5 percent. We're not only back in the black, but we've got a little extra cause to celebrate.
So while small business owners enjoy their newly replenished coffers, they should be sure to take time to consider how exactly they should spend their earnings. They should take advantage of this prosperity as soon as possible to ensure their companies continue expanding and ramping up value.
Start with the obvious
Small business owners know their operations better than anyone else. With these tidy sums burning holes in their pockets, these entrepreneurs shouldn't overthink budgetary decisions. Take famous billionaire Warren Buffett, for example. According to Entrepreneur, he started his career in high school, managing a single pinball machine sitting in the back of a barbershop. Once he turned a profit, guess what he spent his money on? More pinball machines in other locations.
If any pressing matters seem too good to be true, small business owners shouldn't overlook them. Instead, they should trust their instincts and swing for the fences.
"Overspending on IT does not necessarily translate to absolute prosperity."
Even out information technology
Innovation helps small businesses compete and thrive, which is why IT has become such an integral part to the foundation of a successful operation. However, knowing just how much budget to devote to this department can be tricky. Overspending does not necessarily translate to absolute prosperity. How much is too much? How much is not enough?
Technology experts at Geeks on Wheels estimate small businesses generating less than $50 million in profit allot roughly 7 percent of their annual revenue for IT on average. If small business owners are unsure how their IT spend stacks up against others within their industry, they should do as much research as possible before deciding whether to invest more or possibly less.
Bring marketing into the 21st century
While a business may already have all the essential equipment necessary to succeed in its general operations, peripheral items might help accelerate other aspects in dire need of a boost. For instance, although video marketing only makes up a small portion of advertising space now, its presence grows by 43.5 percent annually according to a Pew Research Center study.
Business owners should include other departments and employees into the conversation of how to spend this extra money. Everyone will have wild and creative ideas, but some of them – like better camera equipment – might even serve more practical purposes.
Equipment and business industry piece brought to you by Marlin Equipment Finance, a nationwide provider of commercial lending solutions for small and mid-size businesses. Marlin's equipment financing and loan products are offered directly to businesses, and through third party vendor programs, which include manufacturers, distributors, independent dealers and brokers in the security, food services, healthcare, information technology, office technology and telecommunications sectors.