Originally published at: Maximising your business’ potential: a guide to investing for your business – InvestEngine Insights
In the dynamic, competitive landscape of business, optimising your financial strategy is crucial for sustainable growth. Many businesses tend to accumulate excess cash, often failing to explore investment opportunities this presents.
This article will explore the benefits of investing surplus funds and introduce InvestEngine as a potentially game-changing tool for businesses looking to make their money work harder.
Open an InvestEngine Business Account before the end of 2023 and you could win a £1,000 boost to your business’ investments. Get started today.
The cash conundrum
Businesses frequently find themselves in possession of surplus cash, whether it be from profits, retained earnings, or temporary liquidity. While having a financial cushion is essential for navigating uncertainties, allowing excess cash to linger can be counterproductive.
It’s worth noting that accumulating excess capital in your company, while potentially missing an opportunity, can also cause problems at a later stage with regard to succession planning or passing the company on..
Ways to invest using the cash surplus
There are a variety of ways to invest and use surplus cash from your business, including:
- Reinvestment back into the business to fund future growth
- Tax-efficient restructuring
- Investment in research and development
- Director’s loan
- Dividend payments
- Pension contributions
- Invest in the stock market
- Gift to charity
Why investing excess cash makes sense
Investing surplus cash can offer numerous advantages, turning dormant money into a powerful asset for your business. Here’s why:
- Investing provides an opportunity for capital appreciation, potentially yielding higher returns than traditional savings.
- Inflation erodes the purchasing power of cash over time. Investments have the potential to outpace inflation, preserving the real value of your funds.
- Spreading investments across a variety of assets mitigates risk. Diversification helps shield your business from the impact of poor performance in any single investment.
- While cash in hand provides liquidity, investments can often be liquidated when needed, offering flexibility and access to funds.
Unlocking your investment potential with InvestEngine
InvestEngine simplifies the investment process for businesses, offering a user-friendly platform to manage investments efficiently. Here’s how it can benefit your business:
Easy access to markets. InvestEngine provides a straightforward way to access the financial markets, enabling businesses to start investing without the complexities often associated with traditional investment avenues.
Professional management. For businesses with limited time or investment expertise, InvestEngine offers managed portfolios. These portfolios are curated by financial experts, providing a hands-off approach for businesses that prefer professional management.
Enjoy the ease of ETFs. InvestEngine utilises exchange-traded funds (ETFs) in its portfolios. ETFs are investment funds that are traded on stock exchanges, offering diversified exposure to various assets, such as stocks, bonds, and commodities.
Low-cost. InvestEngine is an attractive option for businesses looking to optimise their returns, with no hidden fees. Also, with commission-free DIY portfolios and Managed portfolios for just 0.25% a year, you can keep more of what you make.
Exchange-traded funds (ETFs) are investment funds that are traded on stock exchanges, similar to individual stocks.
They offer a cost-effective way for businesses to gain exposure to a diversified portfolio of assets without having to buy each security individually. ETFs are known for their liquidity, transparency, and flexibility.
InvestEngine has nearly 600 ETFs to choose from on the platform. Whether you want to invest in a popular index like the S&P 500 or invest more thematically, there will be an ETF to help you do it.
Businesses sitting on excess cash should consider the potential benefits of investing to enhance their financial health. InvestEngine makes it easy for businesses to put their cash to work, providing powerful tools for DIY investing and managed portfolios for hands-free investment management.
Our low-cost structure ensures that your investments can work harder without the hidden fees, so that you can keep more of what you earn for future investment and growth.
Remember, strategic financial decisions, coupled with the right investment platform, can unlock the full potential of surplus funds. Open an InvestEngine Business Account today and position your business for sustained success. Plus, seize the chance to win £1,000! Take advantage of this limited-time promotion by opening your InvestEngine Business Account before the end of the year. Terms and conditions apply.
Explore the benefits of an InvestEngine Business Account and elevate your business to new heights!
Capital at risk. The value of your portfolio with InvestEngine can go down as well as up and you may get back less than you invest. ETF costs also apply.
This communication is provided for general information only and should not be construed as advice. If in doubt you may wish to consult a professional adviser for guidance.
Tax treatment depends on personal circumstances and is subject to change, and past performance is not a reliable indicator of future returns.