Wall Street is No Place for a Start-Up: Investing Your Business’s Funds Wisely

You’ve got to spend money to make money, right? So you’ve got a startup in mind; you’ve also even gotten together some capital to make it a reality, so that means it’s time for you to use that money wisely. Obviously, you want to pay off your loans as quickly as possible, so why not look for something with fast returns?

For business owners behind startups, this line of thinking has spelled doom for hundreds of companies, including those that proved to be very successful. The reason business loans have such a long term on them isn’t to get the most interest out of you over time, it’s because making a business profitable can be a lengthy endeavor.

Here’s some investments to steer very clear from if you want to keep your business as low-risk as you promised your creditors it would be:


Wall Street is as Volatile as Las Vegas

As a now business-owner, you might think that you have the savvy to know the business world inside-and-out and can get involved with the stock market confidently. The truth is that making stock investments with your business funds is an overly risky call at best.

Liquid assets proves too often to be an appropriate name when the money you’ve got invested in someone’s else business slips through your fingers with a plummeting quote. The thing about an investment that makes it valuable to a business is that you should be able to access those funds at a moment’s notice if an emergency comes up, instead of having to hope that your stock portfolio is worth enough to cover whatever comes up that day.

Instead: Save patiently. Generally speaking, any money you get for your business should be used toward your business exclusively. Even if you’re making small payments back on your funds at first, set aside a percentage of profits into an account with high interest. Eventually, the interest you earn will offset the interest you pay until you’re paying back more and more progressively.

Nobody Likes A Show-Off

So if you should put money back into your business, why not go all out? Get a big location in a posh office park; put a down payment on some company cars, and let people know you’ve got the goods to live in the fast lane. Now you’ve really got it made, right?

The problem with this plan is that not only is it reckless, but it can have an adverse affect on potential clients. Your average consumer might walk in and be impressed by the picture windows and the koi pond, but anyone else responsible for running a business will see nothing but excess and wasted resources.

We all want to add a touch of style to what we do, but purely cosmetic touches will have clients putting a countdown clock in their head to when your picture windows are boarded up.

Instead: Find a Marketer. Ad space is still a beautiful thing for a startup wherever you can get it at the right price, but something that doesn’t have to cost money is a social media account. If you don’t have the time to manage a startup and cultivate an online community, there are plenty of online services or freelancers, or you can even hire someone in part-time to handle it.

calculator and graph

Spend Wisely to Invest in the Future

Even if you’ve been careful and counting every penny to make sure that your startup operates at as low a cost as possible, it can be tempting to want to do something with the money left over. Maybe you want to be responsible and pay it right back. Maybe you figure that using it to enhance your business before launching is the best way to make sure the money comes back faster.

In truth, you should simply hold onto it. Businesses take time to grow and mature, no matter how much money you put into developing them. If you want to do something, run a small ad campaign, but don’t exhaust your funds if you don’t have to. You should be prepared for an emergency in case one comes up, and if you haven’t made any money yet, you’ll need some to stay afloat.