The Importance of Reinvesting in Your Business
🔥 Bonji Hot Takes: Volume 43 🔥
Hi all, welcome back to the Bonji Hot Takes! We hope your week has been filled with success and happiness. The weekend is near, but we hope to offer some value before the week closes and you are enjoying the time off. In our weekly meeting, the Bonji team discussed how we manage to keep a stable price for our customers. Following the Arizona Iced Tea formula, we don't want to raise prices regardless of what is happening on the backend. Keeping the same price for long periods of time, as Arizona has accomplished for decades, is not an easy task. Truly, cutting costs is an art that many businesses aren't set up for. Today, we want to show you how you can reinvest profits into your company in order to help cut costs and keep your prices stable in the future.
How Reinvesting in Your Company Can Save You Money Reinvesting in your business should 100% be on an owner's mind at all times. The owners who end up taking their profits and hoarding them for themselves never see any form of growth and ultimately tend to struggle to maintain their business at all. Understandably, it's not an easy task to turn a profit, it takes countless days and effort. Yet, at Bonji, we take pride in putting nearly everything we gain back into the company, one way or another. This may be offering bonuses to our employees, hiring new employees, investing in more or larger machines, or purchasing more freezer space/trucks. Any way you look at it, we want the profit we earn to go back into building the business up, not stripping away potential opportunities. Of course, not everyone can fully put everything back into the company; in fact, most experts suggest investing 20-30% of profits back. Truthfully, every owner should be focused on growing or somehow positively impacting the company as a whole. Here are some ways you can reinvest to save money and/or get the chance to rapidly grow: 1. Reinvest in People Your entire business relies on your employees being competent and happy. The happier they are the better work they will get done. So whether this is offering raises or bonuses, or simply trying to make their lives a bit easier, it pays to give them some appreciation dollars here and there. Maybe even look into other benefits to include; it doesn't always have to be healthcare related, but maybe some nicer amenities. Additionally, think about bringing in new team members - considering as you grow, you will need more help to push forward. You need to look at the roles you need the most and try to fill those gaps in an efficient manner. Overall, retaining talent and bringing in expertise can improve your business dramatically. 2. Reinvest in Your Equipment For us, equipment plays a major role in our capacity and efficiency. Thus, any time we can either add machines or improve upon systems, we rush at the opportunity. Not only will this benefit your business as a whole, but it also will help make employees' lives easier. You may not see an instant return on the equipment, as it may take weeks or months for you to start working at full capacity. However, it's important to look into the future, when the additional or improved equipment is helping you grow faster than ever. 3. Reinvest in Your Marketing Funneling profits into your marketing has endless benefits and will directly impact the speed of your growth. Just by increasing your marketing budget, the smallest amount may end up pulling in compounded revenue growth. You definitely need to be more focused on the numbers in this case, but regardless, the more money you can play with in marketing the more revenue you'll see come in (if done appropriately and right). This can be dangerous if not done effectively, so take some time when reinvesting into marketing, not everything is as simple as throwing money at it and watching it return. Each time we discuss reinvesting, make sure you are aware of your ROI and don't succumb to the one-off marketers who really don't care about your business. 4. Reinvesting Actually Can Save Money Saving money can come from a ton of different angles, as we've discussed in the past with our article The Art of Cutting Costs. From a tax standpoint, reinvesting profits is classified as a business expense, thus, no income tax. For us, we've seen endless price hikes on raw ingredients over the past two years. Instead of passing along those price increases, we've managed to cut costs in other areas and reinvest in making our systems more efficient. We've bought fuel-efficient delivery vans, invested in machinery that increases output, and scoured the states for multiple ingredient vendors (having multiple vendors provides some leeway for purchasing). Nonetheless, reinvesting in your business is something you should keep at the top of your mind as you look forward to the future and growth of your company.