EPISODE 117 : Reinvestment of profit for growth

I was once told that the simple path to growth is a willingness to reinvest profits back into a business.

What I wasn’t told was just how much of the profit I need to reinvest back. And perhaps that was the point … just like much of what I do now in my business and the coaching programs I have developed for my clients, understanding just how much to reinvest back into the business by way of profits is really dependant upon the goals of the business owner and of course the greater goals of the business itself.

Let’s examine the premise of reinvesting profit back into business and how it’s an effective way to increase not only the value of the business, but it’s future growth .. Take a listen … A x

Key episode moments ...

• Profit reinvestment defined [01:30]
• Benefits of profit reinvestment [02:00]
• Why would you need to reinvest profits [02:25]
• What I’ve learned about profit reinvestment [03:09]
• Important metrics to understand about cash investment [03:38]
• How to determine just much profit to reinvest [05:04]
• Why you should have a cashflow strategy [07:12]
• Actionable steps to assist in determining how to generate cash to reinvest [07:47]
• The conventional approach to what percentage you should reinvest your profit [14:15]
• Important warning on continual cash injections (not reinvestment) [15:15]

Links mentioned throughout

• Small Business Cashflow Course www.amybajada.com.au/sbcc