As part of the day-to-day management of a business, it may often be necessary to make significant immediate expenditures, whether for the purchase of raw materials or finished products of all kinds, for hiring new employees, the development of new products or services, the takeover of an existing company or the financing of a merger with a competing company…
Today’s expenses can become tomorrow’s profits. What are the different levers of action that would allow me, the business manager, to make the expenses that would be beneficial for my business in the future?
Spending means thinking well beforehand and above all not starting from received ideas. It is therefore necessary to analyze the optimization of course, but also the time that it will take for this expense to become a source of development. If you are embarrassed by an advertising example before it brings new business, it will take some time. If you have software that will show you how to win over repetitives before it is mastered by all of your teams, there will be a delay that may turn out to be longer than you think and therefore you will certainly lose productivity.
Every expense must generate a return on investment
Why the expenses you make in your business can become positive in the long term? All companies today resort to what is called financial optimization, that is to say, to make every effort to spend usefully, to ensure that all the money coming out of the company turn into charity in the medium or long term.
All the expenses incurred in a company fall within the framework of a productive logic, that is to say that all entrepreneurs expect a return on investment from each of their actions, whether it is wages, production , financial and economic expenses… By buying one of the big supermarket companies in Brazil, Carrefour, for example, spent large sums that today are a source of profit and profit.
The financing of new activities as the main solution for your future profits
Funding new business is often a line item, but it will be your main source of ROI in the future. The launch of a new product or an innovative service, the creation of a research and development unit, the creation of another company or the creation of a subsidiary internal to your company… All these numerous activities may require significant expenses while bringing in considerable sums over the medium or even long term.
Also on the recruitment side, certain expenses for important employees can generate strong long-term benefits because their skills can energize the company.
It is therefore up to you to properly estimate the amount of your expenses that could be the financial expected for your project. Ask yourself the question of profit before investing, this will allow you to make each of your expenses solutions for future earnings.