Nowadays, many business owners look for alternative sources of both income and capital that will help them sustain their business more effectively.
Considering how competitive and crowded the online market is, it doesn’t hurt to have alternative funding sources if things don’t go well at some point.
For example, lots of business owners trade currencies with the help from sources, such as binaryoptions.com, for example. Others focus heavily on stocks while some prefer to invest in alternative options.
Be that as it may, it all depends on the nature of the business and what type of investment will ideally suit that business and their objectives. With that in mind, here are a few investment options for business owners. Check out bendingdestiny.com for a guide to alternative investments.
Investing in real estate
Real estate investments are one of the most popular investment options for business owners. The fact of the matter is that real estate provides a few opportunities where businesses can capitalize when they need to. Here are a few examples.
- Rental income – Most companies buy real estate properties for rental income. This passive income can help sustain the company in times of turmoil and can also provide them with tax benefits.
- Flipping properties – Since real estate properties are quite liquid for an asset, they can be bought when the price is low and sold when the price goes up much like stocks.
- Inflating prices – Real estate properties can also be renovated which elevates their market price and then sold for a profit.
Therefore, real estate investments can be a great opportunity for business owners. However, they do require a hefty initial investment to acquire, which is why this option isn’t suited for startups and early-stage SMBs.
Investing in precious metals
Precious metals are an alternative investment type that investors use for diversifying their portfolio. However, these metals, especially gold, can also be a great investment opportunity for business owners.
As you may already know, the price of gold is pretty much stable ,which is why gold is often used as a hedge against inflation and geo-political, as well as economic instabilities.
Business owners can use this investment opportunity to protect their assets when market performance or other factors aren’t favorable. Gold investments can actually help companies bridge difficult periods and ensure financial stability.
Stocks are the most popular investment type for both individual investors and business owners alike. The main reason is that stock investments offer potentially high profits on short-term, mid-term and long-term investments.
That’s why so many businesses tend to invest excess capital and profits into stocks. As you may already know, buying stock means buying shares of some company and becoming a small-part owner of that company’s assets.
The thing about stocks is that they are also quite liquid and can be traded seamlessly on the spot. Of course, you need a reliable broker to facilitate trades. Still, stocks offer a great opportunity for businesses to plan their incomes based on market trends.
For example, stock can be sold for instant cash-flow stimuli or you can hold on to them for dividend income. However, the stock market tends to be volatile and prone to influence by outside factors so a good trading strategy is needed to overcome these challenges.
Investing in other businesses
It is no news that companies that are doing well in the market often invest in other businesses as means to either get potentially high ROI or to acquire other companies under their wing so to say. In most cases, companies invest in startup businesses that show great growth and profitability potential.
There are two ways companies invest in startup businesses and it’s done either via angel investments or venture capital. Here are examples of both methods.
Angel investment usually involves startup financing that will allow the startup business to flourish and become successful in the market. In return for the aid, startup businesses must pay their angel investors up to 25% ROI. In addition, angel investors usually fund startups that have noble ideas and products or services that benefit the greater good.
Venture capital investments work similarly to angel investment. The only difference is that venture capital comes with more strings attached.
That being said, companies that invest in startups this way ask for shares of the company and thus become official shareholders and part of the decision-making process. This happens once the startup business has become successful enough to enter the stock market.
Investing in retirement funds
Another interesting investment option for business owners is retirement funds. IRA or individual retirement funds can be a safe haven for company funds and a great way to further invest. That said, many company owners use their IRAs to invest in bonds or stocks and increase their savings or gain additional sources of income.
The most common IRAs are Traditional and Roth IRAs and both come with unique advantages and disadvantages. For instance, Traditional IRAs are not taxed for contributions but withdrawals are taxed at regular rates while contributions for Roth IRA are taxed but the withdrawals are tax-free.
That being said, a retirement fund doesn’t have to be solely purposed for retirement only. As a matter of fact, you can use it as a savings account and withdraw funds even before you retire, should you need to do so.
It’s a good opportunity to save money for rainy days or have funds stored up, in case you need to support your business in the future. Although IRAs are an alternative to more popular investment options like CFDs, for example, they are still worth considering depending on your needs.
Relying solely on business profits isn’t always the best course of action. Many businesses struggle financially when market shifts hit unexpectedly. That’s why it’s important to consider other investment opportunities that will secure additional funds or sources of income.
These funds can help support your business in the future or even help you further invest in your own company and its development and growth. Either way, it’s good to invest in something other than your business for the greater good.