Investing for Small Business

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					Whether a sole-proprietorship, partnership, or a limited liability corporation, all small
business owners know that they are already investors in their own business. With so
much involved in the day-to-day operations of running a business, many small
business owners place investing in the back of their minds. However, this can be a
dangerous way to operate. After all, when you're the boss, you're also in charge of
your own retirement plan and in finding ways to reinvest in the company without
damaging the capital you've already built.

Here are a few key tips in small business investing:

- Your business is part of your portfolio. When deciding on an investment strategy for
your small business, do not neglect to consider your business as a part of your
investment portfolio, since you may be able to tap into some of your existing equity or
value in order to make new gains.

- Tone down the entrepreneur. When considering your investment strategy for your
small business, consider risk. While the entrepreneurial spirit can make a person a
successful business owner, it may also make them a horrible investor by encouraging
them to take on too much risk. Slow down and understand when and where to be
aggressive in your investments.

- Strategize for capital preservation. While your personal portfolio may be built
around simple growth, your small business investment portfolio should strategize for
capital accumulation and preservation. That way, when lean economic times come,
your small business can lean on its portfolio to help generate income.

- Diversify outside your business. Small business owners may want to invest in their
industry; after all, it is the industry they know best. But try to avoid putting all of your
investments in one industry. If the industry falls on hard times, your business and your
portfolio will both take a beating.

- Allocate your assets. It may be tempting to put all of your money in one place, but
you need to properly allocate your assets to make them work for you. Stocks can
make you a lot of money in the long term but can be risky short term; bonds are less
volatile than stocks but also have a lesser yield, and cash in the form of savings and
money market accounts do not earn much in comparison. Talk to a financial planner
about properly allocating your assets to make your money work best for you and your

This last step, talking to a financial planner, is probably one of the most important you
can make. When making decisions on how to build your small business investment
portfolio, consult someone who is as good as his or her job as you are at yours. Your
financial planner can look at your business, manage risk, and help you to define goals
that make sense for your business. Talking to a financial planner will ensure that you
create an investment portfolio that makes good financial sense now and for the future.