Sunday, December 26, 2010

Small business advice for investing your extra cash in a low interest rate environment

As a business owner, there are limited options to invest your cash safely and get a decent return. It is not like it was a few years ago where putting your money in a savings account or money market account would give you 3% or more annually. If you have unused space for your business, buying in bulk to achieve discounted pricing might give you a decent return. Consider the fact that even saving 5% on bulk adds up. Another option is to stockpile raw materials you commonly use in manufacturing...since commodities are forecasted for further rise in 2011 locking in pricing or hedging your future costs may increase your bottom line and make you more competitive in the future.

As always your best option may be to pay off credit cards and line of credit debt. Although not considered an "investment" lowering these debts make you appear bankable, save you monthly, and allow you a cushion to access if you need cash quickly

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