Five Key Investments Entrepreneurs and Small Business Owners Should Make

Anisha Sagar

Anisha Sagar

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It is a cliché, but the saying “you’ve got to spend money to make money” is undeniably true. From the advertising campaigns of multi billion dollar companies like Apple and Coca Cola, down to the smallest ‘one man band’, investing in your company is absolutely vital to ensure continued growth.

The UAE is home to countless entrepreneurs – over 15% of the working age population is currently running a small business or is working as an early-stage entrepreneur. If you are part of that enterprising group, the following tips will help you decide where to invest money to ensure your business keeps growing.

Why invest in your business?

If you are running a small business, there may be lean times where profit margins are slim. Without large amounts of capital coming in, it might seem unwise to spend any more money than you absolutely need to. This is completely understandable; but investing in a business normally pays back far more than if you were to simply keep treading water.

The benefits of investing in your business include: 

Your business will grow

So long as you make smart investments with a clear plan, investment often leads to more customers, sales and growth.

Less stress

Investing in your business means you will have more capital or resources available to do the things you want to do today. Rather than scraping by and struggling, investing in the business means you have access to more resources and breathing space.

Allows you to focus on what you do best

Investing in your business means that you can delegate or outsource tasks which you prefer not to do (be that accounting, sales, account management or anything else). That gives you more time to focus on the things you do best.

Saves time

Similarly, investing in your business can also save you a significant amount of time. Rather than spending all your hours doing every single task, you can outsource or delegate jobs to people who can do the work for you.

5 investments entrepreneurs should make in a small business

So, are you ready to take the plunge and make some investments in your business? It might be nerve wracking at first, but the benefits normally outweigh the costs.

Here are five investments that entrepreneurs and small business owners can make to grow their companies.

1. Invest in yourself and improve your skills

No business owner knows everything about running a company from day one. It is therefore valuable to set aside some time to expand your own skill set in order to run your company more effectively. Investing in your skills can take a variety of formats – it might simply be about reading business management books, signing up to a training website, or attending a specialist course related to your industry.

The benefits of investing in yourself to improve your skills is that you will become significantly more efficient and capable when running the company. While trial and error is always a part of entrepreneurship, you can save a lot of time – and avoid a lot of common mistakes – by learning from people who’ve been there before.

Example: Leila runs a tailoring business for professional women’s wear in Dubai. She decides to join a mentorship scheme where she learns from more experienced business owners. They are able to discuss her business model, provide invaluable advice on how she can grow the company and introduce her to potential customers.

2. Invest in your people

Your employees are by far and away your most valuable asset. They have key skills which are often vital to the running of your company. Investing in their skills will only make them more productive and efficient. Training can focus on specific task-oriented skills (such as a marketing course for marketeers) or general skills, such as management training.

Besides making them better at their jobs, the benefit of investing in your people is the fact that it makes staff feel much more valued by your company. Investing in them shows that you are taking their long-term professional development seriously – and this can really boost loyalty.

Example: Mohammed runs a small technology consulting firm. He has employed two junior contractors to provide technology support to customers, and he decides to send them on a week-long training course where they gain new skills in customer service. Once they are back from the course, both employees start offering customers much more helpful support, and this generates several new contracts for Mohammed’s business.

3. Invest in product offering and revenue channels

Many businesses start out with a very limited set of products or services which they have found a market for. This is great to begin with, but if you wish to grow your start-up it is usually essential to expand your product line and grow your revenue channels.

Once you have initially sold a product, adding new lines gives your initial customers a reason to come back, while also attracting new business too. Another benefit of investing in your product offering and revenue channels is that it means you can cross-sell and upsell much more easily if you already have additional products available.

Example: Karim has launched a company that sells a special kind of in-home air purifier. It is popular to begin with but after selling the products to a number of customers he sees demand gradually drop off. Rather than continue trying to sell just one product, he invests some of his profits in expanding his revenue channels. Karim offers an air purification consultancy service where he visits potential customers’ homes to advise them on how to improve indoor air quality. This means he not only wins new business, but he can also cross-sell the original product too.

4. Invest in search engine optimization (SEO) for your website

The Internet is a major source of information about products and services for many people today. Whether they are looking for services or products, designing your website so that it appears on search engine results pages is a vital step to winning new business.

Example: Amira runs a small business that sells luxury handwoven carpets to tourists and high net worth individuals. While her traditional method for selling the carpets was a physical store in Sharjah, she decided to invest in SEO for her website. By improving the way pages are organised, she begins selling significantly higher numbers of carpets over the website – both within the UAE but also internationally.

5. Invest in increasing your brand exposure

Brand exposure is about getting your company’s name out there. Fundamentally, if people don’t know what you do, their chances of hearing about you are very limited. Increasing your brand exposure is about marketing and communications, as well as public relations. It involves a long term strategy for getting your company’s name out there. There are many different brand exposure strategies, and they will vary depending on the kind of business you run.

The benefit of increasing your brand exposure is that you are more likely to be ‘top of mind’ when someone is thinking of purchasing the product or service you offer.

Example: George is the owner of a small engineering consultancy in Abu Dhabi. His company does excellent work for a small number of clients, yet he is struggling to gain new business. George decides to increase his company’s brand exposure by using the services of a PR agency. They get a number of stories written by bloggers and journalists which feature some examples of George’s company’s work in specialist trade publications. This exposure means that new customers who had never heard of his business before start getting in touch to inquire if he can help them on new projects.


Ready to invest in your business?

Investing in your small business can make a real difference when it comes to growing your company and winning new customers. And, as the examples above demonstrate, those investments can pay off significantly.

FAQ 1: What Should an Entrepreneur Invest In?

Knowing how to invest as a small business owner as well as what you should invest in, is a very important matter. Here are a few key things you should invest in:

  1. Invest in Yourself and Improve Your Skills
  2. Invest in Your People
  3. Invest in Product Offering and Revenue Channels
  4. Invest in Search Engine Optimization (SEO) for Your Website
  5. Invest in Increasing Your Brand Exposure

FAQ 2: What Are Small Businesses Investments?

Small business investment companies (SMICs) fill the role often played by venture capital firms by providing small businesses with debt and equity financing. Small business investment companies are known to be licensed and privately owned by the Small Business Administration (SBA).

FAQ 3: What Do I Need to Know Before Investing in a Small Business?

Though profit margins may sometimes be slim without large amounts of capital coming in, investing in a small business normally pays back far more than you may expect. Before starting your business you need to know that investing in a small business provides you with many avenues for business growth, is less stressful, saves time and allows you to focus on what you do best!

FAQ 4: How Much Should You Invest in a New Business?

Depending on the business activity and license, the minimum share capital amount varies significantly by free zone, ranging from AED 1,000 to AED 1,000,000. Free zones in Dubai generally require 50,000 AED in share capital.

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