No matter how much you try to plan for your business as a fashion entrepreneur, sometimes, the unexpected and unplanned happens and you have to take charge and handle them. While some of these unforeseen circumstances might be negative, others will be positive. An example of a positive one is having excess money in the business.
Excess money in the sense of money you did not plan for earlier. For example, if you planned to make ₦200,000 in profits for September but you ended up making ₦800,000 instead, the extra ₦500,000 is ‘excess money’.
This week, we reviewed a video by Brand Strategist, Beth Fayemi, on what to do with ‘excess’ money in your business. In it, she outlines 5 ways excess money can be used wisely by fashion entrepreneurs.
The video aims to help fashion entrepreneurs know how to spend unplanned for money in their business wisely.
The review will cover;
- how applicable and useful the points are, and
- important points missed out.
Useful Points for Fashion Entrepreneurs
First off, when you discover that you have made more money than you planned for, before thinking of what to do with the money, just relax. This will make you calmer. Afterwards, tell yourself that you cannot afford to spend the money anyhow because you need it. Now, it is time to think of ways to spend it wisely;
1. Save Your Money
As a fashion entrepreneur, saving should be one thing you always have on your mind when it comes to funds. You can save up money for emergency funds for both you and your business so when your business gets caught up in tight situations, you always have some money to fall back on.
Remember to save for the future.
Saving does not mean you cannot spend some money on yourself and pamper yourself, but you should not spend too much money on that. For saving and building your personal finance, you can use apps like Piggyvest, Cowrywise and co.
2. Invest in Real Estate
Depending on the amount of excess cash you make, you can invest in real estate. These days, in Lagos, there is land for as low as ₦400,000 so you can use a part of the money to buy such land. With investing in real estate, you can just leave the land to appreciate over time and sell it off at a later time.
You, however, have to be careful when investing in real estate and make sure you are not being scammed by the seller of the land. Some real estate companies you can go through include Landwey, Adron Homes, RevolutionPlus Property, and Kings Court Realtors.
3. Start a New Business
Having multiple streams of income is wonderful. As a fashion entrepreneur, when you find yourself with excess money, you can choose to start a new business – it could be something that relates to the fashion industry or not.
You might consider starting a business that falls into the category of pain points you had in your business to provide a solution for other businesses that might be going through the same problems. For example, if you have problems with logistics in your business, you can start a logistics company.
Just like it was when starting your fashion business, do as much research about the new business as you can to understand the market and know how viable your idea is. Never rush into a new business without first understanding it.
4. Invest in Another Business
There are so many people that have amazing business ideas or are already in business and are looking to partner with someone who can provide loans to them. Look for businesses you can see potential in and invest in them. You do not even have to be active in these businesses to get a return on your investment.
Help somebody with the excess money you have.
They say, “Givers never lack.”, and it is true. Giving does not necessarily refer to taking all your excess money and giving it to someone, you can give the needy or even give someone the money to start their own business. Give somebody a part of your excess money.
Important Points Missed
1. Invest in Your Business
As important as saving for a rainy day, starting a new business, and investing in another business are, you should always invest as much cash as possible back into your business. You might want to develop a new product, improve on an existing one, expand your market reach, redesign your website, invest in staff, or buy extra tools and equipment.
Whatever it is you choose to do must ultimately potentially improve cash flow down the road.
As Bukola Akindele, the creative director of Romi n Rire fashion brand shared with us, excess cash can be helpful when put back into the business.
“When I got excess cash from my business, I poured the money back into the business. I used it to create new designs and buy fabric and accessories.” – Bukola Akindele.
2. Eliminate Debt
If your business owes any money, to save yourself from possibly having to shut down business operations along the way due to unpaid debt, this is a good time to pay it off. Paying off debt sooner rather than later saves you from having to pay more interest on the money you borrowed.
Before taking yourself out on a vacation with the excess money, remember the debt you owe and settle it first so you know that chapter is behind you.
The Usefulness of the Information to Fashion Entrepreneurs
Every fashion entrepreneur has one thing or the other to pick from this video. No matter how little or how much the excess money you get in your business is, there is something here for you. The video is not only useful but it is also very applicable for fashion entrepreneurs in these times that we live in.
There you have it, 7 ways to spend excess cash in your fashion business. Do let us know which you will be opting for in the comments section below. Don’t forget to hit the like and subscribe buttons also.