By Akhil Shahani, an EO Mumbai member and CEO of The Shahani Group
So you made some extra cash in your first business. Planning to blow it all? Not a bad idea, but you could do better things with the money. Investable surplus is what remains after all liabilities have been taken care of and therefore could be plowed back into the business. Growth and business expansion is impossible without timely reinvestment and hence, any investable surplus should be dealt with appropriately.
Depending upon the nature of the surplus, recurring or one time, one could utilize it in different ways:
Business cycles: Economic forecast are more often than not exaggerated and very rarely do the predicted boom phases last for long. You may need to hire a professional to help you analyze the market conditions. Also check whether the surplus is something that you could expect periodically or if it is a one time gain. Knowing this will help you plan better. (more…)