Maximise ‘Silly Season’ Profits

Maximise ‘Silly Season’ Profits

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Theunis Fourie, head of Liabilities at FNB Commercial Banking, advises businesses to consider investing the profits they make over the December period.

Fourie says, “Regardless of how tough the conditions are, many South Africans are likely to spend lavishly over the holiday season. The increase in spending is always a welcome boost for businesses but I suspect that, while many business owners know they should, few truly think about, or plan for investing their ‘silly season’ profits.”

Investing is still a daunting prospect for many investors, even those who’ve been in the business for a long time, and understand the various forms of risk and their associated returns.

Before investing in any of the available options, it’s always important to do your homework and heed the most basic rules of investing.

Prior to investing – in fact, prior to having the money to invest – clients need to thoroughly plan how and why they want to invest, and what they want to invest in.

Things to consider:

  • When will need money to be available? Space investment maturities to match your liquidity requirements.
  • How prone is your business to unexpected financial shocks? Consider holding a portion of the money in short term deposits that can be accessed quickly and at a low cost.
  • What is your risk appetite. It is worthwhile considering higher risk options that, under normal circumstances, would pay higher returns.

Once you have made your decisions and formulated your plans, put everything you require – accounts being opened, etc. – in place now. A great plan has no value of you cannot implement it!

Entrepreneur
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