You finally cracked the code. You found a weird little corner of the market, dominated it, and now you have a pile of cash sitting in a business bank account.
Most people panic at this stage.
I see it constantly. A founder spends five years eating ramen and working 80-hour weeks. Then, suddenly, there is a quarter-million dollars of pure profit staring back at them. The brain short-circuits. They buy a Porsche. They put it all in a high-risk crypto coin because their cousin said it was “going to the moon.” Or worse, they let it sit there, rotting away due to inflation because they are terrified of making a mistake.
Stop it.
Making money and keeping money are two different skill sets. You mastered the first one. You are probably a novice at the second. I have messed this up myself. I once poured 50k into a “sure thing” tech expansion that went to zero in six months because I felt invincible. It hurts. It humbles you.
Here is how to deploy that capital without blowing up your life.
Leverage External CFO Services for Financial Strategy
Before you buy anything, you need to stop acting like you know everything about finance. You don’t. You know your niche. You know how to sell widgets or consult on specialized software. That does not make you Warren Buffett.
I used to run my own books. It was a disaster. I missed tax deductions. I sat on cash that should have been working. It wasn’t until I hired professional help that the numbers actually started making sense.
I am not talking about a basic bookkeeper who just categorizes your receipts. You need strategy. If you are scaling past the seven-figure mark, look into external cfo services. These guys come in, look at your margins, and tell you bluntly where you are bleeding money. They act as a sanity check. When you want to burn cash on a vanity project, they are the ones who show you the math on why it is a stupid idea.
It costs money. Do it anyway. The ROI on not making a six-figure mistake is infinite.
Invest in Lifestyle Assets
If you are going to buy real estate, stop buying boring suburban boxes that yield 2% after maintenance. If you are a business owner, you should look for assets that serve two purposes: cash flow and lifestyle enhancement.
A buddy of mine ran a logistics company. Stressful work. He took his profits and started buying holiday rentals in high-demand areas. He didn’t just buy random condos. He targeted spots he actually wanted to visit.
He looked heavily at Noosa Accommodation. Why? because it holds value, the occupancy rates are ridiculous, and this is the key he gets to stay there when it is vacant. He writes off the trip to inspect the property. He enjoys the asset. It pays for itself.
There is a psychological benefit here too. Owning a tangible asset in a beautiful place anchors you. It reminds you why you are working so hard. Stocks on a screen don’t do that. Just make sure you run the numbers on management fees. If you are paying 20% to a property manager, your margins get thin fast.
Acquire Stable Assets
You made your money in a niche. Maybe it’s volatile. Maybe it’s a trend that might die in five years. The smartest hedge against your own business dying is buying a boring business that will never die.
I am talking about uncommon industries.
Commercial cleaning. Laundromats. Childcare.
These businesses are not going to 10x overnight. They are not going to get you on the cover of a magazine. But they print money.
I recently spent a month looking at listings with childcare business brokers Melbourne. The multiples there can be aggressive, but the demand is permanent. People stop buying luxury goods during a recession. They do not stop needing someone to watch their kids so they can go to work.
Buying a boring business stabilizes your income. It turns your high-risk entrepreneurial jagged line into a steady upward curve. It is not exciting. It is profitable.
Allocate Capital to High-Risk Venture Investments
You are an entrepreneur. You have a high risk tolerance. If I tell you to put 100% of your money into index funds, you will get bored and do something stupid anyway.
So, scratch the itch intentionally.
Take 10% of the profits. Only 10%. Put it into high-risk, high-reward bets. This could be angel investing in a startup in your industry. It could be Bitcoin. It could be a marketing experiment that might double your leads or might return zero.
Treat this money as already gone.
If it hits, you look like a genius. If it goes to zero, it does not change your lifestyle. The last time I did this, I backed a friend’s e-commerce launch. It failed. I lost the cash. But I learned enough from watching him fail that I saved double that amount in my own business the next year. Education costs money. Sometimes you pay tuition to a university, sometimes you pay it to the market.
Strategic Reinvestment vs. Market Saturation
The default advice is “reinvest in your business.”
Maybe.
If you can put $1 in and get $3 out, yes, do that. Pour gas on the fire. But if you are in a niche that is capped, spending more money won’t help. I know a guy who spent $100k on ads for a service that only had 500 potential customers in the entire country. He saturated the market in a week. The rest of the ad spend was wasted.
Know the size of your pond. If you have captured the market, take the profits out. Don’t force growth where it doesn’t exist.
Maintain Liquidity and Cash Reserves
Cash is freedom.
Don’t tie everything up. You need a war chest. Opportunities pop up when you least expect them. A competitor might go bust and offer you their client list for pennies on the dollar. A regulatory change might open a new door.
If all your money is locked in property or long-term bonds, you can’t move. Keep six months of operating expenses in cash.
You won the first round by making the profit. You win the game by deploying it without emotion. Be boring. Be calculated. And for the love of god, don’t buy the boat.