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Small Business Investing

Managing a Small Business

As an investor or owner of a small business, why does proper management help me increase the return on my investment?

As an investor or owner in a small business, one great benefit is the ability to make corrections in the company to help improve its financial picture (and ultimately its ROI). You have a unique opportunity to be able to invest in a business and then directly affect any part of it that materially affects the company’s financials. You cannot exert that sort of influence when you are one of perhaps hundreds of thousands of shareholders in a mutual fund. At best, you may be able to call the toll-free customer service line when you have a question about your account. But you cannot request any kind of change to any of the companies in the portfolio of holdings of the fund. When you invest in a small business, you can improve the financials considerably by properly managing the investment. If you make the correct combinations of changes, you may increase your earnings and returns of the business.



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