Do you have clients who received COVID-19 stimulus checks and tucked them away for a rainy day? If they haven’t spent the money yet, your clients may be able to invest their checks in their businesses.
Read on for ideas on what you can advise your clients to do with their stimulus checks for business growth.
5 Business investment ideas for unused stimulus checks
Since the beginning of the coronavirus pandemic, the government has sent out a few rounds of stimulus checks. Here’s a breakdown of the COVID-19 legislation and stimulus check amounts:
- CARES Act: $1,200/person maximum
- Consolidated Appropriations Act: $600/person maximum
- American Rescue Plan: $1,400/person maximum
Not all taxpayers received checks each round, as they were based on an individual’s adjusted gross income. And, not all taxpayers received the full check amount, as they were phased out after a certain threshold.
Maybe your client received one or more of these Economic Impact Payment rounds. And, maybe they set aside the funds in a savings account. That’s who these business growth ideas are for.
So if your client is unsure of how to use their stimulus check(s), here are a few ideas for business growth
1. Pay down business debt
Chances are, your client has some sort of business debt, like a loan, a line of credit, or an unpaid bill. And if they do, they might consider using their stimulus check to pay off said debt.
Who wouldn’t want to cut down on accruing interest, penalties, and late fees?
According to one study by the Bureau of Labor Statistics, 59% of stimulus check recipients said they’d use most of the money to pay for expenses. And, 13% said they’d use the majority of the funds to pay off a debt.
Go over your client’s accounts payable aging report with them to see if they have any outstanding invoices. You can offer guidance on which bills they should focus on first to reduce late fees and maintain strong relationships with vendors (maybe your client even has an unpaid bill from you!).
If your client is caught up on bills, they can use this opportunity to make business loan or credit payments in advance. And if possible, they could even wipe out a loan with their stimulus money.
2. Invest in new business equipment
Is it time for your client to invest in better equipment, tools, and/or supplies? If a client has been putting off a new (but necessary) purchase, now might be the time.
Examples of new equipment, tools, and supplies that could help your client grow their business include:
- Copy machines
- Machinery (e.g., forklifts)
- Accounting software
- Personal protective equipment (PPE)
- Payroll software
Investing in better-operating equipment could help a client grow their business. New equipment and tools could mean streamlined processes, reduced errors, top-notch results, and improved customer relationships.
Not to mention, these types of investments could help your clients reduce spend over time. To help your clients compare costs between a current and new asset, consider going over life cycle costing with them.
3. Increase marketing spend
Marketing generates sales. Sales lead to growth. If your client wants to grow their business, they may decide to increase their marketing spend.
Your client could put their stimulus check toward:
- Pay-per-click advertising
- Social media advertising
- Direct mail marketing
- Influencer marketing
- Refer-a-friend programs
- Loyalty programs
- Marketing tools (e.g., email marketing software, social media management software, etc.)
Remind your clients to track their return on investment (ROI) to see whether the increased spend is worth it or not.
4. Hire a contractor
Has your client been putting off certain key actions, like setting up a business website or fixing some electrical problems?
That untapped stimulus check could be your client’s ticket to hiring a contractor and getting some much-needed work done … especially if they don’t yet have a small business website up and running.
Like investing in new business equipment, tools, and supplies, investing in a contractor can help your client grow their business.
But before your client decides to hire someone as an independent contractor, remind them of how important correct classification is. Businesses that hire workers and misclassify them as contractors instead of employees could wind up with penalties, back taxes, and interest.
5. Take a business course
Last but not least, you could suggest your client invest in their business by investing in themselves. After all, knowledge is power.
Your client could grow their business by:
- Taking a business course
- Going through a rigorous training program
- Obtaining a business certificate (e.g., Certified Business Analysis Professional)
These types of learning opportunities help business owners improve their management skills, financial knowledge, marketing skills, and administrative knowledge.
Your client may also put their stimulus check towards employee training programs. By investing in their employees, your clients could also help grow their business by ensuring their team is continually improving their skills and knowledge.
Whether your client decides to enroll for themselves or their team, there are plenty to choose from. There are plenty of in-person and online training opportunities to choose from.