President Trump has just signed the Emergency Coronavirus Relief Act (ECRA), which, among other things, makes money from the Paycheck Protection Program (PPP) that was previously expected to be taxable and now tax-free. I’m not an accountant, but it seems to me that if you (rightly) saved some of your PPP money to pay taxes, you now have all that money to go with your business: a veritable Christmas miracle for small business owners and Entrepreneur!
Now there are two types of entrepreneurs. There are those who like to put away money to save for a rainy day, and there are those who like to invest that money in and pursue growth.
If you are in the first category, I fully understand, appreciate and respect your position. If 2020 taught us anything, it taught us that rainy days can and will happen!
On the other hand, if you’re in the second category, it can be an opportunity to find out that your PPP money is tax-free like you’ve never experienced: an opportunity not to be missed. Luck is brave and now is an incredible time to invest in your business.
Here are three ways you can use your PPP money to invest in growing your business through 2021 and achieving the potential you are looking for:
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Hire salespeople: If you have a great business but don’t have strong salespeople to sell that business, you will not succeed. Investing in salespeople is one of the fundamental ways to grow your business as sales play a key role in expanding a business. While investing in more salespeople may seem like a risky expense, it is often the risk as they are quick to pay themselves off. One way to get the most bang for your buck is by using college students who are more cost effective to hire and who offer a unique perspective.
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Spend more on marketing: You can spend more money on advertising or spend more on marketing staff. Increased advertising leads to greater awareness of your company and the product you offer, so that consumers can either learn more about your product for the first time, be reminded of it or, most importantly, be persuaded to buy. Another option is to spend more money on marketers, who are of great help to your business and, in reality, don’t need to be very expensive.
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Bring high-level talent: While spending more money on high-level talent can be expensive, it is often a really good investment. Seasoned professionals can help you with strategy and long-term thinking and can sometimes make the difference between growing your business and success. What could this one important finding be worth to you?
In a year of uncertainty, it is time to take initiative in the things that you can control. With the new stimulus bill, with which your PPP money is tax-free, you now have to decide whether you want to play it safe or take the chance to invest in the future of your company.
The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.
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