The Single Best Place to Invest (or Reinvest) Business Capital: Advice from 27 Small Business Finance Experts

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Among the very top financial goals that any small business typically strives to achieve are: positive cash flow, steady sales, and return on invested capital. Not all small businesses can say that they’ve been able to meet these goals and if they do, it usually takes a long time to do so.

So for small businesses who have met these markers of success, one of the most crucial next decisions is then – what is the best way to invest or reinvest this new business capital?

Since Direct Capital helps many business owners learn how to maximize the value of their capital investments, we wanted to learn more about strategically investing and re-investing business capital. More specifically, we wanted to discover expert tips from small business finance experts on what they would consider to be the smartest places for a business to invest (or reinvest) capital in order to get the greatest returns. To do this, we asked 27 small business finance experts to answer this question:

“What is the single best place small business owners should invest or re-invest capital to get the biggest bang for the buck for their business? “

We’ve collected and compiled their expert advice into this comprehensive guide on the best places to invest business capital. See what our experts said below:

Meet Our Panel of Small Business Finance Experts:

Jay OfferdahlJay Offerdahl

Jay Offerdahl is the President of Viking Mergers & Acquisitions, a firm that specializes in the merger, acquisition and divestiture services for the mid market company. After graduating from Appalachian State with a Finance degree, Jay started working with his father, Brad, and together they founded what became Viking Mergers & Acquisitions in 1996. Jay’s dedication and experience, combined with his passion for serving business owners, are found in hundreds of successfully closed transactions and satisfied client testimonials. Jay is an active member of Charlotte Entrepreneurs Organization and is recognized as a top producing business intermediary in the Carolinas.

The most valuable capital a business owner can invest in is…

Human capital.

Taking the time to hire and train good, reliable employees can help a business owner in every other aspect of his business. Employees are the core of a business – having the right ones will elevate your business to the next level.

Benjamin L. LuftmanBenjamin L. Luftman

An experienced and accomplished legal advocate, Benjamin L. Luftman is a founding partner at Luftman, Heck & Associates and has practiced law for eleven years. His practice areas are solely focused on criminal defense and traffic defense, having represented clients ranging from serious felonies like murder to minor traffic violations. He regularly speaks about topics pertaining to DUI law, including defenses, evidentiary issues, and more. You can find more about Ben on his website,

In my opinion, the one of the most important places where small business owners should invest or re-invest capital to get the biggest bang for their buck comes down to just one word:

Employees. It also happens to be the once place that’s most often overlooked.

Active, engaged employees have the ability to make or break your business. When your employees feel like they have a say and feel like they have some ownership of the company, work ethic skyrockets. They have a vested interested in the business, and they want to see it succeed. I’ve seen it first hand.

In addition, having a well-designed and optimized website to help attract potential clients is absolutely vital. Spend the time and money to develop engaging, useful content to help people find you when they need you most.

Jason ZickermanJason Zickerman

Jason Zickerman is President & CEO of The Alternative Board (TAB), the world’s largest provider of executive peer advisory boards servicing over 3,000 business owners worldwide. Jason leads the strategic vision and expansion of the company. His ability to counsel businesses to positions of market leadership drives TAB’s landmark success as the world’s largest peer board and coaching franchise.

When it comes to the best place small business owners should invest capital, my advice is to…

Invest in people.

In January 2015, The Alternative Board released a survey <> revealing what entrepreneurs wish they did differently in the beginning stages of their businesses.

Looking back, most business owners wish they had invested their capital differently. According to the survey results, 20% would spend more money on marketing/advertising/PR, 18% on hiring and training employees, 17% on sales, and 15% on strategic planning. Not to mention, 24% of entrepreneurs agreed that better coaches and mentors would make the single biggest difference in their business.

These results indicate that business owners may want to invest more capital in finding leads, quality talent, and dependable mentorship rather than further developing the product or service. Remember, business begins with people.

Alexia BregmanAlexia Bregman

Alexia Bregman is the Owner of Vuka Energy Drinks and heads up marketing and advertising for the VUKA brand. Her career in advertising saw her rise to manage a large team of creatives and account personnel, head up a multi-million dollar P&G account and win several large pieces of business. As a seasoned advertising creative, she was entrusted with some of the world’s largest brands like IBM, Avis, AT&T, P&G, Lever Brothers, South African Breweries and Smithkline Beecham to name but a few. She has created successful, and sometimes even award winning advertising campaigns for hotels, radio stations, food, headache pills, beer and more. Alexia has created online campaigns, below-the-line promotions, million dollar TV ads and radio spots. She now applies this knowledge of brand building to Vuka.

The single most important place where small business owners should invest or re-invest capital to get the biggest bang for their buck is in…


Invest your capital in great employees and you’re investing in one of the biggest assets available. Hire smart and hire well and you can turn that investment into solid growth.

Sean De ClercqSean De Clercq

Sean De Clercqthe is the CEO of, a company that works with small businesses to help them free up working capital so they can invest in growth activities. Kickfurther is a crowdfunded inventory marketplace and Sean has worked closely with several business owners to ascertain exactly what they are planning on investing their incoming capital on.

In my experience, the one thing that small businesses need to invest in more than anything else in order to accelerate their growth is in…


In general this is learning about their customer segment. In general this means going to trade shows to meet with prospective customers, or increasing marketing spend and tracking the metrics to see which marketing campaigns are most effective.

A good example is one of our partner businesses. Marlie Madison Boutique spent $75k on Facebook ads before she really honed in on her target market. After 2 years she has a business generating over $400k in revenue. This is primarily due to the fact that by spending money on ads and various campaigns, as well as going to events and actually meeting her customers, she learned that there was an untapped niche. She now markets primarily to plus size women and does extremely well.

Runner up would be product development, but unless you understand your market, product development isn’t going to do much.

Kurt B. UhlirKurt B. Uhlir

Kurt B. Uhlir is CEO & Co-Founder at Sideqik – the together platform. He is known for leading, advising & building disruptive companies across six continents. He is the lead inventor on 10+ US & international patents, including fundamental patents covering check-in services and major parts of mobile advertising. Kurt helped to lead Navteq through their IPO and later $8.1 billion acquisition by Nokia in 2007. He is an active mentor at Georgia Tech’s Flashpoint startup accelerator and TiE Atlanta.

There are so many places a business owner could invest. However, it really comes down to one question that should drive the decision on where to invest or re-invest:

Could the business currently support additional customers or is there something that would hold it back from having another 1, 5 or 100 customers?

If there’s a bottleneck in operations (e.g. check out lines are already long, we’d need another staff to fulfill another contract, etc.), you have to address that to make sure you can grow and have happy customers.

If your business has excess capacity, it’s a marketing issue. There’s different stages of marketing – short-term focused and long-term. Fundamentally, marketing is about storytelling about current happy customers and reachingnew ones.

Rob MarshRob Marsh

Rob Marsh is the owner of, a small business dedicated to helping new startups look their best by creating an amazing logo design.

I’m a small business owner who has struggled with the question you asked about where to invest capital to get the biggest impact. And the best answer I’ve come up with is…

It depends.

Different businesses have different needs. Let’s say a baker has a long line of customers waiting for her sourdough bread. She runs out of bread before she runs out of customers who want to buy it. The best place she can invest is in better production. She needs more bread. And she needs to serve her customers faster. But a second baker, who has the recipe for the best pies in the city, but very few customers, needs to invest in bringing in more people to try her pies. Her money will be better spent on advertising and better distribution. A third baker’s needs will be different.

There is no one place for all small businesses to invest for the best pay-off. Rather, business owners need to identify the number one thing that is holding their businesses back and invest there. Once that opportunity is fixed, they need to identify the next problem area and invest there.

Sean HigginsSean Higgins

Sean Higgins is Co-founder at ilos Videos, a video creation and training platform, works with customers during implementation and afterwards to find which solutions/improvements matter and which ones don’t. Making changes for the sake of making changes isn’t innovative; it’s crazy.

When it comes to investing or reinvesting capital, small business should…

Invest the most capital in the early days refining the product or service.

To make a bang in a market you don’t need to be the first one in it. Google was the 17th search engine. Why did they beat out the incumbents? They were better, over 10x better, helping their customer in a way that mattered.

Before you can deliver 10x value you need to invest in your product and in the team that makes it possible.

Nicholas J DelgadoNicholas J. Delgado

Nicholas J. Delgado is the Founder and Principal at Dignitas, a leading multi-family office, business advisory, and investment consulting firm serving entrepreneurs, with 15+ years of experience in the financial services and wealth advisory industry. In his role at Dignitas, Mr. Delgado regularly works with entrepreneurs and business executives on business planning and growth issues as both a coach and meeting facilitator. Mr. Delgado is a regular speaker on topics of such as business startups, financial strategy, capital advisory, succession planning and business acquisitions for closely held businesses.

The biggest bank for the buck for business capital comes from…

A solid understanding of the underlying returns in the different functions of an entrepreneur’s business.

For example, some software companies understand that their customer acquisition cost is a fraction of their customer lifetime value, so marketing is a great investment for excess cash. Alternatively, in some mature companies paying down a 6% term loan may provide the best yield for the business.

In the end, it pays for entrepreneurs to understand the various return opportunities within their business across functions.

James Robert WebbJames Robert Webb

James Robert Webb is a professional country artist who runs an indie record label and publishing company in Nashville, TN. Learn more about James and his work at

Obviously, reinvesting with cash on hand is way better than taking out a loan. In my experience, the single best place for a small business to reinvest their capital is…

To spend it brand building with marketing (simplify your website, hire a marketing rep, purchase print advertising, make an infomercial type video for youtube).

Since the slashing of section 179 deductions, its best to avoid spending cash on capital improvements (remodeling or purchasing an office, buying large equipment, etc) unless you just need to do that for growth. If you spend the money on that, you don’t get to deduct it right away (meaning you still have to pay taxes on it this year, then recoup over subsequent years). The higher the tax bracket, the worse the pain with capital expenses 🙂

Philippa BurgessPhilippa Burgess

Philippa Burgess owned a small business for 14 years which she sold and now provides contract marketing, PR and creative project management to select companies in Denver, CO. To learn more about Philippa, find her on Twitter @philippaburgess.

My advice for the best place for a small business to invest capital is…

In contract employees.

Let people come in to do the job they were born to do. This doesn’t mean that you have to only outsource the work, you can bring them under your umbrella and into your office, if you have the room for them. Let them bring you their best game at what they do incredibly well and are passionate about, and giving them the flexibility each week to do other work and projects in addition to yours.

This saves money on employee benefits, taxes and having to maintain a full-time salary. It also saves spending money you don’t need to when the task at hand requires focused attention in small bursts over a long period of time. Plus it frees up budget to give these professionals the budgets they need to acquire the tools, team or access they need to do the task most efficiently.

For example, you don’t necessarily need a marketing and PR person on your payroll 40 hours a week, but having them on your team 3-10 hours a week for a longer duration, of 1-3 years or more, helps them build relationships, credibility and a consistency in messaging. They also need specific crafts people to help them with various aspects of strategy, events, coding, design and writing who can also be brought in on an as needed basis to deliver very specific tasks. Plus having a budget for them to buy advertising, sponsorship and deliver campaigns will help them provide you with the most bang for the buck.

Alternatively you may need someone 40+ hours a week but then make it a finite contract so there is an understanding of very specific deliverables within that time frame. For example three or six months. Then you can mutually evaluate if you need to end, extend or renegotiate the agreement when the initial time frame is completed. You also are a lot less likely to have surprises that someone has just quit on you and there isn’t the pressure to have to think about firing people.

This way of working can apply to many necessary functions within an organization. Take a look at what roles within your company can be structured to embrace this type of employment structure. You just take the relationship in bite-sizable pieces that can regularly be mutually evaluated and tweaked. People with secondary passions from being available to their children more hours during the week, to being artists or entrepreneurs themselves will be loyal and appreciative of this model and there is no question, it will absolutely help your bottom line.

Bob WheelerBob Wheeler

Bob Wheeler, CPA is the CEO of Robert Wm. Wheeler, CPA, Inc. and Author of “The Money Nerve”.

Besides reinvesting capital into their company, in terms of computers, equipment or staffing, small business owners that are looking to make some return on investment would be best served in investing in…

Mutual funds.

Mutual funds give a better rate of return than savings accounts and have low risk. Small business owners tend to struggle with cash flow so investing in anything risky is not wise. Mutual funds are easily accessible if there are unforeseen cash needs.

Jack MartinJack Martin

Jack Martin is the Founder and CEO of, a leading source for specialized job postings and career advancement within New York City. has a social footprint of 17,000 and have been recently featured in publications ITworld and CIO.

The best place that we have found to invest capital is in…

Social networking.

On a shoe-string budget, was able to grow from zero to 17,000 followers in six weeks. This has had a huge influence on building our brand, gathering attention and maintaining traffic. The best bang for your buck comes from connecting with potential customers through modern branding and advertising.

Shel HorowitzShel Horowitz

Shel Horowitz is a Green Business Profitability Expert, consultant, copywriter, and author of eight books including category-bestselling “Guerrilla Marketing Goes Green: Winning Strategies to Improve Your Profits and Your Planet”. He also gives a popular business talk called “Making Green Sexy” and has been blogging since 2004 and using social media since 1995. Learn more about Shel and his work at

When it comes to the best ways to invest or reinvest capital for great returns, small business should consider investing in…

Energy efficiency improvements.

The Empire State Building got a 33%/year return–by investing $13MM in a deep energy retrofit and shaving $4.4 million per year off its energy bills.

Small businesses will find that well-planned, fast-payback energy efficiency improvements can pay for themselves very quickly, and at the same time boost both employee and customer loyalty by announcing the greening of the company. While most of us won’t do quite as well as the ESB–which was, after all, built at a time when nobody bothered thinking about energy efficiency at all–saving percentages in the teens and 20s are not unusual.

Jeremy SchaedlerJeremy Schaedler

Jeremy Schaedler is the Founder of Schaedler Insurance & Bonding Services, a Northern California based insurance agency specializing in contractors license bonds.

With the increasing use of technology and especially social media in the modern business world, we have found the best way to reinvest capital is in…

Improving and upgrading our technology.

The rewards of having a faster, safer website that is easy to use pays multiple dividends both in current revenue, and in staying ahead of the curve where some businesses become obsolete simply because they become too cumbersome for customers to work with over time.

Dr. Tim LynchDr. Tim Lynch

Dr. Tim Lynch is the Founder and CEO of Psychsoftpc, a US manufacturer of high performance computers with Gaming PC, Business Computer, supercomputer and Graphics Workstation models based in Quincy, MA. Psychsoftpc makes several models of their Psyborg Extreme Gamer PC high performance gaming computers from an entry level gaming pc to a top of the line gamer pc. Psychsoftpc also makes several models of the Psyborg Extreme Graphics Workstation featuring the NVidia Quadro FX workstation graphics card and the Psychlone Personal Supercomputer with Tesla technology. Psychsoftpc also offers the Psyborg Business Class PC, which brings gaming pc performance to the workplace. Dr. Lynch received his Ph.D. in Psychology of Computers and Intelligent Machines from Boston University.

Where should small business owners invest capital?

Technology upgrades.

If it’s been 3 to 5 years or more since they’ve upgraded or replaced their tech, it’s time to take a serious look at it. A lot as changed in that period and they are probably lagging behind.

There is a new Wifi standard 802.11AC which offers much faster more reliable throughput than 802.11N to take advantage of this, routers and wireless access points would have to be replaced. Computers are faster than ever and graphics are better. Getting new machines or upgrading old ones with newer GPUs to take advantage of newer software should be considered.

If they are still using computers with the Windows XP operating system, they are at extreme risk for viruses, hacking and security breaches since XP is no longer supported by Microsoft and is no longer being patched. These machines should be replaced as they are probably too underpowered to run Windows 7 or 8.1 software should then be updated to take advantage of a true 64 bit operating system and the performance and speed it brings.

Ian AronovichIan Aronovich

Ian Aronovich is the President and Co-Founder of, a site that compiles and provides information about government auctions of seized and surplus merchandise from all over the country.

In order to get the most bang for their buck, I believe that small business owners should invest their capital in…

Hiring the best people with the best work ethic and attitude and with particular skills that no one at the company has.

By carefully looking at your company’s aggregate strengths and analyzing if there are any skill gaps within your teams, you can find outstanding employees with qualifications and skills that are currently missing from your organization that will propel it forward by leaps and bounds.

John TurnerJohn Turner

John Turner is CEO of UsersThink, a tool that gives startups useful feedback on their landing pages.

The single best investment of capital, particularly if you’re a product based business, is...

Reinvesting your capital into the product.

I would expand the definition of product to include anything that a customer or user interacts with in the path to your product, so that includes website copy and customer service.

By doubling down on the quality of your product or service for the customers or users you already have, even if they are few in numbers, will help you grow sooner rather than later, as word of mouth will increase.

Daniel LieserDaniel Lieser

Daniel Lieser is Co-Founder & Business Development Manager of, a company that helps small businesses raise money from friends and family.

Small business owners, like anyone else, get so busy with their day-to-day  that they lose touch with the underlying problems faced by the business. When it comes to the best places to invest business capital, I would suggest…

That business owners directly ask the *lowest* level employees where they think the money would be best spent.

These lowly employees often have a much better sense of the problems faced by the customers/clients. Then, find some friendly customers/clients and *ask them directly for advice *on how they think you should invest or re-invest your revenue. Far from being unprofessional, it shows genuine interest in what the client thinks, as
well as implicitly compliments them for being so smart that you seek their

People *love* to give advice (much more than they like to receive it). If nothing else, this is a great excuse to ask your customers and your employees permission to tell you what they *really think* of the business.

George AthanGeorge Athan

George Athan is Chief Strategist for MindStorm Strategic Consulting, a NYC based boutique strategy management consulting firm. He is a business growth expert who has successfully consulted for hundreds of companies in over 50 industries, dramatically increasing sales, profits, and rapid overall growth.

The single best place to invest and reinvest capital in the business is in…

Sales and marketing.

Sales and marketing brings you the highest return on your investment. Creating demand and turning that demand into revenue directly impacts the top line growth of the company.

Conner GalwayConner Galway

Conner Galway is the Co-Founder of Junction Creative, a digital marketing agency based in Vancouver, BC, and several other growing companies.

I’ve just re-invested in one of my businesses, am about to launch another and am considering whether my third is worth sinking more money into. The most successful investments that I’ve made in my business has always

Hiring ahead of demand.

It’s quite simple, actually: I set aside three months of salary for a role that will make a significant impact to the capacity of my business, then hire that role for a probation. If the role creates more capacity or upside than it costs, then I make it permanent. If not, I cut bait and move on.

The most important thing to focus on is capacity and use of that capacity. Not organization, or marketing, sales or office space. All of those things are essential, but they only exist to increase your capacity and then fill it. When you hire great people ahead of demand, they will fill in the blanks – they’ll tell you what software they need, what advertising expenses are required, and any other non-people costs either with their words or their actions. Most importantly, when one unit of input can create anything more than one unit of output, then you win.

Rui CarreiraRui Carreira

Rui Carreira is the Founder of and an Internet Marketing professional who became the youngest marketing teacher at ISLA (Portuguese University).

One of the best investments small business owners can make is in…

Content for their blogs.

Google and all of the other major search engines are getting updated to a level where they have a knack to identify quality content and display it rather than picking up SEO optimized webposts instead.

As a result, hiring a freelance content writer can be one of the best investments you can make.

Adam FridmanAdam Fridman

Adam Fridman is the Founder of Chicago-based digital marketing company, Mabbly, and is also a contributing writer at Inc. Magazine.

The single best place small business owners should invest or re-invest capital to get the biggest bang for the buck for their business is…

Social media.

Often useful as a free resource, spending a little money on social media can help you make big splashes, especially in the early stages. Boosting a post you’ve shared either on Facebook or Twitter, will increase your reach and help you get in front of your target audience, and land big sales. The best part for the small business just getting started is that you can do all of this for just a few hundred well-allocated dollars a month.

Dan SelterDan Stelter

Dan Stelter is a Freelance writer based in Chicago and is on a personal mission to help businesses stomp out boring jargon and replace it with engaging copy that boosts sales. Learn more about Dan at

The best place for small business owners to reinvest, in my opinion, is…


You’ll either want to spend that money on learning how to differentiate from the competition, or on expanding the reach of your marketing. In regard to differentiation, it’s easier to get business in the door if you’ve truly mastered how you do things differently than your competition. And for reach, well that’s obvious.

The bottom line: it gets easier to make money, and you make more of it.

Brandon HowardBrandon Howard

Brandon Howard is a web designer, developer, marketer, problem solver, and most importantly an entrepreneur. He owns several online businesses providing a wide range of products and services in different industries both nationally and internationally. His current project is Toner Emporium, the leading supplier online for compatible laser toner. Brandon is always looking for new things to  benefit the open source web community as well as striving to find unique ways to help small and start-up businesses grow their online presence.

What is the single best place small business owners should invest or re-invest capital to get the biggest bang for the buck for their business?…

Obviously the best investment is going to be depended on the type of business, but my recommendation is to invest in search engine optimization (SEO) for your website.

The idea behind it is that SEO will not only yield the highest return when compared to other forms of marketing but it also increases the value of your business as a whole. When you have consistent leads coming in with low cost advertising like that your website alone can increase the value of your business when it comes time to sell it.

David BakkeDavid Bakke

David Bakke is a Small Business Expert at, a popular personal finance resource with the goal of spreading financial awareness to people young and old.  The site delves into topics ranging from budgeting, money management, and lifestyle to investing, retirement, and small business.

One of the best place to invest or reinvest capital in your small business to get the biggest bang for your buck is to do so for…


Likely you’ve been putting in some long hours to get your business where it is today, and bringing on a staff member or two can help lessen your load. That will allow you to focus on continuing to grow your operation even more, which will hopefully lead to increased profitability.

Daniel BradyDaniel Brady

Daniel Brady is CEO of Heavenly Hammocks, a local e-commerce retailer in Brisbane, Australia, and the founder of several other online businesses.

The most beneficial place small business owners should invest or re-invest capital, which is a tactic most businesses are not employing is…

Conversion rate optimization.

It is most easily applied to websites, since the data is easy to track. The basic concept is that you test the ideas that you think might make your business improve, e.g. changing from 1 product photo to 4 photos. The simplest way to do so is to show the first test variation to 50% of your visitors and the second variation to the other 50% using a testing tool such as Google Analytics Content Experiments. After collecting a statistically significant amount of data, you’ll know exactly which performs better. You keep the ‘winner’ and remove the ‘loser’. Repeat this process with your other ideas and your website will be constantly improving whichever metric you’re optimizing, maybe sales or leads.

The impact of this testing can be extremely significant. Consider a website who pays an average of $20 of advertising per sale, their profit per sale is $15 and their website conversion rate is 2%. If they optimized their website conversion rate to 3% (which is very achievable), their average advertising cost per sale is reduced to $12 and their profit per sale jumps to $23. Their profit has increased by 53%!

What does it cost? You could buy a good split testing book such as ‘You Should Test That’ and then do the testing yourself in Google Analytics for free, or you could employ a professional such as Conversion Rate Experts (no affiliation). If you employ a professional to optimize your whole website, you could compare the cost to re-designing your website, but this technique is more valuable than simply redesigning the website without optimizing it.

You can also use this technique for a physical business, but you’ll have to manually count sales (or whichever metric you choose). You could test each test variation for 1 week, but note that seasonality will bias your results if you are not careful. This is not an issue for websites since they can split visitors 50/50 every day.

About Direct Capital

Since 1993, Direct Capital has been helping small businesses access the capital they need. In that time, we’ve helped over 100,000 small businesses and we won’t stop there. From equipment financing to inventory and payroll loans, Direct Capital does it all. And what’s more – we make sure you can access that financing when you need it. For more information on who we are, what we do, and how we can help you grow your business, visit our website!

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  1. There’s some great tips in here. Thanks for including me in this awesome group. Love to help entrepreneurs grow. Growing a business is not for the faint of heart.

  2. Of course – we appreciate your input. And our goals are the same, we also like to see small businesses grow and succeed, helping any way we can along the way!

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