Roll over your profits. This is a key strategy for building business market value. Develop a healthy, robust business investment plan. Companies thrive when a solid business investment plan is operational. The most direct source of potential business investment is company profits.

Roll over business earnings directly into a clearly defined investment plan. It’s a simple way to start and build a productive business investment function, and increase value. Guidelines, strategies and implementation are helpful for getting started. AB Financial Group works with companies just like yours to roll over profit and build a business investment strategy that increases revenue and company value.

Guidelines for Business Investments

Begin with guidelines. Business investment guidelines serve to keep the investment manager, oftentimes the owner, focused on the investment strategy. A sole proprietor will benefit from a simple, self-accountable policy. Larger business models require a formal written business investment policy, to serve as a resource for stakeholders. It provides accountability for the benefit of company members, shareholders and partners, and is a finance and accounting best practice. An investment policy is intended to define the strategies, implementations, goals, and controls of managing ongoing business investments.

A policy will involve the establishment of a process for approving specific investments. A prescribed review process answering questions including investment interface, expected cost, anticipated returns, type of investment, tax impact, risk, values alignment and limitations are potential review questions for companies in order to qualify specific investment instruments.

Take the long-view, often 5 years, to frame a quality approval process within the policy. Assignment of final approval responsibility is important, as is the designation of monitoring responsibilities, and what action-steps are expected for monitoring performance over the term.

Coupled with an established approval process, a well guided business investment plan includes objectives. The objectives, or goals need to be clearly defined. Like any investment, business investment objectives will align with three universal investment factors:

  • Safety – acceptable risk
  • Income – expected gains
  • Capital – asset liquidation

The unique characteristics of an individual business investment plan reside in, among other characteristics, the balance among all three investment factors. AB Financial Group works closely with businesses to develop policy and objectives in order to determine an optimal business investment plan.

Objectives and Strategies

Identifying business investment objectives is necessary to refine an investment strategy. Examples of objectives to consider:

  • Create income via interest-paying bonds or dividend-paying stocks,
  • Grow an investment by selecting high-growth stocks expected to rise
  • Choose the proper level of risk with safe investment instruments.

Objectives inform the investment strategies. The strategies will then be supported by the how-tos for investing. Consider frequency. What investment moves are possible on a monthly, quarterly and annual basis? Regarding safety, what level of risk is tolerable? This determination will direct apportionment of funds into either more risky high-yield instruments, or safer low-yield earnings instruments, to the appropriate risk level defined by the strategy. An annual, or semi-annual review of the capital position (real estate, equipment, inventory, cash on hand, etc.) as well as a review of the business’s debt ratio, including equity and debt instruments, is a component to fill out a business investment policy.

Rolling over profit into the investment plan is the best first step. A ratio of 20% liquid cash, 20% bonds, for safety, and 60% for higher yield is a good place to start. The investment policy should represent the company tolerance for risk, its values, and the company short and long term goals. AB Financial Group has the expertise and experience to assist you in all of your investment strategy requirements.


After building the foundation and getting started, persistent monitoring and exceptional agility will be required. Staying ahead of evolving cash requirements is important. Companies that have a professional accounting and finance function in place are positioned for a real-time snapshot of cash-on-hand, as well as the entire financial picture, whenever it is needed. AB Financial Group provides these services for businesses across multiple sectors, and can show you how. Ongoing reevaluation of risk requirements and long-term company goals will also inform the quality and performance of their business investment plan.

Ultimately, the monitoring implementation will include a business investment exit strategy. What is the criteria for ending one investment, and rolling over into another? What is the process for migrating to a more attractive investment? Develop a clear map for reinvestment that can include a pre-approval process, and identify a viable contingency plan. What new instruments meet evolving requirements? If safety, income and return benchmarks are not met, what is the process for course correction? At a minimum, a semi-annual review of the business investment plan performance may be sufficient for keeping the business investment plan robust, healthy and on track.

AB Financial Group can help. We partner with companies to develop, implement and monitor a solid investment plan. Build company equity with our help, and have access to our many business accounting and finance services as well. Let us show you how to successfully roll over your profit margin and maximize your company valuation. Contact AB Financial Group today.

All Colorado locations, including Edwards, Denver and Colorado Springs can be reached at (970) 444-5586.

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