How Much Should We Reinvest?
When it's time to reinvest profit to make a business grow, what is a good number to start with?
QUESTION: Dusty has been approached with a business opportunity. He and his friend want to start a website that could bring in up to $15,000 in revenue a month. Dusty has heard Dave talk about how to reinvest profit to keep things going, and wonders what a good percentage is.
ANSWER: That depends completely on the business. There’s no set amount, you just tinker with it. You can either reinvest back into the business by investing money to grow the business, or is there any overhead that you could build an emergency fund to cover. In your case, take a small amount home, leave a lot in there and grow it.