The entrepreneur's dilemma: When to invest your money or REINVEST in your business

PL

Paula Luckhoff

21 October 2025 | 19:16

Galileo Capital's Warren Ingram explains how business owners can balance growing their company with securing their personal finances.

The entrepreneur's dilemma: When to invest your money or REINVEST in your business

Worry, concern, worried middle aged man looking at computer, 123rf.com

If you're an entrepreneur, you've probably found yourself eating, sleeping and breathing your business, at least at the beginning.

But there is a built-in dilemma here: How do you separate your finances - when do you invest your money, and when do you reinvest it in your company?

As personal finance expert Warren Ingram says, every rand you take home is a rand you're not investing back into your business growth. 

'But if you never pay yourself, what's the point?', he asks. 

As Ingram points out, when you do financial planning for yourself it is natural to plan according to your own life stages, and there are big parallels with a business.

It is necessary to break this part of your life into stages as well, he says.

1. SURVIVAL PHASE
In the early (survival) stages of your business, it makes sense to reinvest as much of your capital as possible as you need to give the venture the best chance of survival.
This can last longer than you planned - ensure that you have no personal debt and that your financial obligations are as small as possible. This gives you time and financial space to make long-term business decisions without the pressure of repaying a home loan or credit card.
Remember: You're unlikely to have much spare money in the business, so there will be little opportunity to earn a decent income.
2. ESTABLISHED STAGE
Once you're past survival, the financial decisions become very different.
Business growth is excellent at this stage, probably much faster than growth in the stock market in a normal year, which makes it tempting to keep all your money in the business.
This is the time to start paying yourself a market-related salary. 
The aim is to restart your retirement savings and to ensure that you begin normal financial planning again, like medical aid and emergency fund.
3. MATURE STAGE
Once your business is running itself and you've reached a sustainable size, it makes sense to reconsider your financial planning goals.
Your business might be your biggest asset - what happens if it fails?
This is the time to begin building your investment assets outside of the business to de-risk your financial position.
The trade-off is not about allocating money to the fastest-growing asset but rather to protect against unforeseen circumstances.
Allocate enough money to investment assets to protect yourself if something goes wrong in the business.
4. EXIT STAGE
Even if you want to remain in the business as you get older and continue working without retiring, you need to plan for the change of ownership.
Who takes over the management from you?
What happens to ownership? Does it remain in your family, or do they sell it?
Is the business ready to be sold, or do you need to do some work to make it showroom condition?

Scroll up to the audio player to listen to Ingram's detailed advice

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