Should You Reinvest In Your Business Or Invest Elsewhere? A Strategic CPA Perspective

Featuring insights from Brett Redd, Linked Wealth Advisors

Introduction: Where Should the Next Dollar Go?

As a business owner, one of the most important financial decisions you’ll make isn’t about taxes or bookkeeping.

It’s this:

Where should the next dollar go?

Should you reinvest it back into your business—or pull it out and invest it elsewhere?

As part of our Strategic Partner Series at FJ & Associates, we sat down with Brett Redd of Linked Wealth Advisors to break down how business owners should think about this decision.

And the answer isn’t as simple as “diversify.”

Why Your Business May Be Your Highest-Return Investment

Traditional investments—stocks, bonds, market portfolios—typically generate returns in the range of 7–9% over time.

But your business?

It often tells a very different story.

“You’re looking at 7 to 9 percent returns… but inside your business you might be seeing 20, 30, even 40 percent.” — Brett Redd

That gap matters.

When you reinvest in your business, you’re not just hoping for growth—you’re actively driving it.

Reinvestment can lead to:

Increased revenue
Expanded capacity
Stronger systems and processes
Higher long-term business valuation

Unlike passive investments, your business gives you control over the outcome.

The Problem With Generic “Diversification” Advice

Most traditional financial advice pushes diversification.

And in many cases, that’s good advice.

But for growing business owners, blindly following that rule can actually slow momentum.

“It might be the very best thing for you right now to invest in your business.” — Brett Redd

If your business is in a growth phase, pulling money out too early can:

Limit expansion
Delay hiring or scaling
Reduce long-term valuation

The reality:

Timing matters more than the investment type.

When Reinvesting in Your Business Makes Sense

Reinvesting is typically the right move when your business is in a growth phase.

That includes when you are:

Expanding your team
Increasing production or service capacity
Entering new markets
Investing in systems or automation
Building toward a future exit

In these moments, your internal return on investment may significantly outperform external options.

When It Makes Sense to Diversify

There are times when pulling money out of the business is the smarter move.

Typically, that happens when:

Your business has reached stable profitability
Growth has plateaued
You’re overexposed to a single income source
You’re preparing for long-term wealth preservation

At that stage, diversification becomes less about growth—and more about risk management and stability.

A Real Example: Growth vs. Diversification

We worked with a business owner in Northern Utah who was generating strong returns within their company.

They were considering pulling money out to invest in traditional assets because it felt “safer.”

After reviewing the numbers, it was clear:

Their business was significantly outperforming those alternatives.

Instead of diversifying too early, they chose to reinvest.

Over the next two years:

Revenue increased
Operations scaled
Profitability improved
Business value significantly increased

The result wasn’t just higher returns—it was accelerated growth.

How a CPA Helps You Make This Decision

This isn’t just an investment decision—it’s a financial strategy decision.

At FJ & Associates, we help business owners evaluate:

True return on equity within the business
Cash flow and reinvestment capacity
Tax implications of distributions vs reinvestment
Long-term exit and wealth strategies

This is where most business owners get it wrong—they separate tax strategy from investment decisions.

They shouldn’t be.

Everything should work together.

How FJ & Associates Supports Business Owners

As a virtual-first CPA and advisory firm, we work with business owners across Utah and beyond to make smarter financial decisions in real time.

Our approach includes:

Ongoing advisory (not just year-end tax work)
Cash flow and profitability analysis
Strategic tax planning
Business growth and exit planning

Whether you’re trying to decide how much to reinvest or when to start diversifying, the goal is simple:

Make sure your money is working where it has the highest impact.

Key Takeaways

Your business is often your highest-return investment
Diversification isn’t always the right move—especially during growth
Timing matters more than the investment itself
Strategic decisions should align with both tax and financial goals
The right approach changes as your business evolves

FAQs

Should I always reinvest profits back into my business?

No. It depends on your growth stage, profitability, and long-term goals.

How much should I reinvest in my business?

It varies, but the decision should be based on ROI, cash flow, and future growth opportunities.

When should I start investing outside my business?

Typically once your business reaches stable profitability and key growth phases are complete.

Is it risky to keep too much money in my business?

Yes. Over time, lack of diversification can increase financial risk.

Can a CPA help with investment decisions?

Yes. A CPA helps you evaluate financial impact, tax strategy, and long-term planning.

Work With FJ & Associates

If you’re asking:

“Should I reinvest profits or take distributions?”
“How do I balance growth vs stability?”
“What’s the most tax-efficient way to build wealth?”

That’s exactly where we come in.

We help business owners make decisions that align with both growth and long-term financial security.

Author Bio

Missy Dennis, CPA

Partner | FJ & Associates, PLLC

Missy Dennis is a Certified Public Accountant with over 20 years of experience helping business owners navigate complex financial decisions.

She specializes in:

Tax strategy and planning
Business advisory
Bookkeeping system alignment
Estate and trust taxation
Nonprofit and housing compliance

Missy is known for delivering clear, actionable guidance that helps clients make confident financial decisions.