We take it for granted. One of the main goals of a business is making a profit. Right?
Answer this question: What makes a business more valuable? Is it profits, or growth? Or future prospects?
And then this question: Don’t you have a straight trade-off between profits and growth?
Assume you have money still in your bank account after you’ve booked costs and expenses.
Reinvesting profits really happens before the month is closed and that discretionary money is booked as profits. Once it’s down on the accounting statements as profits, it’s almost always going out of the company.
If you can, reinvest your profits before they become profits.