5 Smart Ways to Use Your Tax Refund to Grow Your Small Business

Editor’s Note: This post was originally published in April 2019. 

Is your business getting a tax refund? If so, you’re probably daydreaming about all the things you can do with the money.

Sure, you can take a vacation or buy something fun you’ve had your eye on. After all, it’s nice to have a reward for all your hard work. 

However, if you own a company or have a side hustle, a tax refund is a great opportunity to invest in your business. Here are five business-minded ways you can put that money to good use.

1. Invest in new hardware and software

If you took a good look around your office space, what would you find? Is your laptop barely functioning? Is your printer permanently out of order? If your equipment is either extinct or living well beyond retirement age, you might want to take that refund and give yourself a hardware and software makeover.

If you’re handling personal data, you’ll want to make sure your security efforts are up to standard. Failing to do so can lead to a data breach or loss that threatens your business’s well-being. 

Keep in mind that cybercriminals actively exploit small businesses because they’re easier targets than larger companies. According to a Hiscox report, 59% of small and medium businesses experienced cyber attacks in 2025, including ransomware attacks and attacks related to AI vulnerabilities. If this happens to you, you could end up going out of business for several months or even permanently.

2. Increase your brand awareness

Take that refund and use it to increase your brand’s visibility. You can do this both physically and digitally. 

Invest some time and money into building your email list, growing your online presence and establishing a stronger local presence. Then see what a difference your efforts make. Here are a few projects you might start with:

Upgrade your website

Still running an ancient website? Create an innovative new site or upgrade your old so it’s ready for your future customers. 

If your home page takes more than two seconds to load, or if your website graphics are outdated, you could be losing customers. 

Is your budget for website upgrades limited? Consider hiring a college student who majors in graphic design to build or improve your site. Many will appreciate the opportunity to build their résumé.

Expand your industry connections

Bring more exposure to your company’s products or services by attending conferences, trade shows, or expositions. Prepare for a trade show by buying a table and having some shiny new marketing materials printed. Think business cards, brochures and posters.

Grow your online presence

Expand your marketing efforts on social media, or use your refund to hire someone who can do it for you. Every indicator out there shows that an expanded social media presence results in more traffic for a small business, whether the metrics measure website hits, ad response or sales numbers.

3. Invest in yourself

You are the face of your company. So it can be a worthwhile investment to spend some (or all!) of that refund on yourself. Here are a few initiatives to consider:

• Skills upgrade: Upgrade your skills by taking an industry-related course, either credit or non-credit, through continuing education. You can do this online or in person as your schedule allows.
• New credentials: If you’re in an industry where certifications are an asset, why not pursue a few more credentials to add to your resume or pursue a professional license that would benefit your company?
• Retirement savings: Start a retirement fund or add some money to an existing one. Being in business for yourself means there isn’t anyone else to sponsor or contribute to your retirement, so consider adding to your nest egg. As an added bonus, putting money into a retirement account can help you reduce your taxes.

4. Grow your inventory

Do you have enough inventory to satisfy your customers’ demand? If not, boosting your inventory can help you reduce back orders and other delays in providing good customer service. If you’re running your small business or side hustle from home and are limited in space, consider renting a storage unit to hold your new stock of inventory.

5. Build a product prototype

If you’ve been thinking about expanding your business to include new offerings, why not use your refund to build a prototype you’ve been envisioning? 

Once you have something tangible to show, you can turn to crowdfunding sites such as Kickstarter or GoFundMe to solicit consumer feedback or interest, and raise any additional capital you need. You may also want to work with a small business counselor to improve your credit scores so you can qualify for more business capital.