Generally speaking, you’ll use a stock broker, also called a brokerage to make these transactions. Stock brokerages offer platforms that make it easy to do your trading. In exchange, they often charge commission fees or other trading fees.
Our guide to investing in stocks explains more.
You can find the right stock broker for your business in our guide to the best online stock brokers.
Spoiler: our favorite brokerage overall is TD Ameritrade. It’s got competitive pricing, a robust trading platform, and lots of educational information
Investing in the stock market isn’t necessarily the best idea for many small businesses.
To explain why, let’s talk about individual investing for a second. Part of the reason individuals invest is because of inflation. If you just keep your money in a bank account long term, you’ll end up essentially losing money because inflation will rise and the value of your money will drop. Even average stock market returns usually beat the inflation rate. In other words, individual investing can help you keep your value. And hey, you might end up making more money.
Part of the reason investing works well for individuals, though, is because they don’t have many other ways to make their money grow (or simply not deflate). Sure, you could use it to get more education, thereby increasing your earning potential. But most people, if they don’t invest, will just have money sitting in a bank account. So generally speaking, investing offers the best returns.
Businesses, though, have tons of things they can do with their money to increase their profitability. They can market their businesses more to get more customers. They can hire more employees to increase productivity. They can expand their locations to allow for more customers. They can buy more inventory―and so on. There’s a reason most businesses don’t just let large sums of money sit in a business bank account.
In other words, the money you would put into the stock market can be better spent investing in your own business. (And that’s not even getting into the financial risk the stock market poses.)
Of course, that’s not always true. We defer to your own expertise when it comes to your business. But you should think carefully before you start spending business funds on a stock exchange.