Guide to Investing Extra Business Cash in Mutual Funds

Assess your goals

First determine how much money you can invest. Remember, this money should not be touched for at least five years. Financial advisors say if you have less time than that, you shouldn't be in the market.

I recommend: To help you get started exploring mutual funds, check out the mutual fund sections in The Motley Fool, SmartMoney and Better Investing. Also check out this Merrill Lynch's primer, Investing Corporate Cash.

Research, research, research

Once you know what type of mutual fund suits your investment goals and philosophy, the hard part comes – choosing among the cornucopia of options. Every mutual fund has a prospectus, which won't be very entertaining, but very informative. It will spell out the fund's investment policies and objectives, risks, costs, historical performance data and more.

I recommend: To look at what some of the biggest players in the industry offer, review the fund offerings of Fidelity Investments, Schwab and T. Rowe Price.

Monitor your investment

You have a business to run so it's not feasible to surf the Internet every couple of hours to see how your investment is doing. That's probably not ideal for anyone. But you also don't want to make your investment and leave everything to Lady Luck.

I recommend: There are a number of places to help you monitor performance, such as Morningstar.