ExecutiveChronicles.com | What New Businesses Should Be Spending Money On | New businesses usually have very limited funding, and properly deciding what to spend money on is a common issue for new business owners. There are some expenses that are absolutely required, while many others get written off as non-essential.
However, seeing at only 2 in 5 startups are profitable, it’s clearly important to strategically invest your money in areas that will pay off in the long run. It can be tempting to spend money in flashy areas, but there are some things many people don’t consider that can actually make the biggest impact on your company’s long-term success.
To help you decide what to invest in, we put together some of the most essential things to spend money on when starting a business.
Tools & Technology
Whether you’re starting a construction company or working in SAAS, having the right equipment is crucial to have a successful business long-term. Investing in quality equipment is a necessity to get your startup off the ground efficiently.
No matter the industry, having quality computers and phones is key to stay relevant in your industry. But be sure not to be drawn in by the newest and flashiest models without regard for the price—do some research, and determine what tools & tech will have the highest return on investment for your company.
Investing in a good accountant is an absolute necessity: you need someone who knows money to make money. An accountant can help you maximize your profits and offer advice when making important financial decisions. Additionally, they can help you avoid fines by carefully auditing your balance sheet and keeping track of things like company expenses vs revenue to ensure your financial plan is on track.
Spending on marketing is crucial for new businesses—although it can take a while to see the ROI, marketing is essential to build brand awareness and draw in customers in the long run. If you’re in a B2C industry, online marketing is especially important to raise awareness for your company online. In the digital age, people are more likely to search online for a product or service before purchasing, so having an online presence will greatly help increase your brand’s visibility.
A company can only be as good as the people who work for it. Hiring the best employees possible is an investment that will more than pay for itself in the long run. Beyond hard skills, finding employees who have the right attitude and are a good personality fit for your company is crucial to building a company with a positive, hardworking culture.
When hiring new employees, be sure to have your company’s long term plan in mind. See if the employee is likely to stay with the company, or is likely to jump ship quickly. You want to build a team that is dedicated to the company and can add value to your growing workforce.
Insurance is a necessary expense for all new businesses. Whether you’re spending on health insurance for your employees or disaster insurance for your office, having insurance is an absolute necessity to protect your company from liability or risk. Although spending money on quality, trustworthy employees are essential for your business to succeed, investing in fidelity bonds is worth considering to protect you and your clients from employee theft.
In order to make your business competitive, you need to differentiate yourself. By having a strong network, you set yourself apart from competitors in your client’s mind and make your company the premiere place for them to do business. The more connections you make, the more your new businesses will get external support, which can even help attract investors.
Additionally, networking can help attract more customers as they hear about you from word of mouth. Networking is a cost-effective way to build both your brand and your personal web of connections in the industry simultaneously.
Regardless of your business type or experience level, having a legal professional is always an important consideration. Without a legal professional, you are at a much higher legal risk of things like lawsuits. A legal advisor can help you review business contracts and protect you against legal action.
As a new business owner, you need to be smart about where you put your money. With limited resources, you can’t afford to spend money on things that will not generate a high ROI. Your resources are limited, and inefficiently allocating your money can have disastrous consequences long term.
From hiring the best employees to investing in a legal professional, it’s clear that there are some areas where spending money will benefit your company most in the long run. For a complete list of where to spend money as a new business owner, check out the infographic from JW Surety Bonds below.