It’s no secret that starting and running a small business is a challenge. In fact, it’s so tough that more than half of all small businesses fail within their first five years. Unfortunately, because of the high number of factors affecting businesses, pinpointing the cause of these failures can be difficult to do. That being said, more often than not, these failings have something to do with lack of money, which is why so many entrepreneurs try so hard to cut costs and save cash. However, eliminating unnecessary expenses doesn’t mean you should stop spending money altogether. Here are ten things your small business should be spending money on.
Marketing And Advertising
You could have the best service or product on the planet, but it means absolutely nothing unless people actually know who you are. When times are tough, many entrepreneurs cut back on marketing and advertising in an attempt to save money, but, ironically, this is exactly the time you need to start making investments. Marketing can be a tricky and time-consuming job, with lots of methods to try out, so consider outsourcing this task to a freelancer or marketing agency.
Graphic design is often believed to be a waste of money, so it’s an area in which many companies hugely underinvest. However, it’s important to remember that your logo is going to be on everything related to your business, including business cards, your website, and your smartphone application. Because of this, it’s crucial that it looks good and makes an impact. Unfortunately, unless you’re a graphic designer, it’s unlikely that you’ll be able to do this alone.
These days, it’s practically impossible for a business to survive unless they have a website. After all, when someone is looking to buy something, the first thing they tend to do is look that thing up online. If you don’t have a site, then no one will be able to find you. However, simply having a website isn’t enough. You also need to invest time and money into having it designed professionally, boosting its search engine optimization, and making it accessible to every device out there.
Technology And Equipment
Without technology, most of us would find it difficult to function day to day, and, unfortunately, the same is true when it comes to running a business. Unless you have the best technology possible, you will continue to waste time and money, and negatively impact your reputation. This, unfortunately, could cause permanent damage that could ruin you. Because of this, it’s important that you get the tech you need to run your business properly and pay to have it maintained.
Despite what some entrepreneurs believe, legal advice is far from an unnecessary expense. Even with years worth of experience, the legal side of business can be complicated to deal with, so it’s crucial that you have some professional help when you need it. Of course, you may not be able to afford an in-house lawyer, but that doesn’t stop you from building a relationship with a reputable law firm. They will be able to assist you whenever you need and ensure you stay legal.
Your employees are the glue that keeps your business together, so it’s vital that you spend some money on hiring the best staff you possibly can. This means spending a little extra on the hiring process, offering better benefits, and competitive pay. In some cases, you may even want to buy a service residence and host particularly skilled workers while they look for somewhere more permanent. Just make sure that you don’t start hiring too early, as this would be a costly mistake.
Once you have your team, you need to ensure that they are happy and stick with you. The hiring process isn’t cheap, so the last thing that you want is high staff turnover. Because of this, you need to do what you can to create a welcoming environment for your staff and make your company stand out. Of course, much of this work will be free, but there are a few things you will need to spend money on, like incentives and rewards for hard work and days out as a team.
Bookkeeping And Accounting
Unless you know a lot about accounting and managing money, you need to pay someone to handle your books. This could be someone you hire in-house, a freelancer, or an accounting agency. They will be able to deal with your taxes, ensure your employees are paid properly, and give you an idea of places you’re wasting money. This, of course, saves you time and energy, but also saves you some cash, and ensures that your business is as cost-efficient as it can be.
Disaster could strike at any moment, so it’s imperative that you have the right cover to protect you. All businesses require some sort of protection, but that doesn’t mean that you should only get the cover you’re required to have by law. Different companies face different dangers, so speak to an insurance expert and get some advice. Of course, you may go your entire career without ever needing this cover, but you’ll regret not having it if anything were ever to go wrong.
Paying yourself too much is an incredibly common mistake that entrepreneurs make, however, it’s just as dangerous to pay yourself too little. After all, you need to live, and if you don’t have the cash to do this, then you’ll likely end up borrowing from your business, which will only ever cause problems. Although you shouldn’t take money from your company to treat yourself, there are certain purchases you can justify, such as paying to attend a business course or conference.
Lack of cash is a common cause of business failure, but that doesn’t mean that you should cut out spending completely. In fact, there are many investments you need to make to be successful. That being said, you should always think purchases through before you make them and ensure that you’re making the right decision.