Spend money to make money: Essential investments for small businesses
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When you start a company from the ground up, your first instinct is to spend as little money as possible. You have limited funds at your disposal, and you need to stretch every penny as far as it will go.
It takes time for a business to become profitable. You have to find a customer base and work hard for a long while before your turnover finally exceeds your outgoings. Therefore, it’s understandable that you might be weighing up every single cost. Of course, some expenses are unavoidable: you can’t run a business without reliable computers, business insurance, and a comfortable office. But things like software, services, and other desirables you can live without often fall to the wayside.
But as the old saying goes, you have to spend money to make money. And there are several areas it is worthwhile putting your money into as an investment in the future of your business. These areas might seem like extravagant expenses to a cash-strapped entrepreneur, but if done right, they will end up making you far more money than you spend.
To help you realize this return on investment, here are some essential expenses for small businesses.
Accounting
When you have little money coming in, it’s easy enough to keep your financial records in a handy Excel spreadsheet. It keeps all your incomings and outgoings in a single document, that you can arrange in any way you like. It’s completely free and incredibly simple to use. But what happens when your business grows and your financial situation becomes vastly more complicated? If things go well you will have employees to pay, expenses to claim, and invoices to send to a myriad of high-profile clients. Eventually, that Excel spreadsheet will become a disorganized mess and it will be harder and harder to stay on top of the numbers. You could end up making costly mistakes or undercharging your customers. In the word case scenario, you could find yourself in court after inadvertently committing tax fraud.
For this reason, it is always worthwhile investing in a good accounting software package. This will only set you back a few dollars each month but it will ensure the accuracy and organization of your business accounts. Accounting software is scalable, so it grows with your business, and it will save you a huge amount of time to focus on the areas of the company that need your attention. If you struggle with your finances, it might also be a good idea to speak to a reputable accounting firm like HLB T&M Consulting.
Marketing
No matter how good your product or service may be, you will never be a successful business if no one has heard of you. Marketing is essential for raising brand awareness and putting more eyes on your business that will eventually turn into paying customers. Of course, you can do this without spending any money. Organic forms of marketing like social media, word of mouth, and SEO are all free to use. However, it takes time to build a digital presence this way. You don’t want to be spending all your valuable time scrolling through Twitter or writing endless blog articles. Outsourcing your marketing to a third party will pay dividends in the long term.