Every startup has to be smart with their money, but there are some areas of business that it does not pay to cut corners.
Many startups are born from sweat, hard work and the personal finances of their owners. Protecting every dollar from being wasted on unnecessary expenses at this vulnerable stage is among the most crucial of the responsibilities owners have while they are trying to help grow their small business.
Unfortunately, it isn’t always easy to know what the best service or asset is to spend money on for your particular industry. Trying to figure this out on your own dime can be very time consuming and expensive. If you aren’t careful, you could lose a tremendous amount of efficiency from making the wrong choices, which could significantly slow your growth or stop it altogether.
Fortunately, there are some sound decisions you can make early on to help put your business in a strong starting position.
5 Things Every Startup Should Spend Money On To Be Successful
1. Accountant/Tax Professionals
No matter what business you’re in, you are guaranteed to owe good ol’ Uncle Sam a piece of the earnings you make each year (possibly even each quarter). Hiring a professional to help you setup your business and assist you in choosing the type of business you want to structure yourself as could save you big on your taxes down the road.
2. Customer Service
Having a business that does sales without having a strong customer service strategy in place is like putting your hard earned money in a pocket that has a hole in it. However, when your company is just getting started, it may not make sense to hire a full time employee to manage your inbound calls while you focus on growth. An incredibly cost effective solution to this issue is to partner with a phone answering service that has friendly, highly trained virtual receptionists who can answer your calls 24/7. This can free you and your team up to manage sales, operations, and bigger picture tasks without compromising the quality of customer service that your callers deserve.
3. Networking Lunches
Many entrepreneurs get started with their business by chasing a dream all by themselves and willing it to success. The trouble is, very little inspiration happens in a vacuum. Collaborating with contacts in your industry, or even just sitting down with other business owners like yourself can bring out opportunities you would have never put together on your own. When you consider the opportunity costs, you begin to realize that going to lunch by yourself can actually be more expensive than inviting someone to bounce ideas off of while you both enjoy a meal.
There are a lot of technology and service solutions out there. Email, documents and calendar management are a few things you will need regardless of your industry. One of the most cost effective solutions out there is hooking yourself up with Google Apps for Work. You might be able to get away with using the free version, or even hodge-podging together some other free solutions to get similar functions. But just $5/month for a completely integrated suite of tools and the ability to use your own domain name in the email is well worth the investment.
Even though insurance is listed last, it is also one of the last things you want to try to skimp on when it comes to running your business. Spend some time going over business insurance policies and determine what kind of coverage will adequately safeguard the kind of activity you will be involved in. Shop around for quotes and talk to a few insurance agents to see what they recommend. Once you feel like you have a good idea of what is the right fit for you, go ahead get signed up.
Depending on your specific business, there could easily be other costs associated with getting your company up and running, but these five tips make sense for most startups. Getting advice from sources you trust is usually cheap or free, but in the end may still be worth what you paid for it. The key is to try to be as conscious as possible with every dollar you spend so you don’t wind up wishing you did things differently.