This is a guest post for the MELD Coworking blog written by Eric Weisbrot.
Working and spending more time at home leaves a lot of room to work on building the roots of your business. Figuring out your offer, target market, mission statement, and vision statement are all crucial to building the foundation of your company. One major decision you’ll need to make is where you will first invest your money.
Picking what to spend on can set your business up for success or failure. Failory finds that about 90 percent of startups fail and a recent analysis by the U.S. Small Business Administration found that cash flow issues are the main reason why businesses close.
Below, we’ll highlight some of the top things you should spend money on when starting a business.
1. Market Research
Understanding who you’re selling to is the key way you’re going to turn a profit. If you don’t know what your customer’s problems are, what solutions they need, what price point works best for them and other key metrics, then you’re likely going to start out on the wrong foot.
Selling a product or service that no one wants or needs can spell early failure for your business. Investing in solid market research takes out the guesswork and gives you data to work with when you’re developing your service or product.
Depending on what type of business you’re building, you might not need employees right off the gate. However, hiring the right team can make or break your business. The right people depend on a mix of criteria like their hard and soft skills, culture fit, work ethic, and more. You should focus on employees that fill in the gaps that you can’t fill yourself.
3. Technology and Equipment
Your laptop and Google Sheets can only take your team so far. You’ll likely need to upgrade your equipment and your tech to keep up your productivity. This could be as simple as buying premium browser extensions to buying sophisticated email software to upgrade your sales and marketing efforts.
Crafting a strong, coherent brand from the beginning makes it easier for customers to recognize your business and any related services and products. Getting your company and your team on the same page with big things like brand tone and messaging ensures that no one is sending mixed signals when chatting with customers or potential investors.
Establishing the nitty-gritty like fonts, brand colors and imagery are ways to visually solidify your company’s brand. Good branding is also a way to stand out from the rest of your competitors.
5. Finance and Accounting
Balancing the books isn’t the most fun thing to talk about, but it’s especially important if you want to keep your ducks in a row and your cash flow away from the red as much as possible. Getting a team member on board who’s well-versed in business finances and accounting can advise you on the best investments and keep an extra eye on your business’s financial stature.
6. Tax Professionals
Taxes are one thing that can catch new business owners off guard. If you haven’t spent the time to properly track your expenses and other financial activity, it can take you a long time to get everything squared away. Hiring a tax pro can save you the time of doing it yourself and gives you their expertise to help with tricky things like tax deductions.
7. Legal Help
Professional legal advice is helpful for businesses that are starting out since there are a lot of things you’ll need to navigate. A business lawyer can review business contracts and write your contracts on your behalf to ensure you have everything properly laid out.
They can also advise you when other legal issues arise. For example, if an employee raises concerns about unfair treatment or a customer brings a lawsuit out the blue.
Insurance can get pricey, but it’s worth it in the long run to protect you and your business from a number of risks. For example, renter’s insurance can protect your office space in case of natural disasters or other damages. Employee dishonesty coverage protects your business if an employee commits fraud or embezzlement.
The relationships you build on behalf of your business can help in so many ways. The person who invites you for coffee could be your next investor and the freelance digital marketer you bump into at your coworking space could end up heading your marketing department.
You’ll never know who you meet. Even if every meeting doesn’t result in a new partnership, it’ll always increase your potential pool of customers.
10. Customer Service
Customer service is important as the real face of your business. This team works directly with your customers and impacts how customers feel about your brand and impacts your ability to retain customers. Investing in great branding, marketing, and tools means nothing if your customer service team isn’t great at serving customers.
Investing in marketing is the way you can expand your reach and drive sales. There are a lot of ways you can begin promoting your business that can build brand awareness and attract new customers.
Things like updating your Yelp and other review profiles, building out a social media strategy, and building your website are a few ways you can start constructing your marketing strategy.
Now that you’ve learned about the top things you should invest in, take a look at this infographic below to see what all 11 things you should spend money on when starting a business. If you want more tips to start your business, check out our guide on how to entrepreneur.
About the Author
Eric is the Chief Marketing Officer of JW Surety Bonds. With years of experience in the surety industry, he is also a contributing author to the surety bond blog. He has held a range of different roles within the surety industry, from agent assistant to bond issuer, which gives him a unique insider perspective on surety related topics.