What to Invest in when Starting a Business
More people than ever are starting their own businesses. With the internet, it is relatively easy to get going – especially in a service-based industry – and market yourself to your target audience. Running a business is more viable and attractive than it has ever been, and modern attitudes towards entrepreneurship influence thousands of people to start their own businesses each year.
Generally speaking, new start-up businesses are cash-strapped, and if this is the case with you, then it is very important that the money you do have is invested in the right areas. Silly financial decisions can mean the difference between success and failure, and many new start-ups fall victim to their founders pumping money into the wrong things.
Here are five key areas you should be investing in when starting a business –
If you are launching a business which will be selling a physical product, you need to know that there is a market for your idea before you put money into producing it. Knowing what the market wants and that you have customers ready to buy your product is something you need to figure out straight away.
Virtually all start-ups will require some form of legal advice, however, this will largely depend on the industry in which you will be operating. Incorporating a business, drafting legal documents such as contracts and agreements, and ironing out liability issues are all things which need to be carried out by a certified legal professional.
Accounting & Finance
A good accountant who has experience within your industry can save you far more money than you will end up spending on their fees. Accountants help keep your finances in check, hold you accountable for your spending, secure investments and loans, and generally assist with the day-to-day operation of your new start-up.
You can’t find success as a new start-up without spending some of your money on marketing. If you don’t market your start-up’s brand, product or service, your potential customers are going to have a harder time finding out about it and, as a result, you will suffer from a slower growth rate and low sales. You should consult a marketing professional with experience in your industry, as this person will know the very best marketing channels to use and will be able to create the most effective strategy.
In your first few months, you should be spending as much time as possible focusing on your customers and clients, and less time worrying about technical problems such as server maintenance and keeping your website updated. You can hire freelance technical contractors to complete work for you on an as-and-when basis, meaning you only pay for the tech support you need and can continue focussing on what’s important.
Although every new start-up is unique and will have its own needs, the five examples above apply to virtually every kind of start-up business. By investing your money in the right areas from the outset, you will avoid financial problems which are faced by many new start-ups, where money has been improperly spent.
Some common areas where new start-ups slip up financially are –
· spending money on extravagant entertainment;
· taking on full-time staff too early;
· buying followers for their social media pages;
· a fancy office which far outweighs their needs;
· enterprise-level software and project management tools;
The best way to ensure you are only spending money in the right areas is to have an accountant on board with your start-up, preferably with industry experience, who can keep track of your finances and reign in spending where required.