As a startup, knowing where to spend your money is difficult. There are almost limitless opportunities, but very few of them will actually generate a return.
According to Entrepreneur magazine, there are definitely some expenses you should avoid. These including buying expensive clothes just to massage your own ego, or buying a swanky downtown office, just so that you can keep up with the biggest companies in your industry.
But what should you be spending your money on? And could it help you make money in the long term? Let’s find out.
Market Research
Many companies jump into making something before they’ve found out whether or not there is any demand for their product in the market. They dump a load of money into their production processes without really knowing for sure whether what they’re making will become a hit. In other words, they take big risks unnecessarily.
Market research is a great place to spend money because, by doing it, you find out what people actually want. Once you know what they want, you can either go ahead with full production, cancel your plans, or change your product slightly before launching.
Outsourced IT
Thanks to the cloud, small businesses no longer have to pay out a small fortune on IT equipment. Instead, they can simply go to the cloud and get everything they need for a fraction of the price. Most businesses don’t even bother buying a printer and use managed print services instead. They’re simpler, cheaper and better for the environment.
These days, practically every application can be outsourced. What’s more, outsourced applications are regularly updated by their providers, meaning that there’s no need for businesses to waste time messing around, updating their own systems. It’s all done in the background for them, allowing them to get on with work.
Legal Advice
Filing taxes is one of the most time-consuming things that founder do when they try to do it on their own. Practically every business learns that the best way to do their accounts is to simply outsource it to a professional accounting company and pay a small premium. They can then use their precious time to get on with growing the business.
Buying Lunch For Your Superiors
You might think that buying lunch for people who are higher up than you in the business world would be a bad idea. But, according to the richest man in Asia, it’s essential. Why? Because it helps with networking and it means that the person you are courting is more likely to remember you and feel as if they owe you a favor back. Paying for lunch for a VIP can reap dividends, especially if you impress at the dinner table.
Customer Service
The final place to make sure that you’re spending your money is customer service. Customers don’t just want to be sold to: they want to be supported as they use your product. In other words, clients are looking for an experience from your company, rather than just a product in isolation. How you approach customer service, therefore, is very important.