Donate to Science & Enterprise

S&E on Mastodon

S&E on LinkedIn

S&E on Flipboard

Please share Science & Enterprise

Spending Wisely as a Small Business

Counting money


17 Dec. 2018. When you are a small business, you have to pay attention to the dollars and cents. It all adds up, and in those first few months, and even years it can be razor’s edge margins. However, there some places that in the long term you will benefit from making those investments. It is hardly surprising that one of the leading killers of new businesses is cash flow, or rather the lack of it. As you start planning your cash, you would be wise to overestimate wherever possible, this will help you have a little bit of a buffer when you really need it. You will always spend more than you think, and here is where.

If you are planning on launching a business, the chances are you’ve been looking in many different places to raise the capital required to buy your initial things. If you need a brick and mortar store but can’t afford to put some cash up for rent, you’ve failed before you’ve begun. It doesn’t matter what your business is, what matters is you have the money to get it off the ground.

You might choose to go to a bank and get a loan, you might approach investors, or you might be lucky enough to have friends and family who are prepared to help you out. Once you have the money you need, it’s go time.

But where should that cash be going?

If you managed to get this far without a business plan, or even with a very basic one, it’s probably time to start talking to some professionals that can get your plan whipped into shape. It is a misconception that a business plan is simply a bit of paper for the banks – it is actually the blueprint for your next few years in business. It will hold all of the critical pieces of information for your company, cash flow, target market, it will even hold any possible weaknesses.

Marketing is something that very few businesses can get by without. While the internet has made this a lot cheaper, and more accessible to everyone, it’s never been more likely your advert will be missed with a quick scroll. The landscape for marketing is no longer flyers in a coffee shop. It is Facebook, Twitter, local businesses… and more. Marketing is what you will do to communicate who you are, what you do and what you can do for your audience.

Insurance. Most startups try to get by without this. Imagine if you are the owner of a business that runs from a brick and mortar store. A customer one-day trips in your store and decides to sue you. You realize that in haste to stack the shelves you didn’t bother getting the right cover, and now in the space of five minutes you have lost everything. Not the prettiest picture is it? Even n the early days you should speak to a specialist, and make sure that you keep those communication lines open throughout your journey. A little extra spend per month can keep you safe from going bankrupt and losing everything in the case of an accident.

Staff is one of those things you don’t think you need until you are trying to manage your social media account at 3am, and you also need to pack and ship all of your products out the next day. It can quickly turn from a one-person machine into a one person mess. Never underestimate the power of gig economy in this day and age.

If you do find yourself struggling you can hire a freelancer to take care of some things while you work on others. But, you’re going to either have the money to spot hire or be sure you’re going to have the money at the end of the month to pay the invoice. Either way, have something set aside for the moments that are a little hair-raising.

Accountants. You might think you’re good with numbers so you can take care of your accounts with ease. For a while that might work out too. But in the long run, an accountant will save more money for your business than they will cost. They know where the tax breaks are, where it is worth investing a bit of cash Having an accountant like will stop you getting into a financial muddle. A company like Brown Smith & Wallace can help out, no matter what stage in your business you are in.

The modern age is a delight to be able to browse all the amazing pieces of technology you can use in your business. In the end, most technology will help you run your business that little bit smoother. From apps that can help you keep track of your incomings and outgoings to getting yourself a laptop that can help you work on the go. There is no one set of technology that will help you meet the needs of your business, but you should be able to invest money in them when you need to.

Get the law on your side, by investing in a lawyer. When you decide what type of incorporation you’re going to use, you’re probably going to want to reach out to a lawyer and make sure you understand all of the implications of your decision. Once you start that initial relationship, it’s worth keeping. You will want to have someone who can go through the contract and has knowledge pertaining to your sector and state.

If you have already started your business, or maybe even a few months in, it is never too late to look at your spending and how you can make wiser choices. While the initial joy of a cash injection can feel like the moment everything can start, it can also be where everything gets more complicated. Spend wisely and prosper.

*     *     *

Comments are closed.