Owning your own business means finding out everything costs a lot of money. You’re bombarded with emails, ads, and sales reps wanting to lay hands on your hard-earned cash.
When everyone’s trying to get you to open your wallet, it can be tough to know which expenses are actually worth it. The solution? Focus on investments that will make a difference to your business’s bottom line — whether it be by enhancing productivity, cutting costs, or avoiding risks.
They may cost money, but these seven expenses are worth it for small businesses:
1. Analytics software
Don’t guess whether your company is on track to achieve its goals; measure it. Until you put hard numbers to areas like sales, marketing, and product development, you won’t truly know what’s working.
Data science tools exist for everything from SEO to social media management. Prioritize areas for analysis, and choose tools based on a few factors:
- Features: Does the tool do what you need it to do? Even a cheap solution is a bad investment if it doesn’t address a need.
- Price: Can you afford the tool? Most SaaS tools are billed monthly. If the package you truly want is out of reach, ask yourself whether a basic edition would work.
- Usability: Software is useless if it isn’t used. Get feedback from team members who will use the tool before buying in.
- Support: If you run into issues with the software, will the provider help you solve them?
2. Office technology
Updated technology is secure technology. And because new computers tend to be faster and easier to use, they can also boost your team’s productivity.
Don’t skimp if you know your team needs a certain type of computer. Most creative software is made for Apple products, for example. Buying Windows machines for your designers could force them to spend hours per week dealing with bugs.
New computers are expensive, of course. Trade in your Mac or other Apple products to offset the cost. Small businesses don’t have a ton of extra money lying around, but investing in high-quality technology can be worth it if it helps the company run more efficiently.
3. A small business attorney
For many small businesses, the end of the road is but one lawsuit away. Don’t take the risk.
Although you can find templated legal documents online to use, they’re no substitute for professional legal advice. If you hire a business lawyer before you have legal issues, that person can get to know you and your business, steer you away from potential hazards, and immediately jump in when a problem arises.
Entrepreneurs juggle a zillion things, so glossing over the idea of adequate legal representation before a crisis is a common, but fatal, mistake. You’ll want to choose someone who’s familiar with your industry and experienced with the type of contracts you regularly draft. Keep in mind that business attorneys can also help you negotiate a fair price when you want to acquire another company or sell part of yours.
4. A certified public accountant
After payroll, taxes and business insurance are some of a small business’s greatest costs. First-time entrepreneurs, in particular, can find clarity by hiring a CPA.
Many small business owners lose thousands of dollars each year by doing their taxes themselves. Aside from delivering tax savings, CPAs also provide representation and audit protection in case the IRS comes knocking. Professional financial advice, at the very least, is worth the cost of working with a CPA.
A surprisingly large number of small business leaders assume that, simply because their doors are open, customers will show up. But no matter how valuable the company’s products or services are, consumers have to know about them in order to buy them.
Be sure you have a competent marketing agency or a thorough in-house plan before you start spending. Do your research and think creatively: What channels do your customers pay attention to? Where might your products or services stand out? Newsletters, organic content marketing, reduced-rate radio spots, and word-of-mouth marketing are all inexpensive options.
6. Quality contractors
Labor costs take a bigger bite out of most small businesses’ budgets than any other category. Salary, bonuses, commission, benefits, profit sharing, and other human resources functions are costly.
Given those costs, it’s crucial to hire people who are not only aligned with your business goals, but who also have a strong work ethic. If full-time employees are too expense, consider contractors, which can save a company around 30% on labor costs.
Think, too, about what can be automated. Things like email marketing, payroll, and invoicing can all be automated to some degree, allowing you to spend more time on your core business.
7. Tech support
Small business owners are used to doing it all themselves. Unless you’re a tech genius, it’s wise to outsource your data storage and security needs to the professionals. Mistakes in these areas can be catastrophic.
You should have constant access to your documents. Customers should be able to find your company online 24/7. Chatbots offer an always-on customer support solution.
Although frugality is important in the small business space, certain expenses are well worth the cost. Use your resources wisely, and you’ll thrive today — and long into the future.