4 Things Your Small Business Needs to Spend More Money On
There’s no shortage on expenses when it comes to running a small business, but there are few things that should take priority.
Starting a business is an investment that exerts more than just your professional engagement. Young entrepreneurs have to invest themselves emotionally and more importantly – financially. With that said it is important to understand the survival rate your small businesses stands against. In the U.S. more than 50% of small business owners have to close their doors during the first 5 years of their existence. That is a grim statistic that can be tackled by investing into areas that often get overlooked.
Developing a successful business requires you to make the smallest amount of mistakes in an environment where one is lurking at every corner. The statistic I’ve mentioned is closely connected with this fact. Another factor that should be highlighted as a destroyer of small businesses is a lack of initial capital that is essentially the investment fund. If you end up underinvesting, which most businesses do, you increase the likelihood of falling through.
With that said, below I will list four areas most businesses could invest in to further their opportunities in today’s competitive market.
1. Tight business plan
If you ask most successful businesses on what they did in order to succeed, most will say that you have to have a strong sense of direction and poise in order to position yourself on the market. In short, you need an air-tight business plan before even starting. If you have a degree in Business Administrative that can definitely help you out, otherwise some outside help will go a long way.
There are some templates out there that can lay the groundwork for you, however for some fine tuning a deeper understanding of the matter is required. This is one of those things where you have to weigh the importance of each step you are making and how much detail you need to create around it in order to ensure it will work properly.
SBA.gov recommends that a business plan includes;
- Executive summary – a snapshot of your business.
- Company description – describes what you do.
- Market analysis – research on your industry, market, and competitors.
- Organization and management – your business and management structure.
- Service or product – the products or services you’re offering.
- Marketing and sales – how you’ll market your business and your sales strategy.
- Funding request – how much money you’ll need for next 3 to 5 years.
- Financial projections – supply information like balance sheets.
- Appendix- an optional section that includes résumés and permits.
Writing a solid business plan isn’t going to happen in 5 to 10 minutes with an online tool, you should definitely check out this Entrepreneur article that will guide you through the proper steps:
Just keep in mind that most respectable plans are developed for at least six months, so it’s not a fast process.
For more information, like how much funding you’ll need before applying for a small business loan (that’s 30 percent), check out the infographic below.
2. Marketing Presence
Reaching customers and converting it to revenue is probably the toughest thing to do if you are an emerging business. Unless you have found an opening in the demand for something you can quickly deliver, you will have to compete with others for the spotlight. This is a serious endeavor that requires a concrete plan with well-allocated funds. If you are inexperienced or lack the drive to invest yourself in a marketing campaign, it is strongly recommended that you find dedicated people that can drive it forward.
There is nothing worse than investing money into something you cannot deliver on a good enough level. Understanding the importance of your target audience, the analysis of their patterns and how you can approach that in a coherent manner is a tall task. Alone or otherwise, paying attention to these matters is critical to make your business grow.
Here are some resources that can help you get on the right path with your marketing presence:
• Startup Website Ideas to Make Sure You Reach the Right Website Audiences
• Online Tactics That Will Engage and Entice Your Target Audience
• How to Nurture an Email and Facebook Lead into a Sale
• SEO Guide: The Right Approach to SEO in 2018
Getting your papers sorted is a thing of necessity if you are going to become a legitimate business. Many new entrepreneurs dismiss this at the beginning of their work, claiming it can be done once the business is smoothly running. This is a mistake that can end up costing you tenfold in case a legal complication occurs. Copyright laws, legal obligations and protection is necessary that you don’t get behind on your plans due to something that is easily avoidable.
Consider getting a dedicated lawyer to go through your paperwork and ensure getting everything according to the book. I know it sounds tedious and distracting from the “important” part of the business but without this part you put yourself in a position to be exploited and nobody likes that.
Legal concerns are probably the single most overlooked issue that small business face. Unfortunately, they can also be the most critical and you won’t know how critical until one arises. Here are some common examples of items you’ll probably want an attorney’s help to get squared away:
• Choosing the right business structure from the start.
• Defining business relationships ie: owner shares, employees, etc.
• Buy Sell Agreements (don’t put this off).
• Legal Contracts
This one is closely tied with marketing for a reason, it is the meat of your pitch. What is your product? How do you emphasize its strengths? In what way do you present that to your audience? Those are all answerable questions if you look into the product and how it will impact the consumer. A lot of starting businesses consider going for bland or straight awful choices when presenting themselves. The mentality that your product is going to deliver on its own merits is faulty because you have to pick up the user base in the first place.
If you are inexperienced in branding, setting up a functional website and packaging everything for presentable sales campaign, you should consider hiring someone. Experienced software development companies exist for this exact reason. Managing fonts, color patters, technological compatibility and marketing messages is strenuous and requires a focused mind. Investing more funds into this aspect is always a plus.
Graphic design plays a huge role in your marketing plan ranging from message delivery to user experience. Click Here to learn how to use graphic design in marketing.
As mentioned in at the beginning of this post, make sure you are making the least amount of mistakes. Some are unavoidable, but making sure ones that are preventable are eliminated is the biggest key to success. Don’t let your business crumble because you thought the matter is settled – think over things once more.