Does Being Tight With Your Money Pay Off When You’re Starting A New Business?
It’s no big secret: everyone tells you to spend as little as possible when you start a new business. After all, you want to make sure that your new enterprise can grow and not get into any financial trouble! There are plenty of guides on the Internet that tell you how can you be savvier with your money during those crucial early stages.
Today’s article isn’t going to be another “x ways to save money when starting a new business” or “how to keep your startup costs down.” Instead, I’m going to play devil’s advocate and explain why being tight with your business finances isn’t always a good idea! Intrigued? Keep reading to find out more:
Sometimes you just need to spend money to make money
The idea of saving a wedge by running your new startup from your living room might seem welcoming to most people. But, there will be occasions where it’s important to spend some money to guarantee a return on your investment.
For example, let’s say you wish to start a business repairing laptop computers. Aside from the obvious hand tools you’ll need for repairs, you will also need to invest in board-level repair and test equipment.
You can’t do everything yourself
As a new business owner, you will no doubt have many “hats” to wear. In other words, you’ll have to cover several roles in your business that you’d usually assign to other people.
I’m afraid the reality of it all is that you can’t do everything in your startup yourself. There will undoubtedly be times where you need help with some things. Plus, it’s unlikely you will be an expert in everything – regardless of how quick you are to pick up new skills!
The good news is that you can outsource some business tasks. For instance, if you jump on the www.infotech.co.uk website, you can have an IT company like them take care of any computer conundrums. You could even outsource things like design tasks to freelancers if you’re planning a new marketing campaign, for example.
Rapid growth could spell disaster for your startup
You may think it unlikely, but some startups experience an extraordinary rate of growth! Sometimes it could be a case of being in the right place at the right time. Or they might offer something new to the market that is just what people are looking for!
If you’re the only person in your business, could you handle unprecedented growth? Chances are, the answer is most likely “no”!
However, if you spend some money on hiring at least one employee, business expansion won’t have to be at the cost of quality of service. You can delegate some tasks to your employee while you set about hiring more staff to cover other roles.
You may need to spend money to keep your business legal
One final point I’d like to make is about compliance. Many startups need to hire accountants to take care of their books. That means there is less chance of financial penalties coming their way from the government for failing to disclose income or not paying enough tax, for example.
Another example is licensing. If you’re a food vendor, you’ll need to obtain the right licences from your local authority. Otherwise, you could be breaking the law and, in extreme cases, face a spell in jail! Don’t believe me? Take a look at www.gov.uk to see what could happen to an unlicensed food vendor!
Of course, it’s not just food businesses that may need the right licences and permits. It applies to other sectors such as waste management and the hospitality industry.
I hope today’s blog post has given you some food for thought when working out what you need to spend for your new startup.