Having good cash flow is great for a small business, but where you spend your capital is critical to your business’ success. Spend on the wrong things, and you could be looking at a quick failure. Spend on the right things, and you’re on the road to profit and success. Here are 6 key areas where you should put your capital toward:
1. Marketing and Discovery
Simply making a website and creating a product or service will not draw people to your business. There’s too much competing for your customers’ time and attention. Not investing in marketing can dooms your product or service to obscurity.
Don’t limit your outlay on advertisements either. Researching your customer base also takes resources, as well as product development that will make your product desirable to your target audience.
2. Legal Support
It doesn’t matter how small your business is – no business is too small to suffer from a legal setback. While legal advice tends to be expensive, it’s also what keeps your company safe. Research your options for area associations that have legal assistance as part of their membership offering. This can be especially helpful for employment law issues.
3. Accountants
How you handle your money can easily spell the future of your company. Managing your own accounting yourself is like representing yourself in a courtroom. Even if you’re trained for it, it’s not a great idea.
There’s enough for you to do without getting bogged down by accounting. Hiring an accounting firm or service will not just leave you free to focus on growing your business, it will make sure that someone up-to-date on the current laws and practices is studying your expenditures. Improper capital management can lead to numerous inefficiencies and waste that can cripple a business.
4. Graphic Design
Looks do matter. Having the right look not just for your product, but your brand, assures that you send the right message to the right people. Ignoring this runs the risk of making your product and brand look amateurish, which isn’t going to inspire a lot of sales when your competition likely has some thoughtful design behind it.
Everything in your business must be crafted with purpose and forethought. If you’re lucky enough to have a skilled graphic designer among your current employees, then you may not have to spend as much. However, it’s far more likely that you’ll have to work with someone entirely new. Fortunately, freelancers are an affordable solution for many businesses.
5. Insurance and Contingencies
Insurance can feel a lot like a waste, but like many things, it’s often better to have insurance and not need it than need it and not have it. Some will say that it’s only worth it when you have a lot to lose, but that’s a big risk that could end up costing your company much more than the monthly premiums.
Insurance protects your business from disasters, both natural and human. Your business likely can’t afford to halt operations for long, making insurance invaluable to your success.
6. New Technologies and Automation
Investing in the right technology can make many parts of your business much easier to manage, and in some cases, cheaper. For example, chat bots are rapidly becoming more and more efficient and indistinguishable from a person. Investing in them can make your customer service more efficient and less expensive, leaving you with more working capital to spend on other important things.
Another significant area to spend on is automation. Automated email communication and digital marketing tools can streamline your marketing efforts and improve your conversion rates. Automated invoicing can be useful for businesses that have a subscription-like offering or monthly customers. If it’s something repetitive, there’s probably an automated program that can do it for you.
The right investments and expenditures are critical to keep your business growing and thriving. And when you are tight on cash flow, you don’t have a lot of room for error. Get it right, and you’ll paint a brighter future for you and your employees.
About Universal Funding
Universal Funding is a private funding source that has funded thousands of businesses and more than $2 billion since 1998. We turn your accounts receivable into the funding you need through invoice factoring and can have capital in your hands in a matter of days.
