Getting a small business off the ground is difficult, and the first few years can seem like a never-ending battle for profitability.
In fact, Small Business Trends reported as of 2016, that only 40% of small businesses were profitable. That means the majority of small businesses likely have very little money to invest into their business for future growth. So, if you are a small business owner or in a startup, what should you do with limited funds in order to maintain and grow? How do you decide which expenses stay and which ones get the boot?
If your business is in its early stages and you’re trying to understand which expenses are vital to your operation and which ones you can cut, here are 5 expenses you’ll be glad you kept in the budget.
First and foremost, you have to know where your business stands in the marketplace and where you’re going. While this may or may not involve a large monetary investment, it definitely involves an investment of time and resources. This step should include lots of market research and analysis, and the more in-depth you can get with the information, the better.
There are tons of resources out there for making a business plan, and it’s never too late to put one in action for your business. You can get inspiration from something as simple as The $100 Startup’s one-page business plan or one of the many other business plan resources available to small businesses. The important thing is that you do the right research and answer vital questions about the purpose of your business, who your customers are, and where you’re headed, then document it all for future reference and accountability.
Communications and Customer Service
Communications and customer service are vital to any business, but especially for businesses in the early years of development when customers are just getting to know you. If you plan on communicating with your customers via telephone, one key investment you should make early on is in a quality business phone system.
Modern VoIP phone systems are cost-effective for businesses of almost any size, and cloud-based or hosted phone systems offer even more cost flexibility for small businesses.
In short, the right business phone system can offer advanced, enterprise-level features to startups and small businesses, but at an affordable cost – making you competitive with other large, established businesses. A quality phone system should be able to offer features such as:
- An auto attendant
- Efficient call routing
- The ability to access business phone lines from a mobile device
- Voicemail to email
- Integration with other business apps like CRMs and more
A good business phone system should also be capable of easily growing with your business so you don’t have to overhaul your phone system if your business expands or contracts.
Other easily accessible forms of communications and customer service include website chat, customer support forums, and social media. Services like Zendesk allow businesses to set up an online customer support portal for support ticketing, messaging, help center, and more.
Zendesk and other services also help with social media monitoring/messaging to enable your business to be both proactive and reactive in communicating with customers online and keeping them happy.
Many small businesses are tempted to skimp on marketing efforts in the early stages due to the lack of capital. However, modern technology has made marketing in the digital era simpler and easier than ever before.
One of the most effective ways to market certain types of local and B2B businesses is through blogging and SEO. Google and other search engines are looking for the most relevant and thorough content on the web to answer searchers’ questions. So use Google’s keyword tool and other online tools to figure out what questions your potential customers are asking Google, then create online content around those topics.
Another easy way to reach new customers and spread the word about your young business without spending a fortune is social media. While social media platforms like Facebook are pushing businesses to use paid advertising on their platforms, with a little creativity and some grassroots support from others, social media can still be a great way to drive engagement and awareness for your business, organically (or free!).
Last but not least, there’s email marketing. Many small businesses overlook email marketing, but it can actually be one of the most effective means of marketing when you do it right. While there can be a complex science to mastering it, your small business can benefit immensely by using email to engage with customers (provided they opt-in or agree to receiving email from you).
Legal and Accounting assistance
These two can be lumped together in the scope of this conversation for the mere fact that they’re both so vitally important to the livelihood of small businesses. The funny thing about accountants and lawyers is that it’s easy to think you can skimp on them until the time comes when you actually need them. Then it’s usually too late.
The last thing your young business needs is an unnecessary lawsuit or an unexpected audit from the IRS. Do your business a giant favor and invest in a quality accountant and lawyer early in your business’s life.
Many small business owners or operators are tempted to try and take a DIY approach to the technology needs of their up-and-coming business. It may be tempting, but don’t waste your valuable time doing things other people are much more equipped to tackle.
Chances are your talents lie someplace other than in the areas of web design, computer repair, or IT troubleshooting. You may think you’re saving money by learning how to do everything yourself, but the hours you’re wasting on IT-related tasks add up to one fat bill your business is paying indirectly. Instead, find a trusted IT partner and other established professionals and tap into their services.
Invest in the 5 areas above during the early stages of your business in order to maintain and stimulate growth. If you’d like to learn more about getting a cost-effective and scalable phone system to cultivate professional communication in your business, take a look at our free on-demand webinar all about cloud phone systems.