The Best (And Worst) Financial Decisions Your Business Will Ever Make
It doesn’t matter how small or large your business is, you will still need money to keep the wheels turning. The way you spend money can often depend on how much money you will see in return. Spend wisely, and the profits will come in. Spend foolishly, and you risk failure as you run at a loss. Money – our biggest source of stress, and yet we can’t live without it!
In this article, we will consider your spending. Focussing on both good and bad decisions, we will examine the areas where you are likely to place your finances.
You need to get word of your business out into the world, so this has to be a necessary part of your financial plan. Still, you do need to focus your efforts into the right areas.
Best decision: If you haven’t already done so, you need to get into digital marketing. While some of this can be done reasonably cheaply – social media, website marketing – it is still worth investing your money in outsourcing, handing over the keys to your marketing to people who may be better equipped at this than you. Viral marketers, SEO experts, and web design companies, are just some of the people who can push your business to the next level.
Worst decision: Don’t waste your time or money by marketing to the wrong demographics. Consider the people likely to buy or use your product, and centre your attention on them. Cut down on print marketing too. We are living in a world where nearly everybody is online, so there is less need to advertise your business in your local newspaper, on billboards, or through leaflet drops. Don’t disregard this entirely, but you don’t need to let it eat up your marketing budget.
- New technologies
To stay relevant with customer and employee demands, you do need to invest in some of the latest technology. It’s the difference between success and failure, as your nearest business rivals will be looking to do the same.
Best decision: Focus on the areas that will improve your business. The latest app development can boost productivity and enhance your working methods. Cloud software can encourage increased collaboration within the workplace. Live chat and video communication technologies can benefit both customers and business partners. Consider the latest trends, speak to industry professionals, and visit trade shows. Once you have a handle on the tech available, think about how it will benefit your business, and spend your money appropriately.
Worst decision: The worst thing you can do is ignore the latest technologies. It’s no good bemoaning the expense if your rivals are already up to speed. You will only lose valuable customers. However, you shouldn’t jump in at the other end of the scale and purchase everything. Not every new tech is right for your business, no matter how many bells and whistles they have. Don’t neglect the value in purchasing reconditioned equipment, either. If you are a fledgeling business, the latest tech will swallow your budget, so going second-hand is a wise financial decision.
No man is an island, or so the saying goes, so being a lone ranger in business is not a good idea. Having other people to work with you will enable you to take your business to new levels, and increase your profits.
Best decision: For starters, you need to invest your money in hiring the best people. Spending your money on a recruitment agency will save you a lot of time, and you can have the peace of mind knowing that all the relevant checks will take place. You can still be part of the interview process, and with the right questions, you will be able to filter out those people who aren’t a good fit for your business, while discovering who will be perfect to fill the positions available. You should then invest money into training. While you may already have a skilled workforce, training will still benefit your employees, ensuring they are up to date with the latest practices, while improving their morale going forward.
Worst decision: Employing people for the sake of it! It’s no good hiring people who are surplus to requirements, and you will only be throwing good money away. Sometimes, it may be better to hire somebody on a temporary contract or on a part-time basis, unless you have enough work for them to do on a regular and full-time capacity. Don’t be tempted to hire unskilled workers on a casual basis, however. It may be cheaper for you, but you are running a risk of mistakes being made, and your personal and business reputation going down the proverbial drain.
You want to be protected in business, so insurance is a must. Small businesses may not need cover for everything – public liability isn’t needed if you are operating from your living room – but it makes financial sense to have protection in the relevant areas.
Best decision: Look at every area of your business, and cover yourself accordingly. You never know when disaster will strike, be that an injury at work, a natural event causing damage, or broken or stolen pieces of essential equipment. Read this guide at Forbes on the types of insurance you may need. Getting protected is one of the best financial decisions you will make.
Worst decision: It’s a no-brainer, but if you aren’t covered, you will run at a financial loss. This can make or break your business, as you may have to replace missing items or face the cost of legal fees, both of which can seriously damage your financial position. However, while you should buy insurance in the areas that count, you don’t need to go with the first provider you come across. A price comparison is always a good idea, as you may be able to get the same cover at a cheaper cost elsewhere. Be sure to check on an annual basis, especially if your current insurance provider insists on raising their premiums.
So, where are you going to put your money? We hope we have given you some useful advice, and heeding it may make the difference between success and failure this coming year. Money isn’t the root of all happiness, but it will certainly make your business and personal life easier if you spend it wisely.