Businesses are incredibly difficult ventures to start. More than half of all businesses fail within five years of starting, according to statistics gathered in 2016. While this is far better than the traditional belief that half fail within a single year of starting, it is still clearly a challenge to start and continue running a small business.
The reasons for this consistent failure can be difficult to pinpoint, especially because there are so many different factors that can affect it. However, one consistent failure of small businesses is a lack of capital, and by extension, a lack of investment. If you don’t have enough money to spend, then your business is likely to fail in the near future.
Here are six things you need to invest enough money into if you want your small business to be a success.
Investment in design across your business is really necessary if you want to succeed. Most small businesses under invest in their design, especially graphic design for their products, because they believe that it is not important. This just isn’t true. In fact, a customer will pay the most attention to your logo, according to research completed by Missouri University of Science and Technology.
You can do this by investing in the services of a reputable and well-known design company, not just asking your Uncle John to whip something up in Microsoft Paint.
This involves your logo, business cards, cellphone application and the general branding of your company. All these things require solid investment if you want your small business to be successful and have a good reputation with your clients and other businesses as a stand-out professional organization.
Linked in tightly to design, marketing your business is another aspect you need to properly invest in. Don’t try and do it yourself if you aren’t qualified or skilled. Don’t hire your friend for $20 mates-rates. Marketing is essential to your small business’s success, especially if you are working in a field that is already filled with other businesses offering a similar service to you.
Marketing includes knowing your product’s target audience, ensuring that advertising is relevant and accessible for that target audience, and making sure your product is coherent and consistent in its tone and advertising. These actions will maximize your business’s sales, and give your design team a focus behind what they are achieving.
Technology is another valuable investment you should make in your small business. Everybody knows how important technology is to modern life. However, many people do not know how important technology is to business. You need to spend money on your technology, otherwise your reputation and revenue will be negligible until your business is dead.
This includes lots of different things for your business. Programs like instant messaging systems, document organization systems and content management system, are likely to have an instant effect on the productivity of your workforce. However, two other aspects of technology are vitally important to your customers:
1. Cell service/coverage: You will need a long reaching cell coverage that can cover your entire office, ensuring no important phone calls are missed purely because someone was standing in the wrong place.
2. Your website not only needs to be designed to be pleasing to the eye, but it also must contain the most essential information about your company. If your website fails at either of these things, then you will lose customers and reputation.
Simply put, don’t save your money when it comes to technology. You and your business will regret the decision.
4. Legal advice
Many small businesses fail to retain a legal adviser, calling it an unnecessary expense. Well, legal advice is actually pretty necessary to your business’s success. By using a reputable law firm, you can protect yourself from potential legal issues. This includes writing and reviewing legal contracts, ensuring you have not violated any laws in your business and mediation in case of disputes.
In short, you need to get legal advice, or even a retained lawyer if you can afford it, if you want your business to be a success. Without this, you open yourself up to potential legal action being taken against you and even possibly shutting down your business before it has the chance to become successful.
5. Accounting service
Accounting is another thing you need to spend your money on, especially if you are currently lacking in capital. By hiring an accounting firm, you can optimize your business and reduce the wastage and inefficiencies that are limiting your business’s growth.
This includes creating invoices for your employees, decreasing time wastage on duties that an accountant will cover for you and controlling the potentially spiraling costs that often paralyze small businesses. If you fail to make this investment, you are likely to have an inefficient and ineffective business that will waste money you could use for reinvestment in other aspects listed here.
While this one may seem obvious to you, you need to invest your money in good insurance coverage for your small business. Many people scoff at the suggestion of insurance, arguing that it is not needed unless you are making serious money with your business. Honestly, this may be true for some small businesses. If you are an eBay reseller or small-time product designer, then insurance may not be for you.
However, if you want your business to grow, you need to spend money on insurance. Disaster could strike at any time, and if you don’t have insurance, you aren’t really prepared for it. Whether this is a natural disaster like a flash flood, fire or hurricane or a human disaster like theft, injury or illness, you need the support insurance gives.
Without that support, any of these disasters are likely to undermine your reputation as a business and potentially destroy your revenue. Your small business cannot afford either of these consequences, so you need to properly invest in a good insurance coverage with a reputable company.
Overall, you need to make investments if you want your business to be successful. Without the proper investment of money, you will appear unprofessional and lose business through inefficiencies and lack of reputation. If you can’t make these necessary investments, then you probably need to reevaluate your business’s chances of success.
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This article originally appeared on Entrepreneur.com. Minor edits have been done by the Entrepreneur.com.ph editors.