Every business owner has their own story, and their own strengths and weaknesses — but one thing that most successful business owners have in common is they’re good with money.
These business owners know both how to reduce spending, but also what spending is essential.
Some expenses are close to non-negotiables, and you can’t ignore them. These expenses help to guarantee the success of a company when spent — and in most cases, are necessary for businesses to compete.
1. Marketing and advertising.
Even the best products can’t sell themselves — you’ll need to generate a buzz in the market and spread the word about your business to draw in new customers. Marketing and advertising are essential expenses, even when business is slow or demand is lower than normal. When the budget is tight, it may be tempting to reel in your marketing efforts. However, it’s often better to optimize your marketing spend or find other expenses to reduce before you try to cut it.
An audit of your marketing expenses is a good way to get a sense of how you’re already spending money — and where you may be able to optimize your marketing spend. Drafting a long-term marketing plan if you don’t already have one will help you further clarify your goals and optimize your ad spend.
Experimenting with marketing techniques that can work on a tight budget, like content marketing, can also be a great way to bolster your marketing strategy while keeping expenses low. In any case, however, you will need to spend some money on marketing if you want to grow your customer base and build your brand.
2. Professional fees.
You may want to handle everything related to your business on your own, but knowing when to delegate is an essential business skill. When it comes to business law and taxes, it’s often a good idea to work with a professional. Accountants and legal experts help you manage the intricacies of business taxes, licensing, or related business issues, ensuring that you get things right the first time. These professionals won’t be free, but the benefits they provide your business can save you serious headaches down the line — like audits or fees from local regulators.
To find a professional that you can trust, you may want to start by asking your current business partners or professional contacts. They may have worked with someone in the past who they can recommend.
3. Equipment and upgrades.
Having the right equipment is essential, which means that higher equipment spending is sometimes necessary. Opting for cheaper and more basic equipment can help you out in the short run, but may start to cause problems over time.
Choosing to upgrade existing equipment can also be a great strategy. Upgrades to business equipment can help you to improve efficiency, boost employee comfort and. enable new workflows.
For example, any company that uses commercial vans may opt to install a number of aftermarket upgrades — like improved shelving and interior vehicle partitions. These upgrades will help to increase the storage area in the van and make storage easier — helping to streamline stowing and retrieval of equipment.
Adding in shelving and other van accessories will also improve the resale value of a vehicle, meaning that the business can possibly recoup their investment if they ever need to sell the upgraded van.
4. Repairs and maintenance.
Any piece of equipment that you depend on can eventually fail — whether it’s a truck, a laptop, or some heavy-duty machinery. Budgeting for maintenance in line with your manufacturer’s maintenance schedule or a schedule of your own will help you keep your business equipment in top shape. This can help you keep repair costs low and maximize the lifespan of business equipment — driving down costs in a few different ways.
A maintenance schedule can also help you reduce the depreciation of assets like vans and work trucks. The resale value of vehicles in particular can benefit a lot from demonstrated maintenance and may encourage potential commercial buyers when it’s time to resell. Maintenance can also help you prevent unplanned downtime and data losses.
If a computer or laptop fails, for example, you may also have to deal with both the lost productivity while you wait for a repair and potentially lost data. If you don’t invest in a service like cloud backups, you could lose important files when one of your devices fails unexpectedly. Thus timely repairs and maintenance are musts.
5. Payroll, education, and training.
Unless you’re a solopreneur striking out on your own, your business’s team is one of the most valuable assets that you have. In addition to payroll, it’s also good to invest in your team’s success.
Putting aside time and money for professional development opportunities, training and educational courses relevant to their work can help your employees help develop their talents and acquire new skills. Investing in their abilities like this is a great way to help them develop while also helping your business succeed.
This kind of spending will also help you show your employees that you’re truly invested in their growth and development. As a result, the right course or training can also be valuable in boosting team morale.
These expenses will help to guarantee business success.
When deciding on how to organize your business budget, start with these expenses. They’re some of the most important for your business’s success. Spending on equipment, maintenance, employee training, and professional support will help you optimize your business’s workflows and prevent serious issues like audits or breakdowns.
Investing in marketing will help you ensure that your business keeps growing.