If you think about it, starting a startup is a tectonic shift for you. All your attention moves towards the startup, and you focus all your time, money and energy to make each day successful. And that’s backbreaking work. Especially when you spread resources thin and invest a lot of them in details your business doesn’t need at the moment.
But a business does run on money. It also requires an initial cash injection to get day-to-day operations rolling to start making returns. And since there are no returns without investment, here are seven things you won’t regret investing money (time or effort) in when starting a business.
1. Conduct market research
Market research has to be your first major investment. Without it, it’s highly unlikely that you will be able to know how successful your efforts will be or if your products and/or services have the potential to penetrate the market and churn in profit.
Start with the 4 Ps (product, price, placement and promotion) to identify what your clients need and want; the right price for your offer based on competition and what customers are willing to pay for it; where will they make the purchase; and the best way to market your product to them.
Entrepreneur Ryan Robinson sums it up nicely: “Business ideas alone are worth very little. If you want to start a business and become successful with it, you need to solve meaningful problems.” That’s why you need to use market research to learn these things.
2. Create a business plan
Start by setting your SMART goals. These will be specific, measurable, attainable, relevant and timely goals you can set for each step of your startup’s journey. Then, decide on a structure for your business process, and conduct a SWOT analysis to identify possible internal/external strengths, weaknesses, threats and opportunities.
After that, shift your focus over to finances. Create a financial forecast for your first year of business. This document should include major one-time expenses, monthly overheads, and cash flow projections necessary to start making a profit. When you have all of this, put it into one big document and return to your business plan regularly.
3. Get the essential documents in order
A lot of entrepreneurs seek perfection until they actually start their business. Some even fail to get their company off the ground for that reason. Instead, you should take immediate action.
Gather the essential documents, send out licensing requests, and open your startup. Investing money in this will motivate you to work towards achieving the rest of your goals.
4. Hire a good business attorney
A business lawyer might not be required in your line of work, but when starting out, they are integral to your initial success. For starters, your attorney can inform you about the various documents and licenses you need to register a company on your own.
Moreover, they can help prepare essential paperwork, like drafting client contracts, the lease on your office, and employee disclaimers. A good attorney will even provide suggestions on a viable business structure for your startup.
5. Hire a good accountant or CFO
Another person you will need right from the start is an accountant or CFO. Not only will that person help you draft your financial plan (and financial forecast), but they can keep your budget in line while you focus on establishing a good foundation for your startup.
For example, an accountant won’t just be responsible for keeping your books in order, but they will manage the initial cash injection your startup needs to get off the ground. And once you start, they will ensure salaries, bills, and other overheads are paid on time with enough room for you to receive your cut, as well.
6. Spend money on tech
In the digital age, tech is an unavoidable investment for any startup. Whether you conduct business online or from a physical location, both hardware and software help you improve the speed and performance of your entire business process.
Investing in computers and other gadgets for the office will streamline how you do business and communicate with staff and clients. Project management tools, marketing software, digital accounting solutions, and other programs will increase the productivity of your day-to-day operations.
7. Invest in yourself
Finally, remember why you started this journey. In all likelihood, you want to create a startup because you:
- noticed a gap in the market;
- know what you do and have a solution;
- love what you do.
And that’s why you’re the most important element in your startup’s success story.
So, it’s only natural to invest in yourself, as much as you invest in the company. If you do spend money on further development of yourself, you increase the collective knowledge in your company and ensure a prosperous future for everyone involved.
Business and Marketing Specialist