Starting any business requires capital. There's always another unforeseen expense, and startups are generally relying on a limited client base. But if you're going to grow and sustain your business, there are a few expenses you can't afford to ignore. Here are some critical financial investments your SMB needs to make to ensure legal and financial security.
1. Insurance
Maybe an employee crashes the company van into a new Mercedes, or a hacker ruins your servers. Insurance is there to help cover your losses when otherwise catastrophic events occur in your business.
There are many different kinds of insurance and many different companies, but at the least every company should have worker's comp to cover employee medical expenses, property insurance to cover loss of assets, and some form of liability insurance to protect you against lawsuits. Otherwise all of this comes out of your profits.
2. Technology
No matter what kind of software and hardware you have, you'll need to upgrade periodically to keep from losing ground to cutting-edge competitors. Unless you're a tech company, you probably don't start with much of an IT staff. At the least, you should outsource your needs to a 3rd-party IT management or cloud services provider. This way you have access to the hardware and software for a fixed monthly fee instead of an endless cycle of expenses.
3. Marketing
Many companies utilize digital channels like social media, but that involves time and patience. Advertising in print is still a good way to get recognition. Screen printing, for instance, is still a relatively cheap way to produce advertising like large format signage for trade shows or community events. Schilling Graphics and other companies that specialize in screen printing can provide expertise in artistic design, professional quality screens and materials, consulting, and inventory and delivery of your marketing materials.
4. Legal
Advice It may be paperwork on company structure, vendor contracts, or liability issues, but being legitimate down to the letter can save you from litigation losses. This is especially true when companies on tight budgets have to walk a fine line at tax time.
The EPA, FDA, OSHA, IRS, and many other local government agencies can levy stiff fines and penalties if you don't have all your paperwork and finances in order. Legal advice from those familiar with your industry and operation can ensure you're in compliance, and defend you if there are any questions.
For small businesses and startups it may seem like there just isn't enough money to go around. But you're wasting your time if you can't promote your brand, improve your operations, and cut your losses. No matter how tight money is, you've got to prioritize and allocate funds to cover the essentials.
I hope you enjoyed this article about critical expenses that emerging small businesses shouldn't overlook in their budget.
Interested in more articles about small business finance?
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