Expenses You Should Not Cut

As the entrepreneur we are always looking for ways to minimize spending. But there are certain things that form the foundation of your business that you should not skimp on.

“But there are certain things that form the foundation of your business that you should not skimp on.” 

Knowing where to spend money can help startups thrive whatever the circumstances and economic outlook. There are some activities that are worth investing in because they are so fundamental to the success of your business. Even though your mindset is always about minimizing cash, here are a few costs that startups should think long and hard about before cutting:

• Business Plan. A good business plan will help you stay on the road to success. A business plan forces you to think long and hard about not only the different startup costs for the business but your plan for success.. Business plan providers or business consultants can charge a flat fee or an hourly rate. You can expect to pay $50 to $150 an hour, or a one-time fee of $400 to $1,000. Since many startups will use their business plans to attract investors, this isn’t an area where you want to cut costs. Spending the money upfront will pay dividends down the road and will help create a clear vision as you navigate the terrain to come.
• Testing Your Idea. The job of an entrepreneur and founder is to figure out whether the idea is viable or not. This is where good research comes into play. Doing the research in the beginning will help you understand how your product will find its place in the world.
• Your Product. During the early stages, your primary focus is on figuring out product-market fit. The next step is actually building the product. Building your product is the most important cost associated with starting a company. If you are building a tech company and you need to develop software or a web site or a platform, that is a cost you should consider investing in and not skimping on.
• CFO/Accountant. A good CFO or accountant can save you more money than you’ll spend on them. Getting your financial house in order isn’t something you can leave until you become profitable, and a good accountant will keep you informed and organized about the financial status of the business.
• Employee Satisfaction. Making sure your full-time workers are happy is integral to your success. Don’t be cheap when it comes to providing your team with everything it needs to be productive and happy such as large monitors, fast machines, and comfortable chairs. Morale is very important, and a happy workforce is a productive workforce.
• Lawyer/Legal Expenses. There are many services that aren’t worth your time or money in the beginning. But nearly all startup entrepreneurs will require some amount of legal assistance. It can range from incorporation paperwork to understanding liability issues.
• Marketing. Marketing has become a science, and any advantage you can secure in the early stages will be beneficial. This is not to say you should just throw cash away on frivolous promotional ploys. But there are lots of third parties with expertise in this area that you can leverage.
• Outsourcing. As you begin to put your company together, one of the biggest expenses you’ll encounter is payroll. One simple solution is to outsource some of your work. There are plenty of extremely talented freelancers out there who who will work for less than a full-time employee, but that doesn’t necessarily mean they’re inexpensive.