When you are starting a new business, every dollar is important. You are either starting your business on the side as you continue your current job, or you are using savings while you are not earning a “traditional income”. The natural inclination is to spend as little money as possible. However, this approach can actually be worse than spending too much money too early in your business.
The adage is often true – “You must spend money to make money.” You must invest resources, money included, to increase your visibility and productivity. If you are cheap instead of frugal, you can easily become overwhelmed and frustrated as you try to do too much with too few resources. There are several areas where you must invest money to begin a viable business. Investing wisely in these two key areas, without overspending, will give you an advantage as you build your new source of income.
Invest in marketing
No business survives without sales, and sales come from visibility and exposure. Marketing is designed to promote the benefits your business provides to your target market and ideal customers. One great way to maximize your marketing investment is to identify your ideal customer. You cannot be all things to all people, so don’t try. Instead you need to identify the specific customer you want to attract and start marketing to them wisely.
Your first marketing investment should be a good Internet presence.
There are two key parts of building a good website. The first, registering a domain and finding a solid web host, is not very expensive. My domain for $11/year and host it for under $7/month, which is very inexpensive!
Designing a good website can cost more money, but is well worth the investment. I tried to design my own website using WordPress, but it looked very amateur so I ended up hiring someone to design my website and Twitter page as part of an overall branding exercise. I spent about $500 for this service, and it was well worth the investment!
In addition to a great website, you should invest time and/or money to attend networking events and join online communities. I budget $30/month to attend networking functions and other events where I can talk with professionals. I also invest in two online communities that advance my goal of self-employment. One community, Free Agent Academy, is $125/month. The other, Accidental Creative Engage, is $10/month. You should find the communities that will give you the skills and contacts to succeed and invest the time and money to be a valuable resource.
Invest money in your business
I know accounting is not the most exciting part of running a business, but you must have good financial information to run your business. Sound finances are the foundation of your business, so be sure to invest in a sound financial setup. There are three accounting programs I recommend you review to start tracking your spending. All three services are web-based and let you access your information through any computing device with a web browser.
Kashoo – I tested this service about a year ago and liked it. It is designed for service businesses and has a clean, user-friendly interface. Kashoo just introduced an iPad app so you can now enter and review information without using your laptop.
InDinero – This service markets itself to brand-new businesses with a very simple method of tracking your information. InDinero offers a very clean dashboard showing you key information at a glance and also tracks spending patterns to create the starting point for a budget (which is a must).
Xero – This is the software I will use as I transition from an Excel-based system; I also recommend this tool to my coaching clients. Xero offers more invoicing and product features than Kashoo and InDinero, including the ability to price and track inventory. Xero also has a great iPhone/iPad app for your mobile computing needs. If you sell products, I would recommend reviewing Xero.
Invest in your business!
Marketing and finances form the foundation for your business, so be sure to invest in both. Not only will you save time by having more help, you will also present a better brand and be more productive with your limited time.
Some great points in your post & welcome to Xero! The iPhone app is only at its first version & we’re looking forward to introducing lots more features. Any questions as you start out please feel free to contact us – email@example.com
Larry Brown says
These are great tips on how to really get that business off the ground. I should point out that an investment if only an investment if it nets a return in some shape or form. Some people put in a lot of money in what they think is investing but is actually just an excuse to spend money. In other words, ask yourself if what your investing is really an investment before going ahead and spending all the money. I always recommend a pen, a paper and 15 minutes of your time.
We really love your blog! Keep up the good work!
Dallon Christensen says
Catherine, I’m very excited about Xero. I do think it’s a great tool, especially since I work off both a MacBook and an iMac! I don’t have to worry about servers and can just work in my browser.
Larry, I love your advice about using a pen, paper, and 15 minutes. All of these tools are no substitute for good, old-fashioned thinking. Have you read the book “The Knack” by Norm Brodsky and Bo Burlingham? Norm is a big fan of writing your planning figures on paper first. Even though I use LivePlan, I do my first draft of high-level figures on paper first.