This post was written by Laura Costello, who is in her final year of a Bachelor of Law/International Relations at Latrobe University.
One of the critical questions asked by all entrepreneurs is how much money it will take to get the venture started, and where money should be spent in the early development.
Having an educated idea about start up costs and prioritizing business expenses accordingly, ensures that your startup will not run out of resources.
Read on to see where your startup should be spending money in order to maximize the potential for success.
Purchasing accounting software must be on the top of the to-do list for any startup venture.
Accounting software keeps track of important financial and customer data including revenue, expenses and customer information. Automated accounting software saves business owners time when dealing with their bookkeeping duties.
It is also a vital tool for budget analysis and providing an overall image of the company’s financial situation. When choosing accounting software, taking a close look at your company’s needs is important in order to determine the day to day functionality requirements you need.
Developing a financial business plan with the assistance of an experienced financial advisor is an early and necessary expense that needs to be made by every startup. The purpose of a financial plan is two-fold. You’re going to need it if you are seeking investment from venture capitalists or other sources.
Any bank or lender will also ask to see these numbers as well to make sure you can repay your loan.
It is also necessary to help you understand the financial forecast of your business, to expose any vulnerability and provide an educated assessment on what your pricing structure should be.
Market research is essential to any startup business.
Extensive market research is required before committing to a product development. Knowing what your market needs, who your target consumer is and how you will meet that need is essential for success.
Market research expenditure can include web scraping services, surveys, data collection and price checking.
This may mean spending money upfront before making any decisions. But the cost is justified, as you are reducing the risk of wasting money on weak marketing and poorly targeted products.
Furthermore, ongoing market research exposes any opportunities and gaps in the market.
Even on a limited budget, investing in a website is a necessity for every startup entrepreneur.
Whether you are launching an ecommerce business or providing a service, the internet remains a prominent referral field for potential clients.
There are a number of reasons why a well-designed website will attract your ideal customer and increase conversion rates.
A website that is too cluttered for users to navigate, slow to respond, unresponsive on mobile phones and filled with out of date content is unlikely to engage and inspire the audience.
It is now also common for consumers to post feedback online via the business website. It is also a way for owners to have direct contact with their customers and manage the feedback that they are receiving.
Almost everyone who starts a business understands the importance of getting potential customers to know about your product or service.
As a startup business with limited cash flow, it’s difficult to take the plunge into spending limited funds on advertising and small business marketing. However, it is vital for your business’ longevity.
Some relatively inexpensive marketing ideas to generate buzz over your product or service include google ads, media gimmicks and paying for social media on Instagram.
If you really want to make a splash in your market, you will need to spend a little cash. Careful planning, research and consideration will ensure that your limited funds are spent in the best way possible to further your business venture.