Many small business expenses are unavoidable and even critical to operating and growing the business. These expenses include payroll, healthcare, supplies, costs of goods to resell, and everyday operations expenses, like utilities.
On the other hand, there are expenses that are critical to a small business’ success that are investments that should not be ignored. Here are some key investment expenses for your small business.
Marketing and Advertising
Marketing and advertising encompass everything you do to build your brand and attract buyers for your products or services. The first step is to develop a marketing plan with a realistic budget. Realistic does not mean small, either. In fact, having a solid marketing budget in place, and sticking to it, is critical to drive revenue.
How much you should invest in your marketing budget can vary widely. The U.S. Small Business Administration (SBA) recommends checking with your industry’s trade association or referring to industry trade publications for marketing budget benchmarks. Other good resources include your local chamber of commerce and fellow business owners.
You can also break down marketing costs into buckets, like advertising, social media and public relations to set your own ROI benchmarks and test and learn to see what is most effective for your business.
Whatever your marketing plan and budget entail, make sure you have the inventory or infrastructure to deliver the products and services your marketing efforts generate.
Buying the property where your small business lives can be a wise investment for a variety of reasons. First, you’re building equity for your business instead of handing monthly rent over to a landlord. Purchasing the property also provides cost certainty, enabling you to better manage expenses while avoiding rising rent costs.
Owning your small business’ property can also generate revenue by leasing part of the space to another business, or if the property is designated as mixed-use, to a residential tenant. This consistent revenue can help pay your commercial real estate mortgage and generate extra monthly cash flow to reinvest in other areas of your business, like marketing!
Just make sure your small business uses at least 51% of the space.
As your business grows, your need for additional, reliable employees may grow with it.
Having productive, happy employees can go a long way toward establishing and maintaining business continuity. Investing in quality benefits packages, training and even setting up voluntary retirement plans can not only help you attract talent for your small business, but to also retain employees you identify as crucial to your business’ success.
While these investments can be longer-term expenses, they also play a critical role in your small business’ long-term success, providing financial and operational stability to not only help you grow the business but to weather the ebbs and flows of unexpected challenges like those we’ve experienced over the last few years.
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