From machinery to postage, small businesses incur a ton of expenses. It’s wise to shop around in certain areas—wireless plans and office supplies, for example—to save money. But in some cases, it pays to get the best even if that means spending more than you planned. Here are five areas where a small business owner should not skimp:
1. Legal advice. An experienced lawyer can help a small business navigate complex issues such as buying or selling a business and labor law conflicts. A lawyer may also review contracts and other documents. To ensure your business follows every letter of the law it pays to find a lawyer that will meet your needs long term. “The goal is to find the best cultural fit between you and the lawyer, and then look at price,” says Barron Wellman, an entrepreneur and business coach based in Orange County, California. “The most expensive firm may be the firm you have a cultural fit with, or it may not.”
2. An accountant. Doing your own taxes wastes countless hours and may cost you savings. CPAs stay abreast of the latest tax laws, know what exemptions apply to your business, and can properly value your equipment. “You must have a usable depreciation scale of equipment,” says Wellman. “CPAs know what the IRS will allow. They also do more than taxes: they can help you understand how to increase profits.”
3. Professional development. Just as entrepreneurs spend money to improve the business, they must also invest in themselves. Wellman suggests that business owners continually improve their leadership skills. Read a book, enroll in a webinar, take a weekend seminar, or invest in a few coaching sessions. “If a business owner acts like a manager, he’ll manage every good employee out of the business,” says Wellman.
4. Productivity software. If you have more employees than can fill a conference room, you may benefit from an internal communications platform. Platforms such as Yammer, Jive, Telligent Enterprise, and Salesforce’s Chatter, at $5 to $15 per employee per month, aren’t inexpensive, but they can greatly enhance productivity by efficiently tracking projects, enhancing communication, and eliminating long email threads. Depending on the industry, a small business may want to consider project management software, customer relationship management tools, or manufacturing enterprise resource planning (ERP) software.
5. Equipment. “If your business has equipment that’s going to get a high volume of everyday use, get a workhorse that will not have a lot of downtime for repair,” says Wellman. The equipment may be expensive to purchase, but keep in mind that continual repairs are expensive, too. Invest in top-quality products up front for long-term savings.
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