Sometimes, you have to spend money to make money, the saying goes.
And, although that may feel like a risky proposition for a New Jersey small business owner, there are areas where you can get a lot of bang for your buck.
Here are three investments you should consider to give your small business a boost:
Upgrading or investing in technology can be an area that will enhance your business and create efficiencies.
This category can be broad, so consider what makes the most sense for your business. Whether it’s adding logistics software to help manage inventory, upgrading credit card machines for businesses with a lot of foot traffic, to purchasing newer computer systems to run the business more smoothly, or adding a high-end security system to cut down on theft, each of these upgrades can streamline operations that will eventually create a return on your investment.
If your business relies heavily on equipment to succeed, it’s time to take stock.
Are you using old mixers and ovens that require significant maintenance costs to keep them running? Are you constantly in the shop getting your delivery trucks fixed? Are the second-hand machines you were given slowing down production? Upgrading your equipment can be costly for a small business, but start tracking the money you’re losing now compared to what you could be gaining if you invested in your business.
As a small business owner, you may not pay yourself in the beginning, but, ideally, your compensation should be part of your business plan.
According to a study specific to women business owners that looked at pay, ownership and valuation, 55% of the early-stage women entrepreneurs surveyed do not pay themselves for the work they do for the company.
One of the most important benefits of paying yourself is that it helps you build up your personal savings. That’s a good thing for you, obviously, but it can also benefit your business. If you want to buy a space at some point, for example, depending on the way your business is set up, your own personal savings may be instrumental in helping secure a loan.
Paying yourself also looks good to investors, as well as banks and other finance companies. Your willingness to invest in yourself demonstrates a high level of commitment and confidence in the health of your business.
Owning and running a small business is no small feat, as it comes with the added responsibilities of meeting payroll, paying rent and keeping a positive cash flow. But there may be business purchases that may help you run your business more smoothly, more efficiently and, ultimately, help you save money in the long run, which means more for your bottom line.
Bill Stump is a small business leader for Wells Fargo’s Atlantic Region.