No business could ever come to life without sizeable investments to kick-start its growth. What may seem like a very profitable idea needs that initial capital in order to blossom into a lucrative business, several years down the line. In a sense, every forward-thinking entrepreneur knows this full-well, so letting go of those precious dollars is somewhat of an everyday occupation for business folk. However, a business person also needs the wisdom to recognize sensible, meaningful investments that will boost their company’s growth, and a slew of pointless drains on their budget.
Although you’ll need to come to terms with making wrong financial decisions, you should also prevent the ones that could cost you significant growth opportunities, or even your business stability. Here are a few “traps” for your finances to keep in mind and to avoid (at all cost, pardon the pun), while you allocate your budget towards the most essential of operations that will help you succeed.
Partnering up with the wrong folk
Handing a portion of your business authority to another person or business entity means that you no longer have full control over your operations. Although this is sometimes necessary, and many business people work with partners very successfully, you need to make sure you’ve found the perfect match for your business, otherwise you might be driving your business into the ground.
Partners whose interests do not align with yours put your company at risk, since their judgment will not always take your business needs into account. Jumping into a partnership is not a wise choice, so it’s best to test the waters first and try working on a project together, while you figure out how the relationship would work as a complete partnership.
Failing to hire the right people
Every employee is an investment. They get to use your office space, the equipment you give them, they receive training and education, you create team-building sessions for them, and not to mention the ads you post to get them there in the first place. When you hire someone hastily and it turns out to be the worst possible match for your business, you need to do the same dance all over again and double your investments to fill a single position.
To prevent such disasters, make sure you implement pre-employment screening so that you can make sure that you’ve chosen the right candidate to join your team. That is one of the simplest ways not just to boost your retention rate, but also to give your brand’s voice to the right people who will be happy to help you grow your business.
Wasting funds on the website
Such simple steps are considered essential, and they typically don’t cost an arm and a leg. You’ll find that a reasonably-priced website can have all the right features to provide a stellar user experience and ensure consistent branding without the hefty price tag.
Skipping the written agreement
How else will you make sure that a client will honor their agreement to pay for your service? How else will your supplier always stick to your schedule? And many other questions of legal nature that often leave businesses in debt, simply because they base their business decision on someone’s word.
As lovely as it may seem to live in a world where someone’s word is enough, in the world of business, you should always have a written and signed legal agreement in place. That kind of peace of mind has no price, and the investment into your legal professionals crafting that agreement will be significantly smaller than that of chasing after late payments and missing deliveries. The same goes for your employees, whose rights as well as yours dwell on that contract. This is an essential step to protect your business investments from day one.
Making mistakes is a natural part of running a business. However, some mistakes can and should be avoided, so add these to your list and protect your investment for relevant projects that will ensure your success.