The day to day job of running a business is often making decisions about where to spend money: you have a finite amount available, and you need to spend it in ways that turn that original amount into a bigger one. Put that way, it sounds simple.
In reality this is a complex task, and any mistake can severely disadvantage your business. A mistake on a sufficiently grand scale can overbalance it altogether and lead to the end of your entrepreneurial dreams. The temptation is to save money: to avoid spending as much as possible so you always have some in the bank, either literally or notionally, with investment or credit you can still draw on.
This makes you prey to that damaging fallacy, the false economy. A false economy is a saving that costs you more in the long wrong: getting a ‘deal’ on a cheap pair of shoes that wear through almost immediately and mean you have to spend more than if you’d simply bought the expensive, hard-wearing ones immediately.
Today we’re taking a look at some of the areas of your business that it’s vital to invest in, where your money won’t be wasted.
Research, Development and Testing
When you’re launching a new product, the potential for success and failure are both powerful: success means more revenue, new customers, good reviews and strengthening your brand. Failure means money lost, time wasted and your brand weakened.
This risk means it’s vitally important to invest in your product development process. This doesn’t just mean creating high quality products, it means have a robust testing process that tells you what consumers think of your concepts and prototypes. If you’re pouring resources into a product customers can’t use or even understand, you need to know about!
For too many people, the HR team is an afterthought, unnecessary or even outright resented. Understood properly the HR team is the spine of a business that’s functioning healthily. It coordinates everyone to work toward the same goal, and helps managers understand both the big picture and any individual person by tracking performance and absence.
It’s also the main way to organise personal development, through the medium of annual review processes and goal setting. Done well this helps people to see a future in a business, and avoids a high turnover of staff and loss institutional knowledge and expertise.
Even in the early days, it’s worth spending money on good HR staff, even if it’s only part time or as an occasional consultant: the results will pay for themselves in good time.