10 ways to invest $10k – A small business is a hungry beast. It will devour as much time, energy, and money as its owner is prepared to give. As Darren Horrigan reports, success comes for those who know how much of each to put into the business and, at the best times, to get the most value.
1. Develop a business plan
Yes, it’s the most obvious way to give life to your business dreams – but it works. Charbel Fahd, founder, and principal of Capital Eyes Business Advice Financial Vision says a small business investing $10K has to hit every target, so he’d spend his first $1000 on a business plan.
“It’s vital for a small business to know where it’s going,” says Fahd. “Most don’t at the start. They just hope. A business plan does not have to be sophisticated, but it does need to be an honest appraisal of the business’ potential.”
Once the road is identified, Fahd would hire a business mentor to help realize the plan. Cost: $1500.
“People are in love with the idea of having their own business, but in fact, they end up having a job. They work inside their business rather than on their business. They love their business rather than getting clients to love their business. A business mentor brings them back to reality, adjusts their mindset, keeps them focused, and forces them to look at their business in a critical way.”
Terry Rodoni, director of business solutions at RSM Bird Cameron, specializes in small business management advice and strategic planning. He says the initial tasks in growing a small business are free.
Rodoni suggests you review your business’s current financial statements. Look at comparatives for the past five years; identify where the business is in terms of personnel, business capacity, and financial capacity; and document where you want the business to go. You can then prioritize your goals and engage a qualified accountant to formulate a business plan.
2. Protect your IP
Lex Goldsmith, wealth coach at Principal Edge Financial Services says if you’re in a small business you have probably identified a gap in the marketplace and you have a point of difference. His advice is to protect your intellectual property.
“Get your web presence in tip-top condition and get some quality third party advice for an objective market-focused direction”
“If your idea, invention, or niche is the driving force behind your business then you must get it established from a legal perspective,” says Goldsmith. “It might sound dry but you don’t want to wake up one morning to discover the guy you thought was your best mate has run off with your idea. It doesn’t take long and it doesn’t cost much – depending on what you’re looking to protect.”
3. Install a reliable IT system
Online gift retailer RedBalloon Days has made the BRW Fast 100 list six years running – not bad for a business that started with second-hand computers and $25,000. Its founder and chief experience officer, Naomi Simson, says the first employee to join RedBalloon was an IT person.
“We all hate repetitive tasks,” says Simson. “Creating a process is the best way to get rid of anything that is repetitive and this usually means investing in IT. Having fabulous IT people is a great investment for a small business. That’s where innovation comes from.”
Fahd and Goldsmith agree.
Fahd: “Invest in technology, especially decent software. Time is an issue for [every] small business and automating processes is the best way to save time. Of my $10,000 I’d spend $4000 on IT.”
Goldsmith: “The world we live in dictates that one way or another you will be reliant on technology. So I’d invest some money in a decent website and have reliable IT that is matched to your needs.”
4. Master the search engines
Love them or not, search engines are a fact of business life. Simson says a small business has no choice but to take them on.
“We are in such an online world you have to educate your people about search engine optimization and search engine marketing,” says Simson. “This is an ongoing investment because it continually changes. What we knew eight years ago … is irrelevant now. And it has to be done in-house.
“That will piss off every agency in Australia, but it’s such an important part of understanding how we acquire customers. People who use search engines are already considering your product, so you want to make sure you meet their expectations. And, remember, if you’re doing well on SEO you don’t have to invest as much on SEM, so it’s vital to understand how they both work.”
5. Educate yourself
Nathan Aherne, CEO of Reddog Technology, has a background in finance and has worked as a business systems analyst and business consultant.
“Invest the $10K in education and training yourself,” he says. “Whether it’s increasing your knowledge about general business matters or learning specific programs – do whatever you can to increase your knowledge.”
Aherne says an important part of this process is to record everything you learn.
“A central wiki will organize all your knowledge, notes and observations, and allow you to systemize your business.
“When your business starts to grow everything will be there for easy reference and you will be able to handle larger growth. New staff members can access the information easily and use it to train themselves or update it as time goes on. This system helps you remember what you’ve done and ultimately helps you grow your business.”
6. Build relationships
Victor Pisapia, an entrepreneur and the director of VictorsFood, says he would build relationships among staff and customers.
“A business of this size and nature is dependent on positive, constructive relationships,” he says. “This might be as simple as encouraging staff to take clients out for coffee or as in-depth as running a client event where everyone gets to interact less formally. The upshot is the same – relationships are nurtured and strengthened, which in turn creates customer loyalty.”
Simson: “I would also invest money in getting customers to become advocates. One of our first customers was Fuji Xerox and they wanted us to develop something specifically for them. I said we’d be happy to as long as they told everybody about it. We worked hard on their project to build an unbreakable customer relationship so they would talk about us. That was powerful. Become less of a supplier and more of a partner. Clients provide testimonials. Partners provide advocacy – even evangelism.”