Forget Fancy Furniture, Here’s Where Startups Should Splurge
Five expenses that startups can, and really should, spend money on
We often see articles about what startups should NOT spend money on — from fancy office furniture to unnecessary traveling, it’s easy to figure out where to avoid spending too much. But where should startups splurge? Here is a list of five expenses that startups can, and in some cases really should, spend money on.
1. Product Development
If your product isn’t good, then there’s no point in even moving forward. Hiring the right developer or product engineer is key to securing your startups future success. Splurging a bit on testing your product is OK too, as long as it ensures your product is strong and needed in the market.
2. Google Ads/Copy
Once you have a strong product (or are on the road to a strong product), Google Ads with well-written copy can really help get attention for your company. Of course, Google Ads are not free, so you’ll need to do some spending here. If no one on your team is a good copywriter, then hire a freelancer to help you make sure your ads work.
3. A Lawyer
At some point you’re probably going to need legal help. Whether you’re bringing your company to another country, trying to incorporate, or file a trademark, most likely you’ll need a professional to help your team sign the right documents. Since legal business can take a long time either way, hire a professional to make sure you do it right (or risk having to refile forms).
4. A Money Management Tool
It may be unnecessary to hire an accountant at the beginning, but there definitely needs to be someone on the team that manages spending and cash flow. Even if that person isn’t a financial wiz, that’s not a problem as there are many financial management tools that can help. Find one that can create customized reports, projections, and alert you when spending gets out of control.
5. Communication & Metrics Tools
Tools that help your business communicate with your customers and measure your success metrics are the key drivers of your startup and one of the most important areas where it’s okay to spend. Having the ability to communicate with your customers and measure whether or not they are getting any value from your product or service, is necessary for growth. Intercom.io, Mixpanel, Kissmetrics, Amplitude and Google Analytics, are just a few of the metrics platforms where it’s okay to splurge.
Being ‘lean’ at a startup doesn’t necessarily mean you have to be cheap. You raised funds for a reason, so just keep in mind that some areas should get more funding than others. While it’s tempting to rent out that swanky office, you can work from your kitchen table until you and your team are ready for that. Making sure that your product is strong and team is cohesive is much more important than company gear and comfy chairs.
This blog is by Agu De Marco, Co-Founder of Wideo, a DIY animated video production platform.
Looking for a community contributor for technology, startup or entrepreneur related stories? DM me on Twitter @agudemarco or email agu@wideo.co
