The first challenge most new business owners run into when they begin their entrepreneurial journey is resource allocation — specifically, where to invest their time and money.
As a business consultant, I’ve seen it happen time and time again — entrepreneurs who have a game-changing idea, but misplace their focus and financial resources, resulting in months (sometimes years) of wasted potential for growth.
To make sure this doesn’t happen to you, today’s blog post is all about strategic resource allocation in the early stages of your company.
Here’s what you should be focusing on:
Time
When you are working on a start-up, time is possibly the most valuable resource you have. This is because in the early stages, your company likely won’t be bringing in much money — meaning you need to be very smart about what you spend your time on to ensure you can start carving the path towards generating consistent revenue.
Because of this, it is essential that where you spend your time adds value to your overall business operations. I’ve found that the tasks that tend to yield the most progress and growth fall into the two following categories:
Actively selling your product, marketing it, and collecting feedback from your target customer base should be your #1 priority. Not only do these activities lead to potential profit, but they also give you a more clear picture of what is working and what is not. In fact, customer feedback has the potential to shape almost every aspect of what you are selling, from product features to customer service to pricing — so never ever take it for granted. The more customers you speak to, the more you’ll know about what your audience actually WANTS.
Creating your product or offer is usually the most time-consuming (not to mention expensive) activity, and beginning the process before doing adequate market research and talking to your customers (see above) could have negative consequences for your business. You want to be fully certain that your product or offer solves a problem your ideal client is facing. Remember, as important as product and offer development is, you don’t want this to completely dominate your focus. Thinking too much about the product and not enough about the business as a whole (including your marketing strategy) will leave you with a really amazing product but no sales or visibility to show for it.
The main takeaway I want you to have here is that big action yields big results. Contemplating your signature brand font for three hours every day or spending months building a website when you don’t have a product yet just isn’t going to move the needle forward the way talking to your customers, marketing your brand, and developing a killer product will.
Money
Okay, let’s talk about the elephant in the room…money. As an early-stage start-up owner, you’re dealing with limited funds — so it’s important to spend wisely. Here’s where I would prioritise cashflow:
You can have a fantastic business model and product, but if no one knows about it, your business is not going to succeed. When starting a business, you’re going to want to focus heavily on marketing to raise brand awareness, increase visibility, and drive sales. Marketing is one of those things that can be done poorly or be done well — so while you can certainly get started with your marketing efforts for free, if you’re new to the digital marketing world, it is well worth it to invest in a professional to help you create and execute a marketing plan that actually makes sense. This way, you aren’t caught in a vicious cycle of ‘trial-and-error’ that keeps you from moving forward and actually achieving your goals.
It is SO important to make sure you are following the law as a business owner. To avoid potential problems later on, it’s always a good idea to invest in a lawyer you trust to help you navigate things like registering your business, trademarking your products/offers, drawing up contracts, and more.
Taxes as a self-employed business owner can be quite complicated if you’re not a numbers person. The last thing you want is to worry come tax time. Having a good accountant on your side to assist you in managing all of your financials is a worthy investment that you’ll thank yourself for making down the line.
Your business will likely need a few different platforms to stay up and running. Depending on your industry, this may include (but not be limited to) a domain hosting platform, web hosting platform, eCommerce-hosting platform, email marketing platform, course-hosting platform, video call platform, payment processor, customer relationship management tool, etc. These monthly expenses can quickly add up to hundreds if not thousands a year — be sure to track them and only pay for platforms that you truly need to move your business forward.
Once you know for SURE that your target market is excited about the product/offer you are creating, you can begin to allocate funds to the product development process.
Where not to spend:
As a new start-up owner, you absolutely don’t need to spend on the following…
- A fancy office
- The latest and greatest technology
- A full team of staff
This all comes later. For now, focus on things that will actually bring in revenue and ensure the safety of your business.
Launching a start-up can be a massive business endeavor, and you shouldn’t have to go at it alone or without a plan. To make the most of your time, click here to learn more about booking a strategy intensive with me. We’ll spend the 90 minutes creating an actionable plan for your start-up that will guarantee you reach your short and long-term business goals without sacrificing your precious time and money!