Landing your first round of funding is exciting. You've wowed the investors, the cash is in the bank, and best of all, you can actually spend some money! After months or even years of scrimping and saving.
But, while you've now got some cash to play with, be careful not to go crazy. It might seem like a lot, but it can get gobbled up faster than you think, so it's vital to invest in the areas that will make a real difference to your bottom line.
Here are some key investments that can pay real dividends:
People are one of the biggest costs of any business and while it might be daunting, sooner or later you have to take the plunge. At bootstrapping stage, it's normal to juggle lots of activities to get the business off the ground. But once you land investment, doing everything yourself isn't just inefficient, it will also mean you become overworked and overstretched, which does nobody any favours. So identify the areas where you most need support, and that are strategically most important to your business, and get hiring. Check out our blog on what you need to think about when growing your team ****here.
Consumers today are spoilt rotten when it comes to product and service design. Brands such as Uber, Airbnb and Apple, have raised our standards with regards to user experience and beautiful branding, and if a new product or service doesn't match up to our expectations, we'll quickly switch off and go elsewhere. That's why investing in high quality, professional designers – in your branding, website and UX - is worth the outlay. Because cheap design shows.
Marketing and PR
Whether you're looking to launch your product or service, drive traffic to your website, or create some buzz on social media, you now have some funds to make it happen. And while you might consider doing some activities yourself, there comes a point where you simply won't have the time to squeeze it all in, plus specialist expertise can make all the difference. A full blown marketing or PR agency might be out of your price range (for now!) but an increasing number of start-ups are looking to individual freelancers to help them out on a project and more flexible basis. This can be the perfect solution, giving you the specialist experience, expertise and contacts you need, but at a fraction of the cost. Check out our top tips on budget-conscious marketing ****here.
A business coach or mentor
The value of mentorship is tried and tested, with research by Endeavor, the global mentorship network, showing that start-ups who meet regularly with a mentor are more than three times as likely to be top performers, than those without this support. Entrepreneurs who have benefited say it helps them make decisions quickly and with more confidence – both crucial elements in the high pressure and fast-growth world of start-ups. A good mentor can be a significant expense, but again you can consider offering a part-equity deal to keep the costs down. For more advice on working with a mentor, check out our blog on the subject here.
It's time to start taking your finances seriously, which means investing in some help with the numbers. A good accountant, or in house CFO, will not only ensure you're staying on top of your tax responsibilities, they can also help with forecasting and planning for the months and years ahead. So you'll know what you've got to spend and will be alerted to any potential cash flow issues around the corner - meaning no nasty surprises.
It doesn't pay to scrimp when it comes to matters of the law, so professional and specialist legal advice is always worth the investment. Whether you need help with employment law issues, contractual arrangements or intellectual property matters, you need to have the best advice on your side.
Last but not least, if you haven't already done so, now is the time to look into getting your business insurance sorted. Necessities include employers' liability cover (EL) – a legal requirement – as well as public liability (PL) and contents insurance. But you should also speak to a specialist broker about other options including professional indemnity (PI), cyber, and directors and officers cover, which provide valuable protection against other risks you could face. For everything you need to know, check out our blog on where to start with business insurance.