Carol always cautions entrepreneurs to be smart with their money, but there are some cases where paying for the right help can save you a lot of headaches. In “Being Cheap Can Cost Your Business,” Carol’s recent post on Bank of America’s Small Business Community, she gives some examples of services you might want to pay more for and hire an expert. Carol begins:
There are plenty of viable cost-cutting measures and small businesses should take advantage of every one of them.
Why spend thousands on a top-quality cherry wood conference room table when a pine table – not to mention a second-hand model – will look good at a fraction of the price? Unfortunately, cost-cutting does not always make sense and can cost your business more than it saves over time.
Here are 6 areas where spending more money can provide economic benefits to your business.
1. Employees and contractors
If your core team is comprised solely of entry-level workers, you will save money… until their lack of skills and experience lose customers for your business. Good decision-makers and customer-facing personnel will cost more, but they help your company prosper and grow.
Build your team out of the best employees you can afford and supplement their efforts with skilled contractors. These are the people who can later train less-expensive entry-level employees, who may become top-tier team members over time.
Also, compensating employees well gives them less of an incentive to leave, which saves you money in terms of head hunting, retraining and more.
2. Accounting services
Well-designed, intuitive business accounting software is universally used to save on bookkeeping costs. If you choose your software carefully and learn how to use it, this is a valid cost-saving measure.
But don’t count on software to make financial decisions for your company. You need to send the numbers to the best accountant that you can find. Look for someone who reads and interprets numbers like you read the news. A good accountant can instantly spot positive and negative trends in your business — and has the intimacy with federal and local tax codes to help ensure that you take every available tax break, while avoiding potential penalties. They can also help you set up pension and benefit plans and do other work that’s very valuable for you and your business.
You can read the rest of the post here.