This blog often discusses business investment strategies, focusing on traditional vehicles like stocks and acquisitions. But you may not have the capital to think in those terms if you’re just starting a business.
So, today’s post will focus on some non-traditional investment ideas that can potentially reduce your tax burden and help you reach your business goals.
Often, new business owners view marketing as an expense or luxury. But in reality, it’s an investment that can mean the difference between success and failure.
Here’s a quick question to prove the point. When was the last time you had a Moxie soda? Probably never.
But in the 1920s, it was the king of soda, easily eclipsing upstart Coca-Cola. Moxie was so popular it was the main drink at Calvin Coolidge’s inauguration ceremony. And it was advertised everywhere.
But when the Great Depression hit, Moxie pulled back the reins on marketing. Coca-Cola doubled down on theirs, and the rest is history.
And even though it’s been the beverage king for decades, Coke still sees marketing as an investment and a way to reduce its tax burden.
Business history is littered with stories like this, proving that marketing isn’t a luxury. It’s a necessity.
Speaking of necessities, the next investment idea is another investment your business can’t live without.
Risk Assurance and CPA Audits
There’s no substitute for experience when it comes to business. The good news is that experience can be purchased, just like any other investment.
So, if you are just starting out, doing some risk assurance can help you know if you are doing things right. It’s a big topic, but the bottom line is that investing in risk assurance can help you avoid problems you may not even know exist.
And it can help you improve processes that add to your bottom line.
One of the most common forms is an internal controls assessment. This process tests the financial controls and processes within a business and offers advice on improving them.
Like all investments, it has a price, but the return on investment can keep your balance sheets in good shape. And that can mean the difference between solvency and bankruptcy.
There’s an old saying in business that every product (or service) is a commodity. That means you must differentiate yours. Some businesses like to differentiate on price, generating a revenue-sucking race to the bottom.
The more successful ones tend to differentiate in customer experience. This is especially effective for smaller businesses.
Whether you have a brick-and-mortar operation or do all your business through e-commerce, providing the best customer service is an ongoing investment.
However, good customer service costs money, and it’s easy to view it as an unnecessary expense.
But that point of view is folly. Differentiating yourself through customer experience often brings in a better clientele with a more recession-proof income level.
And many of the investments, like customer service training or website user experience improvements, can at least be partially used to reduce business tax burdens.
The Bottom Line
Starting a new business is tough. Only 50% make it to the five-year mark. But by budgeting to include these investments in your business strategy, you increase the chances of beating those odds.